Industrial Scaffold Services Ltd., a Crofton, B.C.-based provider of industrial and commercial scaffolding throughout Western Canada, has agreed to be acquired by Canadian private equity firm Mosaic Capital Corp. for $15.9 million. The majority transaction is expected to close in September. Established in 2002, Industrial Scaffold Services is one of eight companies in Mosaic’s portfolio.
Mosaic Capital Corporation Enters into Agreement to Acquire Industrial Scaffold Services
Calgary, Alberta CANADA, Aug 30, 2013 (Filing Services Canada via COMTEX) — Mosaic Capital Corporation (tsx-v symbols:M and M.PR.A), (“Mosaic”)is pleased to announce that it has entered into an acquisition agreement to acquire a majority interest in the business being carried on by Industrial Scaffold Services Limited (“Industrial Scaffold”). Industrial Scaffold is a leading provider of worksite surface and access scaffolding solutions to industrial and commercial customers in the energy & utilities, pulp & paper, mining and marine sectors in western Canada. Industrial Scaffold is based in Crofton, B.C. and has offices in Fort St. John, Kitimat and Victoria. On completion of the transaction Mosaic will own 67.5% of the business and members of management will own the remaining 32.5%. Mosaic’s cost of acquisition is $15,862,500 and will be funded through a combination of cash and $3.0 million of vendor take back financing. The acquisition is expected to be immediately accretive to Mosaic’s free cash flow and distributable cash per common share. The transaction is expected to close in early September 2013.
Established in 2002, Industrial Scaffold (www.industrialscaffoldservices.ca) is a preferred worksite surface and access scaffold provider for numerous industrial projects within western Canada, providing both scaffolding services and environmental containment services (which is the wrapping of structures such as buildings, industrial infrastructure, ships, and submarines). Industrial Scaffold’s commitment to safety, excellent customer service and the provision of highly qualified field supervisory personnel are key elements which keep it at the forefront of its industry.
Alvin Brown, President of Industrial Scaffold stated, “Since inception our focus has been on being a leader in our industry. We ensure that each client’s project is executed safely and to the highest level of quality using a highly trained and qualified workforce. We have a number of customers that have been with us for over 10 years due to our high level of service and understanding of their business. Our partnership with Mosaic will allow us to move quickly to grow and diversify into new markets. Mosaic brings strong strategic and business depth to Industrial Scaffold while allowing us to keep the culture and values that have made us successful. I look forward to continuing as President of Industrial Scaffold and moving the company into its next stage of growth.”
“Our partnership with Industrial Scaffold follows Mosaic’s strategic plan of acquiring established businesses with exceptional management and growing free cash flow. This transaction also continues to add diversification to Mosaic’s cash flow,” commented Harold Kunik, President of Mosaic. Mr Kunik added, “Al Brown and his management team have built an excellent business that we are proud to be a part of. We see a lot of opportunity for growth of Industrial Scaffold both geographically and by services provided. Industrial Scaffold has been built on integrity, customer service and dedication to employees along with a clear vision for growth. We welcome the Industrial Scaffold team into Mosaic and look forward to a strong and growing partnership.”
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 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.
We strongly encourage the management teams of our operating companies to continue to look for acquisitions that would facilitate their entry into new markets or increase their product or service offerings. We are actively looking for businesses in a variety of industries that fit our investment model. Our preferred acquisition criteria for such transactions include the following:
-Demonstrated history of growing sustainable cash flow and operating in an industry which we believe has good growth potential
-A capable and experienced management team that is growth oriented
-The business should have a significant market share in its business area
-A unique competitive advantage
-Ability to grow the business without significant amounts of new capital
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