Northern Frontier Corp. Announces Proposed Public Offering of Subscription
Receipts and the Proposed Acquisition of the NEC Group, an Industrial Energy
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES/
CALGARY, April 23, 2013 /CNW/ - Northern Frontier Corp. (TSX-V: FFF.P) (the
"Corporation" or "Northern Frontier") is pleased to announce that it has
entered into a definitive arms-length share purchase agreement (the "Share
Purchase Agreement") dated April 22, 2013 with 794522 Alberta Ltd.
("Numberco"), NEC Contractors (2012) Inc. ("NEC" and together with Numberco,
the "NEC Group") and the shareholders of the NEC Group, being The Kevin Benson
Family Trust, The Albert and Colette Benson Family Trust, 1351600 Alberta
Ltd., 1351601 Alberta Ltd., Kevin Benson and Colette Benson (collectively, the
"NEC Shareholders") pursuant to which the Corporation through its wholly-owned
subsidiary, 1739365 Alberta Ltd. (the "Purchaser"), will acquire all of the
issued and outstanding shares of Numberco (the "Numberco Shares"). The
Corporation has also entered into a definitive arms-length asset purchase
agreement (the "Asset Purchase Agreement" and, collectively with the Share
Purchase Agreement, the "Agreements") dated April 22, 2013 with CRC Open Camp
& Catering Ltd. ("CRC"), which is owned by certain of the NEC Shareholders,
pursuant to which the Purchaser will acquire certain assets (the "CRC
Carve-out Assets") held by CRC and used in the NEC Group business (together
with the transactions contemplated by the Share Purchase Agreement, the
The NEC Group provides sustaining capital services to large industrial energy
customers in the steam assisted gravity drainage ("SAGD") region of
northeastern Alberta. The NEC Group's head office and shop is located in Lac
La Biche, Alberta and its field location is in Conklin, Alberta which is
central to the substantial industrial energy production developments in the
vicinity. The business focuses on the ongoing demand for services to support
operating facilities, sustaining capital expenditures to maintain production
levels of those facilities and the development of new production capacity.
The aggregate purchase price payable for the Acquisition is approximately
$48.5 million, subject to adjustment (consisting of approximately $43.5
million in cash and $5.0 million worth of common shares of the Corporation)
plus an additional contingent payment of $2.0 million, as described in detail
below - see "The Acquisition". The purchase price payable for the Acquisition
was determined using a 3.8x multiple (3.9x including the contingent payment of
$2.0 million) of the combined, pro forma adjusted earnings before interest,
taxes, depreciation and amortization ("Adjusted EBITDA") of the NEC Group
business (including the CRC Carve-out Assets) normalized for significant
capital asset additions made by the NEC Group during fiscal 2012. Northern
Frontier will acquire the combined operation with sufficient working capital
to continue operations and on a cash-free, debt-free basis. Following
completion of the Acquisition, the NEC Group entities will be wholly-owned
subsidiaries of Northern Frontier (together, the "Resulting Issuer").
Concurrent with, and as a condition of, the Acquisition, the Corporation has
engaged GMP Securities L.P. and Raymond James Ltd. as co-lead agents, together
with Acumen Capital Finance Partners Limited and Cormark Securities Inc. (the
"Agents") to complete a fully-marketed prospectus offering of subscription
receipts (the "Subscription Receipts") for common shares of the Corporation
("Common Shares") on a "commercially reasonable efforts" basis (the
"Offering") at a price to be determined in the context of the market (the
"Offering Price"). The net proceeds of the Offering will be used by the
Corporation to fund a portion of the purchase price of the Acquisition. The
Corporation expects to file a preliminary prospectus to qualify the
distribution of the securities listed above on or about April 23, 2013. The
preliminary prospectus is subject to completion and the receipt of applicable
regulatory approvals. The Offering will be qualified in the provinces of
Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. The
Corporation will provide subsequent public disclosure regarding the Offering
on completion of marketing efforts.
The Corporation has also agreed to grant the Agents an option (the
"Over-Allotment Option") to purchase up to such number of additional
Subscription Receipts and/or Common Shares (as applicable, depending on when
exercised) as is equal to 15% of the number of Subscription Receipts sold
under the Offering to cover over-allotments, if any, and for market
stabilization purposes. The Over-Allotment Option shall be exercisable, in
whole or in part, on the closing of the Offering and for a period of 30 days
The Corporation has also entered into a term sheet with a Canadian chartered
bank with respect to a credit facility (the "Credit Facility"). The
Corporation expects to establish the Credit Facility on or prior to the
closing of the Acquisition. The Credit Facility is expected to consist of:
(i) a $15.0 million committed revolving extendible credit facility; (ii) a
$20.0 million committed revolving reducing extendible term loan; (iii) a
treasury risk management facility subject to a limit of $1.0 million; and (iv)
corporate MasterCard for up to $500,000. The term sheet with respect to the
Credit Facility contains customary conditions precedent to the lender entering
into the Credit Facility, including completion of the Offering.
