Mosaic agrees to buy 70% interest in Alberta energy services company

Canadian private equity firm Mosaic Capital Corp has agreed to acquire a 70% interest in an unnamed provider of site maintenance services and civil construction to Alberta’s energy sector. The firm partnered with members of the company’s management team, who will hold the remaining 30% interest. Mosaic’s cost of acquisition includes $12.6 million in cash, the assumption of $4 million of debt, and up to $3.5 million in contingent consideration over the next three years, subject to the company meeting certain financial targets. The deal is expected to close in June.

PRESS RELEASE

Mosaic Capital Corporation Enters into Agreement with Alberta Based Site Services Company

Calgary, Alberta CANADA, May 20, 2014 (Filing Services Canada via COMTEX) — Mosaic Capital Corporation, (“Mosaic”) (tsx-v symbols:M and M.PR.A) is pleased to announce that it has entered into an agreement to acquire a 70% interest in a leading provider of site maintenance services and civil construction to Alberta’s energy sector (the “Company”). The acquisition is expected to be immediately accretive to Mosaic’s free cash flow and distributable cash per common share. Closing of the transaction, which is anticipated to occur on or about June 1, 2014, is subject to satisfaction of typical conditions precedent to closing for transactions of this nature.

The Company is a premier provider of site services to Canadian and international energy companies and engineering procurement and construction management companies in Alberta’s energy sector. For the year ended September 30th, 2013 the Company had revenues of approximately $50 million. Management believes that the Company will continue to benefit from the billions of dollars in construction and maintenance spending in Alberta’s Oil Sands along with the long term nature of these projects.

The Company’s main services are:

* Energy Infrastructure Civil Construction, including

o Excavation

o Drainage

o Construction of roadways and pads

o Maintenance of roadways (including snow removal and dust control)

o General site services;

* Mechanical installation services;

* Construction and maintenance of temporary facilities;

* Underground sewer, water, gas and communications infrastructure installation services;

* Manufacturing and installation of potable water and sewage systems;

* Materials management;

* Clearing and grubbing; and

* Vacuum truck services.

On completion of the transaction Mosaic will own 70% of the partnership that owns the Company and members of management will own the remaining 30%. Mosaic’s cost of acquisition includes $12.6 million in cash, the assumption by the partnership of $4 million of debt and up to $3.5 million in contingent consideration over the next 3 years, the payment of which is dependent upon the business meeting or exceeding certain financial performance targets.

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is an investment company based in western Canada that owns a portfolio of established businesses that have a history of generating strong sustainable cash flow from their operations. Mosaic’s objective is to create long term value for our shareholders and business partners and to have that reflected in our share price. We believe that this is achieved by growing free cash flow per share and retained earnings. We do this by acquiring businesses that we understand at attractive prices and we manage our risk through extensive due diligence, creative transaction structuring and working closely with our businesses after acquisition.

FOR FURTHER INFORMATION PLEASE CONTACT:

Tim Taylor

Vice President

Mosaic Capital Corporation

400, 2424 – 4th Street SW

Calgary, AB T2S 2T4

T: (403) 270-4658

E: ttaylor@mosaiccapitalcorp.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release may contain forward-looking statements and forward-looking information, including statements and information which reflect current expectations regarding the future business outlook for the Company and Mosaic. The words “believe”, “expect”, “intend”, “estimate”, “anticipate”, “project”, “scheduled”, and similar expressions, as well as future or conditional verbs such as “will”, “should”, “would”, and “could” often identify forward-looking statements and forward-looking information. More particularly, and without limitation, this news release contains forward-looking statements and information concerning the expected impact of the acquisition of the Company on Mosaic’s cash flow. The forward-looking statements and information contained herein are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements and information due to these statements and information being subject to a number of risks and uncertainties. Undue reliance should not be placed on these forward-looking statements and forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements and information involve numerous assumptions and known and unknown risks and uncertainties, both general and specific that contribute to the possibility that the predictions, projections and other forward-looking statements will not occur. These risks and uncertainties include, but are not limited to, general business and economic conditions in geographic areas where the Company has operations; pricing pressures and other competitive factors; third parties failing to honour their contractual obligations with the Company; procurement and pricing issues with suppliers; unforeseen cost overruns on the Company’s projects; legislative or regulatory developments; the continued availability and cost of qualified labour; the continued strength of the industries within which customers of the Company operate; and the continued ability to secure new business. Should any of the risks or uncertainties facing the Company materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results, performance, activities or achievements of both the Company and Mosaic could vary materially from those expressed or implied by the forward-looking statements or information contained in this document.

Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in reports on file with applicable securities regulatory authorities (including, in particular, Mosaic’s most recent annual information form) and may be accessed through the SEDAR website (www.sedar.com)under the profile for Mosaic.

Although Mosaic believes that the expectations represented by any forward-looking-statements and forward-looking information contained herein are reasonable based on the information available to them on the date of this document, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements or forward-looking information. Any forward-looking statements or information herein contained is made as of the date of this press release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.

Source: Mosaic Capital Corporation (TSXV: M – TSXV: M.PR.A)

Photo courtesy of Shutterstock