The purchase price for all of the shares of T.C. was $12,000,000 and $1,924,000 for additional equipment and inventory. The total purchase was funded by cash, 1,500,000 common shares of Enterprise Oil Limited at $0.80 per share and a vendor take back loan of $1,000,000 repayable over two years. Two of the three vendors have signed five year employment and non-compete agreements ensuring their full commitment for continued growth under Enterprise’s business plan. The third vendor has signed a two year consulting and a five year non-compete agreements.
T.C.’s audited financial statements for the 2006 fiscal year end resulted in revenue of $11,934,000 and EBITDA(1) of $5,995,000. T.C. has been operating for over 30 years and generates the majority of its revenue from utility companies with approximately 20% from the energy services sector. Directional drilling and installation of underground power, telecommunications and natural gas lines are the core business of the company. The development of industrial, commercial and residential properties require full underground installation of services. As a result of the rapid growth Western Canada is experiencing, the outlook for this sector is exceptional. T.C.’s customers include some of Canada’s largest providers of telecommunications, cable television, electricity, and natural gas services. Enterprise anticipates T.C. to show further improvement in the current fiscal year. This acquisition is accretive to Enterprise.
Enterprise’s strategy is to continue to grow T.C. in its core market while expanding its services to the energy services sector. Pipeline construction projects routinely require directional drilling services when approaching roads, creeks, rivers and other environmentally sensitive areas. Enterprise believes that directional drilling will play a much larger roll in the future of pipeline construction because of environmental awareness. Management views this acquisition as a key step in the company’s strategic business plan.
Further to the release dated September 18, 2006 announcing a letter of intent to purchase a pipeline construction company operating in the west central Alberta region, after further review Enterprise has decided not to proceed with this acquisition.
Enterprise has granted, subject to regulatory approval, incentive stock options for the purchase of a total of 1,330,000 common shares of its capital to directors, employees and consultants of the Corporation. The options are exercisable at a price of $0.82 per share.
Enterprise Oil Limited is an energy services company operating in the pipeline
construction industry. The Company’s focus is small to medium diameter pipeline construction primarily on steel gathering systems up to 12″ in diameter. The Company’s strategy is to acquire small to mid-size pipeline
construction and complementary service companies in central and northern Alberta, consolidating capital, management and human resources to support continued growth.
(1) EBITDA = earnings before interest, taxes, depreciation, amortization.
Forward Looking Statements
This Company Press Release contains certain “forward-looking” statements and information relating to the Company that are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors and strategic partners, the interest rate environment, governmental regulation and supervision, seasonality, technological change, changes in industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.