The Acquisition is subject to the approval of the TSX Venture Exchange (the
"Exchange") and the policies of the Exchange relating to qualifying
transactions. The Acquisition, when completed, will constitute the qualifying
transaction of the Corporation pursuant to Policy 2.4 of the Exchange.
About the NEC Group and the CRC Carve-out Assets
The NEC Group provides sustaining capital services to large industrial energy
customers in the SAGD region of northeastern Alberta. The NEC Group's head
office and shop is located in Lac La Biche, Alberta and its field location is
in Conklin, Alberta which is central to the substantial industrial energy
production developments in the vicinity. The business focuses on the ongoing
demand for services to support operating facilities, sustaining capital
expenditures to maintain production levels of those facilities and the
development of new production capacity.
The NEC Group
Numberco (formerly NEC Contractors Ltd.) is a private Alberta corporation
formed on July 29, 1998. Numberco amended its articles on July 5, 2012 to
change its name from NEC Contractors Ltd. to 794522 Alberta Ltd. NEC is a
private Alberta corporation formed on December 23, 2011. NEC operates as a
wholly-owned subsidiary of Numberco.
The NEC Group's services consist primarily of construction and maintenance of
civil works for plant replacement and production sustaining projects.
Large SAGD facilities and other industrial projects are often constructed in
remote areas with limited access or local services. The owners and operators
of such facilities and projects often sub-contract the construction of civil
works to third party providers. The NEC Group builds site access roads and
other engineered earthworks for sustaining capital works, maintenance
operations and some initial development projects for SAGD facilities and other
industrial facilities. Engineered earthworks projects typically require
clearance, excavation, movement and placement of earth to construct plant
sites, production pads, roads and corridors. The development of these
structures then requires maintenance support services such as repair, gravel
placement, water control, snow removal and other functions on a continuous
basis, all of which the NEC Group provides.
SAGD facilities, including those necessary to inject the steam into the
reservoir and to recover the bitumen emulsion from the reservoir, are
constructed on large production pads. The NEC Group provides sustaining
capital projects for SAGD facilities, including the construction of initial
and supplemental production pads and the associated roads and corridors
necessary to operate such facilities. The ongoing demand for services and
support to maintain production levels in the SAGD market is expected to grow
with production levels. One of the key drivers of the ongoing maintenance
market in the SAGD industry is the annual need for replacement production.
Each production pad for a SAGD plant has multiple well pairs. These well pairs
can produce bitumen from a finite area. Once the bitumen is removed and
produced there is a need for a new production pad in order to continue bitumen
extraction.Production pads are used to replace declining production and
depleted zones and are required each year to support the SAGD facility's
ongoing production. These projects proceed on a recurring basis for the life
of the facility to supplement and replace declining production from previously
constructed infrastructure. The NEC Group constructs approximately three
production pads (replacement or supplemental) every year for each 35,000 bbl/d
increment of its clients' operational capacity.
In addition to activities in the Alberta Oilsands, the NEC Group provides
similar construction and maintenance services in the civil infrastructure
markets, including in support of the construction of powerlines, pipelines and
other infrastructure projects.
The NEC Group also provides water and sewage hauling services for local camp
facilities. The NEC Group initially provided these services only to its own
camp facilities, but found it profitable to extend them to other third party
operated facilities. The NEC Group currently provides such services to one
other local camp and management of the Corporation believes that there are
additional growth opportunities in this area.
The NEC Group operates approximately 120 pieces of heavy equipment, numerous
pieces of support and service equipment and many light vehicles, some of which
it currently rents from CRC on an exclusive basis. The NEC Group also rents
from CRC a camp facility that has 136 beds, a kitchen and supporting equipment
which are used for the operation of the camp. The Corporation will acquire
all of these assets from CRC as part of the Acquisition.
The categories for the NEC Group equipment and carrying values as at December
31, 2012 are detailed in the following table (exclusive of the CRC Carve-out
Assets) and are derived from the audited consolidated financial statements of
the NEC Group for the year ended December 31, 2012.
Net book value ($) Dec 31, 2012
Automotive equipment 1,523,936
Computer equipment 659
Construction and excavating equipment 4,327,828
Furniture and fixtures 21,738
Leasehold improvements 23,606
Shop equipment 172,821
Automotive equipment under finance lease 436,844
Construction and excavating equipment under finance 9,428,633
The NEC Group has two locations for its operations. In Lac La Biche, Alberta,
NEC leases a six acre lot with a 12,000 square foot shop and a 6,400 square
foot office from CRC pursuant to a rental agreement dated January 1, 2012 (the
"Lac La Biche Lease"). In Conklin, Alberta, the NEC Group leases a 20 +/- acre
lot with shop and laydown facilities from the Province of Alberta which it
intends to acquire prior to the closing of the Acquisition and sub-leases from
CRC a portion of a 20 acre parcel for its camp and associated infrastructure
(the "Conklin Sub-Lease"). The parties to the Lac La Biche Lease and the
Conklin Sub-Lease are not at arms' length.
