Tickers: XTSX:DE, XTSX:DE.P
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August 16, 2019 - TheNewswire - Kelowna, British Columbia - Decisive Dividend Corporation (TSXV:DE) ("Decisive" or the "Company"), a diversified acquisition-oriented company, is pleased to announce that it has completed its previously announced acquisition (the "Northside Acquisition") of 0854851 B.C. Ltd., which operates as Northside Industries ("Northside"). The vendors of Northside are arm's length to Decisive.
At closing, Decisive paid aggregate consideration to Northside vendors of $12,237,541, representing the base purchase price of $12,000,000, plus upward adjustments of: $200,041 for estimated closing working capital in excess of the target working capital; and $37,500 for certain capital expenditures agreed to by the parties.
In satisfaction of the closing payment, Decisive made a cash payment to the Northside vendors of $11,037,541 from the proceeds of its new credit facility and issued to the Northside vendors 316,539 common shares of Decisive (representing $1,200,000 divided by $3.791, being the volume weighted average trading price of the common shares of Decisive for the ten trading day period ended August 15, 2019). Accordingly, there is no requirement for the company to issue any additional equity to complete this transaction.
The purchase price is subject to customary post-closing adjustments based upon confirmation of closing working capital plus up to an additional $4,000,000 contingent on Northside meeting certain earnings targets over the next three years.
The Northside Acquisition is anticipated to be financially accretive for Decisive as it is expected to result in significant increases in sales, gross profit, profit before taxes, and Adjusted EBITDA, which is a non-GAAP financial measure used by Decisive. Further particulars regarding this non-GAAP financial measure, as well as certain (unaudited) historical financial information concerning Northside and the combined pro forma historical financial results of Northside, Decisive, and its current operating subsidiaries, are set forth in Decisive's material change report dated August 8, 2019, a copy of which is available on Decisive's profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Decisive is also pleased to announce that it has finalized and entered into a new credit agreement with the Bank of Nova Scotia ("BNS") and Roynat Inc., a subsidiary of BNS. As previously announced, the new credit agreement provides for the following:
- a $10,000,000 revolving term loan bearing interest at BNS's prime rate plus 1% or bankers' acceptances plus 2.5%, and standby fees of 0.25% on the unused portion of the revolving term loan. The revolving term loan is for a committed three-year term.
- a $21,200,000 term loan, bearing interest at a fixed rate of 8.0% with no required principal payments for the three-year term of the loan.
The new credit agreement replaced the Company's pre-existing debt facilities with BNS and was used to fund the cash portion of the consideration for the Northside Acquisition as outlined above. This new debt structure better aligns with Decisive's objectives as it provides increased flexibility to manage through short-term fluctuations in demand driven by, among other things, weather, seasonality or other macro-economic factors.
James Paterson, Chief Executive Officer of Decisive, noted:
"We are very pleased to be adding Northside into our group of companies and to be able to do so on the back of a new credit facility. Northside adds geographic and industry diversity to Decisive, as well as opportunities for growth in new markets. Northside's management team has done a terrific job in building the business to where it is today, and we welcome them to the Decisive group. This is Decisive's third acquisition in the last fifteen months and demonstrates our commitment to our long-term objectives of acquiring a growing stable of specialty manufacturing companies, diversifying our overall business risk profile and returning a steady income stream to our shareholders. We also now have a debt structure that is much better aligned with these core objectives."
About Decisive Dividend Corporation
Decisive Dividend Corporation is an acquisition-oriented company, focusing on the manufacturing sector. The Company uses a disciplined acquisition strategy to identify already profitable, established companies that have strong management teams, generate steady cash flow, operate in non-cyclical markets, and have opportunity for future growth.
FOR FURTHER INFORMATION PLEASE CONTACT:
David Redekop, Director and Chief Corporate Development Officer
#201, 1674 Bertram Street
Kelowna, BC V1Y 9G4
Telephone: (250) 870-9146
Cautionary Statements
Neither the 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 the contents of this News Release.
Forward-Looking Statements
Certain statements in this press release contain forward-looking information and constitute forward-looking statements. All statements other than statements of historical fact contained in this report are forward-looking statements, including, without limitation, statements regarding the future financial position, operations, business strategy, plans and objectives, future acquisitions, and the potential impact of the Northside acquisition and debt refinancing on the operations, financial condition, capital resources, business and dividend policy of the Company. Readers can identify many of these forward-looking statements by looking for words such as "believes", "expects", "will", "may", "intends", "projects", "anticipates", "plans", "estimates", "continues" and similar words or the negative and grammatical variations thereof.
Forward-looking statements are necessarily based upon a number of expectations and assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are beyond the Company's control and many of which are subject to change. Readers are cautioned to not place undue reliance on forward-looking statements which only speak as to the date they are made. Although management believes that the expectations and assumptions underlying such forward-looking statements are reasonable, there can be no assurance that such expectations or assumptions will prove to be correct. A number of factors could cause actual future results, performance, achievements and developments of the Company to differ materially from anticipated results, performance, achievements and developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to: general economic conditions; government regulation; environmental regulation; operational performance and growth; acquisition risk; dependence on distributors and strategic relationships; ability to develop new products; weather and climate; supply and cost of raw materials and purchased parts; foreign exchange exposure; implementation of growth strategy; competition; reliance on management and key personnel; financing risk; litigation; product liability and warranty claims; credit facilities; income tax matters; dividends; reliance on technology; market trends and innovation; employee and labour relations; conflicts of interest; trading volatility of the Company's shares; information technology; potential failure to achieve synergies and customer concentration risk.
Assumptions about the performance of the businesses of the Company are considered in setting the business plan and financial targets for the Company and its businesses. Key assumptions include assumptions relating to the demand for products and services of the businesses of the Company and the Canadian and other markets in which the businesses are active. Should one or more of the risks materialize and/or the expectations/assumptions prove incorrect, actual results, performance or achievements of the Company may vary materially from those described in forward-looking statements.
All forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company disclaims any obligation to update any forward-looking information or forward-looking statements to reflect future events or results or otherwise.
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