WesternOne Inc (TSX: WEQ) has agreed to sell the manufacturing operations of its modular building business, Britco Manufacturing, to Triple M Modular Ltd, a Lethbridge, Alberta specialist in manufactured and modular housing. Under the terms of the agreement, Triple M will pay $2.5 million in cash upon closing and an additional $2.5 million contingent on earnings from the business. The deal is expected to close in May. Triple M has been a portfolio company of Canadian private equity firm TriWest Capital Partners since 2013.
WesternOne Inc. to Sell Britco’s Canadian Manufacturing Operations
VANCOUVER, BC–(Marketwired – April 07, 2017) – WesternOne Inc. (“WesternOne”) (TSX: WEQ) (TSX: WEQ.DB) announced today it has entered into a binding agreement with Triple M Modular Ltd., an investee company of TriWest Capital Partners, to sell substantially all of WesternOne’s Canadian manufacturing assets and liabilities in order to complete its exit from the modular building business known as Britco Manufacturing (the “Transaction”).
Under the terms of the agreement, WesternOne will receive cash consideration of $2.5 million upon closing, plus or minus customary working capital adjustments and up to an additional $2.5 million contingent on earnings from the business sold for the 12-month period following the close of the Transaction. In conjunction with the Transaction, WesternOne expects to incur a one-time severance obligation of approximately $0.9 million. The Transaction is expected to close on or about May 1, 2017.
Britco Manufacturing provides innovative modular construction solutions, with design-build and turn-key capabilities, for permanent applications such as multi-user buildings, hotels and lodges and offices, and relocatable structures such as office complexes, construction site offices and workforce accommodations.
“The Transaction marks the successful outcome of our strategic review process in respect of Britco, together with the sale of Britco’s modular space rental and US operations announced on March 6, 2017,” said Peter Blake, CEO of WesternOne. “The divestiture of Britco’s assets will enable us to focus on forward strategic execution in growing our construction heat and aerial rental business platform. The related sale proceeds will create financial flexibility through deleveraging the balance sheet, enhancing liquidity for working capital management and deploying growth capital for the heat and aerial businesses.”
“We are excited to partner with management and staff at Britco Manufacturing as they continue to grow their presence in the commercial and permanent modular construction sectors,” said Rick Weste, President of Triple M Modular Ltd.
Raymond James Ltd. acted as financial advisor to WesternOne in connection with the Transaction.
The closing of the Transaction is subject to customary closing conditions including, among other things, the settlement of definitive documentation and obtaining all required consents to the sale of Britco Manufacturing’s assets.
WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate value for its shareholders.
Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne’s website at www.weq.ca.
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Photo courtesy of Britco