As part of the Acquisition, the Lac La Biche Lease and the Conklin Sub-Lease
will be cancelled and replaced with new lease agreements on arm's length
The Lac La Biche, Alberta facility supports the maintenance and care of the
equipment assets, administrative functions and management. The facility has
two bays for heavy equipment maintenance, one bay for truck and light vehicle
maintenance, one warehouse and one welding shop. Miscellaneous storage
facilities and fleet parking are also provided in Lac La Biche, Alberta.
The Conklin, Alberta location provides field operations offices, shop and camp
facilities, a fueling station, water and sewer base of operations and laydown
yards for materials and equipment.
CRC Carve-out Assets
The CRC Carve-out Assets consist of approximately 22 pieces of heavy
equipment, including rock trucks, excavators, dozers, loaders, graders and
compaction equipment. In addition, the CRC Carve-out Assets include a 136 bed
camp facility, including kitchen and supporting equipment which are used for
the operation of the camp. NEC currently utilizes the CRC Carve-out Assets,
on an exclusive basis, to operate its business, inclusive of the equipment and
camp. Northern Frontier will acquire the equipment and camp, enter into a
facility lease agreement and a land lease agreement with CRC concurrent with
the closing of the purchase of the NEC Group. The CRC Carve-out Assets do
not constitute a "business" for purposes of applicable securities legislation.
The categories for the equipment and carrying values as at December 31, 2012
are detailed in the following table and are derived from the audited schedule
of CRC Carve-out Assets.
Net book value ($) Dec 31, 2012
Construction and excavating equipment 2,403,216
Portable accomodations 1,691,801
Furniture and fixtures 52,829
Benefits of the Acquisition
Northern Frontier has developed the strategic objective of creating an
integrated resource maintenance, logistics and civil services business through
a buy and build growth strategy. The acquisition of the NEC Group and the
CRC Carve-out Assets provides a platform from which to execute this
strategy. Specifically, management of Northern Frontier believes that the
anticipated benefits and upside potential associated with the Acquisition
include the following:
Established Market Position in the Oilsands
The NEC Group has been operating in the Lac La Biche, Alberta and Conklin,
Alberta areas since 1998 and through its predecessors since 1978. Services
provided by the NEC Group are well established in the market and the NEC Group
has deep relationships with many of the SAGD operators in the area as the
local services provider. This established market position would be difficult
Barriers to Entry
The cold climate, remote location, challenging topography, shortages of
skilled labour, stringent safety requirements of the major oil companies,
large investment in fleets of equipment, connection to the local community,
and established customer relationships, all combine to form strong barriers to
entry for competitors of the NEC Group.
Skilled Labour is in Short Supply
The NEC Group's base in Lac La Biche and Conklin, Alberta provides it with a
competitive advantage because it has been able to retain many of its current
employees by providing accommodations and familiarity with the clients,
residence and leadership. Advantages in recruiting from the local workforce
are also present and the NEC Group expects to continue to recruit skilled
labour from the local community in the future.
Demand for Civil Services, Maintenance Services and Logistics is Growing
The planned capital expenditures in the Oilsands over the next five years is
estimated to be over $110 billion. (Source: ERCB June 2012, Supply/Demand
outlook report). With the growing infrastructure base comes increased annual
maintenance and operations support budgets in addition to development
spending. Annual expenditures are estimated to grow from $17 billion in 2012
to $32 billion in 2022 in the SAGD market alone. (Source: Canadian Energy
Research Institute (Study No. 128, March 2012)).
Opportunity to Expand Outside of the Oilsands and Diversify Customer Base
With access to additional capital, management believes Northern Frontier will
be able to expand the NEC Group business through additional acquisitions and
geographic expansion. The NEC Group's existing fleet of equipment is highly
utilized servicing its existing customers. Management believes with a larger
fleet of equipment and new service offerings, the NEC Group will be able to
access new industrial markets and gain new customers within its existing
markets. Northern Frontier expects SAGD in the Alberta Oilsands region to be
the highest growth area for industrial development in western Canada for the
next five years.
