Bri-Chem Corp, a publicly-traded manufacturer and wholesale distributor of oil and gas drilling fluids and steel pipe, announced the company has received C$10 million in a subordinate debt and warrants from Canadian private equity firm Fulcrum Capital Partners. Edmonton, Alberta-based Bri-Chem will use the proceeds of this funding for acquisitions, working capital and other purposes. he Bri-Chem transaction represents Fulcrum’s sixth disclosed deal this year.
Bri-Chem Announces Closing of $10 Million Acquisition Warchest
EDMONTON, ALBERTA, – Dec. 10, 2012
Bri-Chem Corp. (“Bri-Chem” or “Company”) (TSX:BRY) a leading North American wholesale distributor and manufacturer of oil and gas drilling fluids and steel pipe is pleased to announce that Bri-Chem has closed a ten million dollar subordinated debt facility (“Credit Facility”) with Fulcrum Capital Partners Inc. (“Fulcrum”).
The financing consists of a $10 million five year subordinate debenture (“Debenture”) and the issuance of 300,000 common share purchase warrants (“Warrants”). Each Warrant entitles Fulcrum to acquire one (1) Bri-Chem share at an exercise price of $1.77 for a period of 48 months from the date of issuance. Bri-Chem has the option to call the Warrants at a 30% premium to the exercise price at any time during the first eighteen months from the date of closing of the Credit Facility. The Credit Facility is interest only for the first fifteen months with an annual interest of 11.5%. Bri-Chem intends to use the net proceeds from the Credit Facility for future potential acquisitions, working capital and general corporate purposes, which may include capital expenditures.
Don Caron, Chief Executive Officer of Bri-Chem, commented, “We are extremely pleased with the confidence that Fulcrum has shown in our Company, its operational strategies and management team. This Credit Facility will allow us to further strengthen and increase our presence in the North America drilling fluids marketplace and seek out new opportunities for additional steel pipe manufacturing micro-mills.”
Since our formation in 1985, Bri-Chem has established two primary segments of business through a combination of internal growth and acquisitions: Bri-Chem’s Drilling Fluid Division is North America’s largest independent wholesale supplier of drilling fluids for the oil and gas industry. We provide over 100 drilling fluid products, cementing, acidizing and stimulation additives from 25 strategically located warehouses throughout Canada and the United States; Bri-Chem’s Steel Pipe Division is the first company to introduce and construct a Thermal Pipe Expansion (TPE) facility in North America for manufacturing, testing and supply of large diameter seamless steel pipe for the energy industry. Additional information about Bri-Chem is available at www.sedar.com or at Bri-Chem’s website at www.brichem.com.
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