Aveda Transportation and Energy Services Inc (TSXV: AVE) has agreed to purchase the U.S.-based rig moving assets of Precision Drilling Corp (TSX: PD) for US$24.0 million. The transaction, which involves the purchase of rig moving equipment, including bed/tandem trucks, tractors, trailers, loaders and cranes, is expected to be completed by July 1. Based in Calgary, Aveda is a provider of oilfield hauling services and equipment rentals to the energy industry. The company’s largest shareholder is Canadian family-owned private equity firm Werklund Capital, which first invested in Aveda in 2010.
Aveda Transporation and Energy Services Announces Signing of Definitive Agreement to Acquire Precision Drilling’s U.S. Rig Moving Assets
CALGARY, ALBERTA–(Marketwired – June 16, 2014) – Aveda Transportation and Energy Services Inc. (“Aveda” or the “Company”) (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced that, through its operating subsidiary in the U.S., it has signed an asset purchase agreement to acquire Precision Drilling Corporation’s (“Precision”) U.S. rig moving assets (the “Acquisition”). Aveda expects to acquire rig moving equipment, including bed/tandem trucks, tractors, trailers, loaders and cranes, for total consideration of US$24.0 million.
Selected assets being acquired include:
Data table found here.
“This is a very exciting time for Aveda. Through this transaction we are acquiring a modern and well maintained fleet that shares the same specifications and equipment configuration as our current U.S. assets,” said Kevin Roycraft, President and CEO of Aveda. “This will support a smooth integration into our operations and drive utilization. It also strengthens our relationship with Precision and we look forward to working with Precision on internal and customer rig moves in the future. Strategically, this will further reduce Aveda’s reliance on third-party equipment suppliers, helping to improve margins, and allow us to allocate equipment to both current and new operating areas to take advantage of high activity levels and further growth opportunities in certain regions.”
Subject to customary documentation and approvals, the Company expects to close the Acquisition on July 1, 2014. Aveda expects these assets to be deployed sometime in the third quarter of 2014. A significant portion of Aveda’s 2014 capital expenditure budget is being allocated to the acquisition. Management intends to increase planned capital expenditures for 2014 with an eye to funding additional growth initiatives and reducing the Company’s third party costs.
About Aveda Transportation and Energy Services
Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas, Pennsylvania and North Dakota. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda’s rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.
Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Leduc, AB, Sylvan Lake, AB, Edson, AB, Mineral Wells, TX, Pleasanton, TX, Midland, TX, Williamsport, PA, Williston, ND, and Buckhannon, WV. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.
This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as “forward-looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “may”, “will”, “project”, “should” or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: demand for the Company’s services and general industry activity level; the Company’s growth opportunities; and expectation to maintain revenue and equipment utilization. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:
— the completion of the Acquisition;
— the performance of Aveda’s businesses, including the Acquisition assets,
current business and economic trends;
— oil and natural gas commodity prices and production levels;
— capital expenditure programs and other expenditures by Aveda and its
— the ability of Aveda to retain and hire qualified personnel;
— the ability of Aveda to obtain parts, consumables, equipment, technology,
and supplies in a timely manner to carry out its activities;
— the ability of Aveda to maintain good working relationships with key
— the ability of Aveda to market its services successfully to existing and
— the ability of Aveda to obtain timely financing on acceptable terms;
— currency exchange and interest rates;
— risks associated with foreign operations;
— changes under governmental regulatory regimes and tax, environmental and
other laws in Canada and the United States; and
— a stable competitive environment.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda’s annual information form and management discussion and analysis for the year ended December 31, 2013 (the “MD&A”). Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Aveda Transportation and Energy Services Inc.
Bharat Mahajan, CA
Vice President, Finance and Chief Financial Officer
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