Strong Board and Management Expertise
Northern Frontier's Board and proposed senior management have experience
buying and building businesses similar to the NEC Group. The Board believes
that the addition of Chris Yellowega, an experienced public company operating
executive, and Monty Balderston, an experienced financial executive with
public company experience, along with the current slate of directors, will
help facilitate the growth strategy and enhance the NEC Group's existing
operating management team. The experience and expertise of the NEC
Shareholders will add to the strength of Northern Frontier's Board and the
proposed management team as the NEC Shareholders will remain with Northern
Frontier for periods of between one and three years after the closing of the
NEC Group Financial Summary
The following Exhibit 1.1 has been prepared by the NEC Group management and
includes specific financial statement balances from the audited consolidated
financial statements of Numberco for the twelve months ended December 31,
2012, the five months ended December 31, 2011, the twelve months ended July
31, 2011 and twelve months ended July 31, 2010 which were prepared in
accordance with Canadian generally accepted accounting principles which are
International Financial Reporting Standards ("IFRS") for the Corporation. The
following financial information includes the accounts of both Numberco and NEC
provided that NEC was incorporated on December 23, 2011, and financial
statements prior to this date only represent the accounts of Numberco.
Year Ended Ended
December 31, December 31, Year Ended Year Ended
July 31, July 31,
$Cdn. 2012 2011 2011 2010
Revenue 42,596,121 13,923,892 29,115,138 13,693,485
Gross profit 8,894,432 2,845,287 6,081,606 1,827,655
Net profit 1,637,169 715,075 1,906,860 (1,053,876)
Total Assets 23,664,002 17,080,787 12,551,202 7,544,533
Total 20,830,085 15,884,039 12,069,529 8,969,740
The following Exhibit 1.2 has been prepared by Northern Frontier to provide
additional disclosure of non-GAAP measures. The pro forma Adjusted EBITDA
reflects combining the NEC Group and CRC Carve-out Assets for the respective
periods presented. Adjusted EBITDA is more fully explained later in this news
release, under the section titled "Non-GAAP Measures".
Year Ended Ended
December 31, December 31, Year Ended Year Ended
July 31, July 31,
$Cdn. 2012 2011 2011 2010
Pro forma 11,161,367 3,165,627 7,516,219 2,688,776
% of revenue 26.2% 22.7% 25.8% 19.6%
Under the Share Purchase Agreement, the Corporation and the Purchaser will
acquire all of the issued and outstanding shares of Numberco on a cash-free,
debt-free basis for an aggregate purchase price of approximately $32.7
million, prior to giving effect to certain closing adjustments. The purchase
price shall be paid to the NEC Shareholders through the issuance by the
Corporation of $5.0 million of common shares in the capital of the Corporation
at a deemed price per common share equal to the Offering Price, and the
payment by the Purchaser of $27.7 million in cash (which amount includes the
consideration payable upon the acquisition of certain real property which the
NEC Group expects to purchase from the Province of Alberta prior to closing of
the Acquisition and an expected post-closing purchase price adjustment of
approximately $4.2 million). Furthermore, the NEC Shareholders will receive
a contingent payment of $2.0 million in cash payable by the Purchaser if the
NEC Group achieves an Adjusted EBITDA of $13.5 million for the 2013 financial
Under the Asset Purchase Agreement, the Purchaser will acquire the CRC
Carve-out Assets for an aggregate purchase price of $15.8 million in cash
(includes an expected post-closing purchase price adjustment of approximately
The Agreements contain customary representations and warranties of each of
Northern Frontier, the Purchaser, the NEC Shareholders and CRC. Pursuant to
the Agreements, the parties have agreed, among other things, to use
commercially reasonable efforts to complete the transactions contemplated by
the Agreements, to advise each other of material changes and to maintain their
respective businesses and not take certain actions outside the ordinary course
The Agreements contain customary mutual conditions precedent as well as a
number of additional conditions precedent in favour of each of Northern
Frontier, the NEC Shareholders and CRC. The Acquisition will not be
consummated unless all such conditions are satisfied or waived by the party or
parties for whose benefit such conditions exist, to the extent they may be
capable of waiver.
The maximum aggregate liability of the NEC Shareholders for indemnification
obligations under the Share Purchase Agreement and of CRC under the Asset
Purchase Agreement is limited to the $5.0 million of common shares of the
Corporation issued as partial consideration for the Numberco Shares, other
than with respect to losses incurred as a result of fraud or willful
misconduct or non-fulfillment of any covenant, or as a result of any
incorrectness in or breach of any fundamental representation. Such common
shares represent the NEC Shareholders' (and CRC's) complete liability for any
losses for which the Corporation and the Purchaser are entitled to recover
under the Agreements.
The individual NEC Shareholders (being Colette Benson and Kevin Benson), along
with Albert Benson, are all of the beneficial owners of both the NEC Group and
CRC, and reside near Lac La Biche, Alberta. The non-individual NEC
Shareholders are all legal entities incorporated or organized under the laws
of the Province of Alberta and are controlled collectively by Colette, Kevin
and Albert Benson.
