/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR
DISTRIBUTION TO THE UNITED STATES
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY,
Aug. 28, 2014 /CNW/ - Northern
Frontier Corp. (TSXV: FFF) (the "Corporation" or
"Northern Frontier") is pleased to provide an update
to the Corporation's news release dated August 11, 2014, announcing that Northern
Frontier has completed the Acquisition (as defined below) of
Central Water & Equipment Services Ltd. ("Central
Water"), has entered into New Senior Credit Facilities (as
defined below) and closed a $20.0
million bought deal equity offering (the "Offering").
"Northern Frontier is very pleased it has successfully completed
these transactions and looks forward to the inclusion of Central
Water's talented team and excellent service offering to anchor our
logistics business" noted Chris
Yellowega, President and CEO.
Acquisition of Central Water
Northern Frontier completed the acquisition (the
"Acquisition") of Central Water, pursuant to the terms and
conditions of a share purchase agreement, as previously disclosed.
Central Water is a leading logistics service provider in the bulk
water and fluids transfer sector in western Canada. Central Water's primary business is
providing services for the bulk movement of water used in the
testing of large infrastructure storage tanks and pipelines as well
as dewatering and other services for industrial sites.
Aggregate consideration paid on closing was
$27.0 million, comprised of a cash
payment of $22.1 million and the
issuance of 1.86 million Units (as defined below) with an aggregate
value of approximately $4.0 million.
An additional $0.6 million in cash
was also paid for current year growth capital expenditures.
Furthermore, $4.9 million in cash was
placed in escrow, for contingent earn-out consideration, which is
payable at a 3.6x multiple to the extent that Central Water's
trailing 12 month EBITDA (as defined below under the heading
"Advisories - Non-GAAP Measures") exceeds $7.1 million, to a maximum amount payable of
$4.9 million.
New Senior Credit Facilities
The Corporation has established new senior
credit facilities ("New Senior Credit Facilities"), in
conjunction with and as a condition of, the closing of the
Acquisition and the Offering. On closing, Northern Frontier drew
down $44.6 million on the New Senior
Credit Facilities, plus an additional $4.9 million that was placed
in escrow for the earn-out provision noted above. The principal
terms of the New Senior Credit Facilities are as disclosed in the
Corporation's new release dated August 11,
2014. Furthermore, Northern Frontier obtained waivers from
its existing lenders for its June 30,
2014 covenant breach, as disclosed in a news release dated
August 18, 2014, and concurrently
repaid and terminated all of its existing credit facilities,
exclusive of existing finance leases of which approximately
$3.6 million is currently
outstanding. As of August 28, 2014,
the Corporation is in compliance with all of its credit
facilities.
Bought Deal Equity Offering
Northern Frontier has issued 9,303,000 units
(the "Units") to the syndicate of investment dealers co-led
by Cormark Securities Inc., Acumen Capital Finance Partners Limited
and GMP Securities L.P. and including M Partners Inc. (the
"Underwriters") comprised of one common share of the
Corporation ("Common Shares") and one warrant of the
Corporation ("Warrants") at a price of $2.15 per Unit (the "Offering Price") for
gross proceeds to the Corporation of approximately $20.0 million. Each Warrant entitles the holder
to acquire one common share of the Corporation at a price of
$3.40 per Warrant Share until
February 28, 2016.
In addition, the Company has granted the
Underwriters an option to purchase up to an additional 1,395,450
Units from the treasury of the Corporation at the Offering Price
for additional gross proceeds to the Corporation of up to
approximately $3.0 million,
exercisable at any time up to September 26,
2014, for market stabilization purposes and to cover
over-allotments, if any.
The Units issued under the Offering were offered
by way of a short form prospectus filed with the securities
regulatory authorities in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, and offered in the United States on a private placement basis
pursuant to an exemption from the registration requirements of the
United States Securities Act of 1933, as amended, and
certain other jurisdictions.
Reader Advisory
Securities Law Matters
This news release does not constitute an
offer to sell or the solicitation of an offer to buy any security
and shall not constitute an offer, solicitation or sale of any
securities in any jurisdiction in which such offering, solicitation
or sale would be unlawful.
This news release does not constitute an
offer of securities for sale in the
United States. The securities being offered have not been,
nor will they be, registered under the United States Securities Act
of 1933, as amended, and such securities may not be offered or sold
within the United States absent
U.S. registration or an applicable exemption from U.S. registration
requirements.
Non-GAAP Measure
EBITDA, which is defined by the Corporation
as earnings before finance costs, taxes, depreciation and
amortization, gain/loss on disposal of property and equipment,
share-based compensation and other specified items, is a non-GAAP
measure that does not have a standardized meaning prescribed by
GAAP. Therefore, this financial measure may not be comparable to
similar measures presented by other issuers. Investors are
cautioned that this measure should not be construed as an
alternative to profit or cash flow from operating activities
determined in accordance with GAAP as an indicator of the
Corporation's performance. The Corporation's Management believes
that EBITDA is a useful supplemental measure as it provides an
indication of the results generated by the principal business
activities prior to consideration of how these activities are
financed or how the results are taxed in various
jurisdictions.
Additional disclosure regarding EBITDA is
included within the Corporation's Fiscal 2013 and Q2 2014
Management's Discussion and Analysis and other required disclosure
documents which are available and filed under the Corporation's
profile on SEDAR at www.sedar.com.
Forward-Looking Statements
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
forward-looking statements include, among other things, statements
in respect of:
- anticipated use of net proceeds from the New Credit
Facilities and the Offering;
- anticipated benefits of completing the Acquisition, New
Credit Facilities and the Offering;
- expectations of future financial performance of the
Corporation; and
- the diversification of the Corporation's
operations.
These statements are only predictions and are
based upon 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, the state of financial
markets, business conditions, continued availability of capital and
financing and future oil and natural gas prices. 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: that the Corporation's financial performance
does not transpire as expected, that the Corporation declares any
future dividends or the form of payment thereof 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. The Corporation has no obligation
to update any forward-looking statements set out in this news
release, except as required by applicable law.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to
create a substantial industrial and environmental services business
through a buy and build growth strategy. Currently, the Corporation
provides civil construction and excavation services to the
industrial energy industry, primarily in the in situ
Oilsands region south of Fort McMurray,
Alberta and on closing of the Acquisition, now provides bulk
water and fluids transfer logistic services in western Canada.
The Corporation's common shares and common share
purchase warrants are listed on the TSX Venture Exchange under the
trading symbol "FFF" and "FFF.WT", respectively.
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.
SOURCE Northern Frontier Corp.