CVTech Group announced this week that it has spun off its CVT systems and related products segment in an MBO. The buyers, including management and Fondation, paid a total of $17.3 MM.
DRUMMONDVILLE, QC, Oct. 16, 2012 /CNW Telbec/ – CVTech Group Inc. (“CVTech” or “the Corporation”) (TSX: CVT) today announced it has completed the sale of its operations in the CVT systems and related products segment. The buying group is comprised of two current managers of the said operations, namely Mr. Alain Charest and Mr. Christian Mercier, as well as Fondaction, the CSN’s investment fund for cooperation and employment. The financial partners of the buying group are the National Bank of Canada, the Business Development Bank of Canada as well as Investissement Québec.
The purchase price amounted to $17.3 million. The variation from the original price of $18.0 million reflects the lower net tangible value of underlying assets resulting mainly from the recent sale of a building, from which proceeds of $285,000 have been received by the Corporation, and a reduction in working capital items being sold. The price includes a cash payment of $15.3 million and $2.0 million in preferred shares of the new entity. The preferred shares are non-voting, non-participating and redeemable between the end of the sixth and tenth fiscal year following the conclusion of the transaction. An annual dividend rate of 2.0% is payable on their outstanding balance. CVTech intends to use proceeds from this transaction to reduce its debt.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. Through Thirau ltée and its subsidiaries, Riggs Distler Inc. and Thirau LLC, the Corporation provides services to the electric power industry for the maintenance of transmission and distribution lines, primarily in Quebec, Ontario and the eastern United States. Another Thirau ltée subsidiary, J.J.L. Déboisement inc., specializes in control of vegetation surrounding power lines and in clearing rights of way. Thirau LLC’s wholly owned subsidiary Riggs Distler & Company, Inc. is a leading provider of maintenance and construction services to the utility and heavy industrial markets.