Concurrent with, and as a condition to the obligations of the Corporation and
the Purchaser to complete the Acquisition, the Corporation intends to complete
the fully-marketed Offering of Subscription Receipts, and has engaged GMP
Securities L.P. and Raymond James Ltd. as co-lead agents. The Subscription
Receipts will be priced in the context of the market and each subscription
receipt will entitle the holder thereof to receive, without payment of
additional consideration, one common share of the Corporation upon the
completion of the Acquisition. The Corporation has engaged the Agents and will
pay the Agents a cash commission of 6% of the aggregate gross proceeds raised
in connection with the Offering. The Corporation will also grant the Agents
an Over-Allotment Option exercisable, in whole or in part, on the closing of
the Offering and for a period of 30 days thereafter. The net proceeds of the
Offering will be used to fund the Acquisition.
Conditions Precedent to Completion of the Acquisition
Completion of the Acquisition is subject to a number of conditions, including
but not limited to:
(a) the conditional acceptance of the Exchange;
(b) the Corporation having raised proceeds in the Offering or
otherwise obtained financing sufficient to satisfy the
Corporation's and the Purchaser's respective obligations in
respect of the Acquisition;
(c) the absence of any material adverse effect with respect to the
NEC Group, the CRC Carve-out Assets or the Corporation; and
(d) other customary conditions to closing.
Share Capital of the Corporation
The Corporation currently has 918,533 common shares issued and outstanding.
Proposed Board of Directors and Management
After completion of the Acquisition, the proposed Board of Directors of the
Resulting Issuer will be comprised of nine directors: Bradford N. Creswell,
John R. Jacobs, Trevor Haynes, Darin R. Coutu, Edward J. Redmond, Don Basnett,
Darrell R. Peterson, Rob Hunt and Chris R. Yellowega. All of the Proposed
Directors are current directors of the Corporation with the exception of Chris
The proposed senior officers of the Resulting Issuer appointed by the Board of
Directors following completion of the Acquisition will include Chris R.
Yellowega as President and Chief Executive Officer and Monty R. Balderston as
Executive Vice President, Chief Financial Officer and Corporate Secretary.
The following is a background of each of the proposed directors and officers
of the Resulting Issuer.
Chris R. Yellowega - Proposed Director, President and Chief Executive Officer
Mr. Yellowega will be appointed as the President and Chief Executive Officer
and a director at the closing of the Acquisition. Mr. Yellowega will fulfill
his role as the President and Chief Executive Officer on a full-time basis.
Mr. Yellowega is an experienced senior executive and Professional Engineer.
He has 20 years of varied experience in engineering, operations, maintenance
and senior management roles in the mining and energy industries. Mr.
Yellowega brings a depth of experience in operating and service markets in the
target business areas for Northern Frontier and has a strong business focus on
strategy, execution and cost. From 2008 to 2012, Mr. Yellowega was Vice
President, Construction and prior thereto Vice President, Operations with
North American Energy Partners Inc. ("North American"), a provider of mining,
heavy construction, industrial, piling and pipeline services in western
Canada. North American is listed on the New York Stock Exchange ("NYSE") and
the Toronto Stock Exchange ("TSX") under the trading symbol "NOA". From 2005
to 2008, he was Vice President, Upstream with Synenco Energy Inc. ("Synenco"),
a former Oilsands resource development company involved in the Northern Lights
upstream mining and bitumen extraction project which was listed on the TSX.
Synenco was acquired by Total SA in 2008. From 2000 to 2005, Mr. Yellowega
was a senior manager with Shell's Oilsands group, involved with the Muskeg
River Mine development for Albian Sands Energy Inc.
Mr. Yellowega graduated from the University of Alberta in 1993 with a Bachelor
of Science degree in Mining Engineering.
Monty R. Balderston - Proposed Executive Vice President, Chief Financial
Officer and Corporate Secretary
Mr. Balderston will be appointed as the Executive Vice President, Chief
Financial Officer and Corporate Secretary at the closing of the Acquisition.
Mr. Balderston will fulfill his role as Executive Vice President, Chief
Financial Officer and Corporate Secretary on a full-time basis. Mr.
Balderston is a Chartered Accountant with over 17 years of experience,
including over 10 years in senior leadership roles with publicly traded
companies. From June 2011 to April 2012, he acted as Chief Financial Officer
of Silica North Resources Ltd., a privately held start-up company focused on
developing deposits and supplying proppant (frac sand) to the oil and natural
gas industry. From May 2003 to June 2011, Mr. Balderston held various senior
financial roles including Chief Financial Officer from March 2008 to June 2011
of Peak Energy Services Ltd. ("Peak"), a diversified energy services company
providing drilling and production services to its customers in both the
conventional and unconventional oil and natural gas industry in western Canada
and the United States, as well as the Oilsands regions of western Canada.
Peak was listed on the TSX until it was purchased by Clean Harbors Inc. in
June 2011. From May 2000 to July 2002, he held senior financial roles with
International Properties Group Ltd., a real estate company, which was listed
on the TSX until late 2002. From September 1995 to April 2000, Mr.
Balderston was with the accounting firm PricewaterhouseCoopers LLP and held
various progressive finance related roles in both the audit and management
Mr. Balderston graduated from the Northern Alberta Institute of Technology
with a Finance Diploma (with Honors) in 1991 and graduated from the University
of Alberta with a Bachelor of Commerce degree (with Distinction) in 1995. He
earned his Chartered Accounting designation in the Province of Alberta in 1998.
Bradford N. Creswell - Proposed Director
Mr. Creswell is the President and has been a director of the Corporation since
October 2011. Mr. Creswell is a partner and co-founder of NCA Management LLC
(formerly Northwest Capital Appreciation, Inc.) ("NCA"), a private equity firm
which he co- founded in Seattle, Washington in 1992. In 2006, a limited
liability partnership organized by NCA acquired NC Services Group Ltd.
("NCSG"), an Edmonton, Alberta based crane and heavy haul company serving the
refining, oil and natural gas and wind energy sectors in western Canada and
the Northwestern United States.
Mr. Creswell currently serves on the board of directors of NCSG and is a
member of the audit committee, and on the board of directors of Warwick &
Kent Holdings Ltd., a private Alberta-based steel fabrication and industrial
structures company serving the Western Canadian energy industry. Mr.
Creswell previously has served on the board of directors and audit and
compensation committees of numerous private companies, and was Chief Financial
Officer of Carson Products Corporation, a public, global manufacturer and
marketer of hair care products listed on the NYSE.
Prior to founding NCA, from 1986-1992, Mr. Creswell was a Vice President in
the Corporate Finance and Investment Banking Group of Bankers Trust Company in
Mr. Creswell earned a Bachelor of Arts degree in Business Administration from
the University of Puget Sound in 1982. Mr. Creswell began his career as a
Certified Public Accountant with Arthur Young & Company in Denver, Colorado.
After practicing for three years he attended business school at The Amos Tuck
School of Business at Dartmouth where he earned a Masters of Business
Administration degree in 1987.
On closing of the Acquisition, Ms. Creswell will resign as an officer but will
remain as a director of the Corporation.
John R. Jacobs - Proposed Director
Mr. Jacobs is the Chief Executive Officer and has been a director of the
Corporation since October 2011. Mr. Jacobs is also a partner with NCA. At
NCA, Mr. Jacobs is involved with the Corporation's organization activities and
serves on the board of directors of NCSG. Mr. Jacobs is a member of the
board of directors of Warwick & Kent Holdings Ltd., a private Alberta-based
steel fabrication and industrial structures company serving the Western
Canadian energy industry. Mr. Jacobs previously has served on the board of
directors of numerous private companies, and was a board member and the chair
of the compensation committee and member of the audit committee of Fuel
Systems Solutions, Inc., a NASDAQ listed public company, between 2004 and 2007.
Prior to joining NCA, Mr. Jacobs spent 23 years in investment banking and
commercial banking in New York and Seattle. For more than 15 years, Mr.
Jacobs worked for Piper Jaffray & Co. ("Piper Jaffray"), a U.S. New York Stock
Exchange publicly listed investment banking firm. For more than 10 years,
Mr. Jacobs led Piper Jaffray's Seattle-based investment banking practice and
founded the firm's global technology practice. Prior to joining Piper
Jaffray, Mr. Jacobs worked for The Chase Manhattan bank in New York City where
he worked with the commercial bank, as well as the investment bank.
Mr. Jacobs graduated with honors from Ohio Wesleyan University with a Bachelor
of Arts degree in 1976 in addition to earning his Masters of International
Management degree from the Thunderbird School of Global Management in 1981.
On closing of the Acquisition, Mr. Jacobs will resign as an officer but will
remain as a director of the Corporation.
Trevor Haynes - Proposed Chairman and Director
Mr. Haynes is the Chairman and a director of the Corporation. From 2003 to
present, Mr. Haynes has served as the President, Chief Executive Officer and a
director of Black Diamond Group Limited, a modular building, remote lodging
and energy services company headquartered in Calgary, Alberta listed on the
TSX. From February 2007 to October 2009, Mr. Haynes was also a director of
Aqueous Capital Corp., a former capital pool company listed on the TSXV.
From January 2003 to May 2005, he was the President and Chief Executive
Officer of Kettleby Investment Management, a private holding company involved
in construction and real estate development. From February 1992 to December
2002, he held various positions of increasing responsibility with ATCO
Structures & Logistics Ltd., a company that at the time was primarily involved
in modular structures and remote accomodations. Mr. Haynes is currently a
director of NCSG, Petroleum Services Association of Canada and The Fig Tree
Mr. Haynes graduated from the University of Toronto with a Bachelor of Arts
degree in 1991.
Don Basnett - Proposed Director
Mr. Basnett is a director of the Corporation. Mr. Basnett has over 38 years
of experience in providing electrical/instrumentation maintenance and
construction services during his tenure as the President and Chief Executive
Officer of Pyramid Corporation, a privately-owned company, offering products
and services to companies in the petroleum, petrochemical, mining, wood
products, agricultural and industrial sectors. Mr. Basnett currently serves
as a member of the board of directors of NCSG and of Warwick & Kent Holdings
Ltd., a private Alberta-based steel fabrication and industrial structures
company serving the Western Canadian energy industry.
Darin R. Coutu - Proposed Director
Mr. Coutu is a director of the Corporation. Mr. Coutu is a chartered
accountant with over 22 years experience, including nine years in senior
leadership roles with publicly traded companies. Currently, Mr. Coutu is the
Chief Financial Officer for NCSG, an Edmonton, Alberta-based crane and heavy
haul company serving the refining, oil and natural gas and wind energy sectors
in western Canada and the Northwestern United States. NCSG owns and operates
Northern Crane, Mullen Crane & Transport and TransTech a heavy haul trucking
company. From October 2007 to December 2010, Mr. Coutu acted as Chief
Financial Officer of ZCL Composites Inc., a designer, manufacturer and
supplier of cost-effective fiberglass tank systems to the petroleum industry,
which trades on the TSX under the symbol "ZCL". From July 2005 to October
2007, he served as the Chief Financial Officer of Rentcash Inc., a provider of
alternative financial products and services. Mr. Coutu also held the
position of Chief Accountant with Canadian Western Bank from January 2003 to
July 2005 and was with the accounting firm of KPMG LLP from December 2000 to
December 2002 as a Senior Principal with the firm.
Mr. Coutu graduated from the University of Alberta with a Bachelor of Commerce
degree in 1989 and also earned his Chartered Accountant designation in the
Province of Alberta in 1992. Mr. Coutu has also served as director of
non-for-profit organizations, including Junior Achievement.
Rob Hunt - Proposed Director
Mr. Hunt is a director of the Corporation. Mr. Hunt is a retired business
executive with over 33 years experience in management, senior leadership roles
and strategy development with both private and public resource companies in
Canada and the United States. He is currently a director of Northwestel, a
wholly-owned subsidiary of Bell Canada. Mr. Hunt is also a director and
chairman of Golconda Resources Ltd. and sits on a number of advisory boards
for private companies. Prior to retiring at the end of 2008, Mr. Hunt was
the President of Horizon North Logistics Inc., a remote resource development
service company that provides workforce accommodation solutions, camp
management and catering services, and road and access matting solutions.
From 1988 to 2006, he was the Senior Vice President of Akita Drilling Ltd.
Darrell R. Peterson, Proposed Director
Mr. Peterson is a director of the Corporation. He is a Partner with Bennett
Jones LLP, an international business law firm specializing in energy and
corporate law. Mr. Peterson's practice is focused on corporate and
securities law, with a specialization in mergers and acquisitions, corporate
reorganizations and public and private financings. His practice involves
acting for public and private issuers, private equity participants and
institutional investors. He also advises issuers on the structuring and
implementation of corporate governance practices.
Mr. Peterson has a Bachelor of Law degree from Queens University, a Master of
Science and Bachelor of Science degrees from the University of Alberta, and an
ICD.D designation from the Institute of Corporate Directors. He also serves
as Corporate Secretary for several publicly listed issuers and as a director
of a number of private companies.
Edward J. Redmond - Proposed Director
Mr. Redmond is a director of the Corporation. Mr. Redmond is the President
and Chief Executive Officer and a director of NCSG, an Edmonton, Alberta-based
crane and heavy haul company serving the refining, oil and natural gas and
wind energy sectors in western Canada and the Northwestern United States.
NCSG owns and operates Northern Crane, Mullen Crane & Transport and TransTech
a heavy haul trucking company. Mr. Redmond has more than 25 years of
operating, transactional and business advisory experience in the Crane,
Transportation, Energy, and Utilities industries.
For the last 14 years, Mr. Redmond has held senior leadership roles including
as the President, Chief Executive Officer, and Executive Vice President for a
number of private and public organizations including: (i) Executive
Vice-President of the Energy Products and Services Segment of McCoy
Corporation, a company listed on the TSX that provides equipment and services
to the upstream oil and natural gas industry, from November 2006 to August
2010; (ii) investment banking partner specializing in turnaround management
and sell-side mergers and acquisitions for Kirchner & Company, a private
company focused on providing advice to the private equity owners of businesses
looking to improve and/or sell the businesses they owned, from September 2004
through November 2006; (iii) Chief Executive Officer of Lacent Technologies, a
private company that designed, manufactured and sold laser cutting equipment
for the automotive and garment industries, from March 2003 to September 2004
taking the company through a sale process and selling to Lectra S.A. based in
France; and (iv) President of Surface Engineered Products, a private company
that designed and provided specialized coatings for petrochemical companies
and other industries, from January 1997 through March 2003.
Mr. Redmond obtained a Master of Business Administration degree from the
Stanford Business School in 1990, a Master of Science degree in Engineering
from the University of Toronto in 1985 and a Bachelor of Science degree in
Engineering from the University of Alberta in 1983.
Arm's Length Transaction
The Acquisition will be an arm's length transaction as none of the directors,
officers or insiders of the Corporation own any securities of the NEC Group or
CRC. The Acquisition will not be subject to approval of the shareholders of
The Corporation will apply for an exemption from sponsorship requirements
pursuant to Exchange Policy 2.2 - Sponsorship and Sponsorship Requirements.
There is no assurance, however, that it will obtain this exemption. Trading in
the Common Shares will remain halted until such time as the Exchange has
received the documentation required by Policy 2.4 - Capital Pool Companies.
Completion of the Acquisition is subject to a number of conditions including,
but not limited to, Exchange acceptance and if applicable pursuant to Exchange
Requirements, majority of the minority shareholder approval. Where applicable,
the Acquisition cannot close until the required shareholder approval is
obtained. There can be no assurance that the Acquisition will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the Prospectus of the
Corporation, any information released or received with respect to the
Acquisition may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
Acquisition and has neither approved nor disapproved the contents of this news
"Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation
and amortization and other specific expenses and exclusive of the charges paid
to CRC for the rental of the CRC Carve-out Assets net of associated costs
incurred by CRC related to these assets. Adjusted EBITDA is a supplemental
non-GAAP financial measure that is not recognized under IFRS and does not have
a standardized meaning prescribed by IFRS. Adjusted EBITDA should not be
considered as an alternative to, or more meaningful than, net profit and
comprehensive income or cash flows from operating activities as determined in
accordance with IFRS or as an indicator of operating performance or
liquidity. Management believes that Adjusted EBITDA is a useful supplemental
measure as it provides an indication of the results generated by the principal
business activities after considering CRC's related party relationship with
the NEC Group and prior to consideration of how these activities are financed
or how the results are taxed in various jurisdictions. The computations of
Adjusted EBITDA may not be comparable to other similarly titled measures of
other companies, and accordingly Adjusted EBITDA may not be comparable to
measures used by other companies.
Forward Looking Information
This news release includes certain statements that constitute forward-looking
statements under applicable securities legislation. All statements other than
statements of historical fact are forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential", "continue", or the negative of these terms or other
comparable terminology. These statements are made as of the date of this news
release and the Corporation does not undertake to publicly update these
forward-looking statements except in accordance with applicable securities
laws. These forward-looking statements include, among other things:
-- completion of the Acquisition and the Offering;
-- use of net proceeds from the Offering;
-- completion of the Credit Facility as proposed or at all;
-- anticipated benefits of completing the Acquisition and the
-- terms and conditions of the Acquisition; and
-- the description of the Resulting Issuer following completion of
the Acquisition, including composition of management of the
These statements are only predictions and are based on current expectations,
estimates, projections and assumptions, which the Corporation believes are
reasonable but which may prove to be incorrect and therefore such
forward-looking statements should not be unduly relied upon. In making such
forward-looking statements, assumptions have been made regarding, among other
things, industry activity, marketability of the services of the NEC Group, the
state of financial markets, business conditions, continued availability of
capital and financing, future oil and natural gas prices and the ability of
the Corporation to obtain necessary regulatory approvals. Although the
Corporation believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements.
By its nature, forward-looking information involves numerous assumptions,
known and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and
other forward-looking statements will not occur. These risks and uncertainties
include: the possibility that the parties will not proceed with the
Acquisition and the Offering, that the ultimate terms of the Acquisition and
the Offering will differ from those that are currently contemplated, that the
Acquisition and Offering will not be successfully completed for any reason
(including the failure to obtain the required approvals from regulatory
authorities) and regulatory changes. Investors are cautioned that
forward-looking statements are not guarantees of future performance and actual
results or developments may differ materially from those projected in the
forward-looking statements. For more information on the Corporation, investors
should review the Corporation's continuous disclosure filings that are
available at www.sedar.com.
Neither 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.
For further information on Northern Frontier Corp., please contact:
Northern Frontier Corp. Bradford N. Creswell - President and Director Phone:
(206) 689-5685 Fax: (206) 204-1710
SOURCE: Northern Frontier Corp.
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CO: Northern Frontier Corp.
NI: MNA NEWSTK 2575 WNEWS
-0- Apr/23/2013 16:36 GMT
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