CALGARY, March 13, 2018 /PRNewswire/ - Horizon North
Logistics Inc. ("Horizon North" or the "Corporation") (TSX: HNL.TO)
announced today that the Corporation has entered into a binding
letter of intent (the "Binding Letter of Intent") with respect to
the acquisition of Shelter Modular Inc. ("Shelter Modular") and
provided an update on the Corporation's Modular Solutions
operations.
Shelter Modular Acquisition
Horizon North and Shelter Modular, a full-service modular
construction provider based in Aldergrove, British Columbia, have signed a
Binding Letter of Intent pursuant to which Horizon North has agreed
to make an offer to purchase (the "Offer") all of the issued and
outstanding common shares of Shelter Modular (the "Shelter Shares")
for $4.75 million, payable in a mix
of common shares of Horizon North ("Horizon Shares") and assumption
of existing debt. The Binding Letter of Intent is subject to
certain conditions, including the receipt of all necessary and
required consents, including those from the Toronto Stock Exchange
and the Corporation's lending syndicate. The transaction is
scheduled to close in mid-April
2018.
The Offer will be made pursuant to an exempt take-over bid. The
Offer will be subject to a number of conditions including, among
others, there being validly deposited under the Offer and not
withdrawn such number of Shelter Shares that represents at least
90% of the outstanding Shelter Shares calculated on a fully-diluted
basis. Certain conditions may be waived by Horizon North at any
time both before and after the time of expiry of the Offer. Shelter
Modular has agreed not to solicit further offers or initiate
discussion or negotiations with any third party with respect to an
alternative transaction involving Shelter Modular until closing of
the transaction.
"The strategic acquisition of Shelter Modular immediately
provides Horizon North with additional manufacturing capacity to
meet increasing demand in our Modular Solutions division," says
Rod Graham, President and Chief
Executive Officer of Horizon North. "Along with exposure to future
opportunities to grow the modular business and gain additional
market share, this acquisition provides for improved access to
lower mainland British Columbia.
This lowers transportation costs and increases labour efficiency to
provide best in class service for our existing municipal and
provincial government clients."
In addition to several contracts being executed to provide
modular housing solutions for the Vancouver Affordable Housing
Agency ("VAHA"), the Corporation is also working closely with the
BC Housing Management Commission ("BC Housing") as they execute on
a commitment from the Government of British Columbia (the "Province") to build
supportive homes for people struggling with homelessness. In
addition to $291 million allocated in
2017 to support the construction of 2,000 modular housing units
across various centres in British
Columbia, the Province's Budget 2018 provides substantial
additional funding over the next three years to continue building
affordable and student housing infrastructure across the
province.
"Building on our current successful construction projects with
VAHA and BC Housing, Horizon North is committed, through this new
property and our Center of Excellence facility on traditional
Tk'emlúps te Secwe'pemc land in Kamloops, to providing a made-in-British-Columbia solution to support the work
of these government agencies in introducing critically needed
housing for vulnerable BC citizens," adds Rod Graham.
Modular Solutions Update
Horizon North continues to add certainty to its Modular
Solutions project portfolio for the remainder of 2018 and beyond.
As of February 28, 2018, backlog in
the Modular Solutions division sits at $46.2
million with high probability line of sight to an additional
$131.4 million of projects. This
compares to $43.9 million and
$148.0 million respectively at
December 31, 2017.
In the first two months of 2018, several high probability
opportunities converted into backlog and more than offset the
projects executed in the same timeframe. The backlog and high
probability opportunities at February 28,
2018 consist of a variety of development projects, including
government sponsored affordable housing, multi-phased condominiums,
hotels, hostels, Aboriginal housing and commercial infrastructure,
and Karoleena residential homes.
"We are encouraged by the growth of our Modular Solutions
portfolio and its increasing profile as a percentage of our overall
revenues," says Rod Graham,
President and Chief Executive Officer of Horizon North. "We are
also pleased to see a growing diversification in our projects,
including a recently signed contract with Hostelling International
Canada to construct a new purpose-built hostel in Jasper, Alberta."
About Horizon North
Horizon North is a publicly listed corporation (TSX: HNL.TO)
providing a full range of industrial, commercial, and residential
products and services. Our Industrial Services division
supplies workforce accommodations, camp management services, access
solutions, maintenance and utilities. Our Modular Construction
division integrates modern design concepts and technology with
state of the art, off-site manufacturing processes; producing high
quality building solutions for commercial and residential offerings
including offices, hotels, and retail buildings, as well as
distinctive single detached dwellings and multi-family residential
structures. As a result of our diverse product and service
offerings, Horizon North is uniquely positioned to meet the needs
of our customers in numerous sectors, anywhere in Canada.
Corporate Information
Additional information related to Horizon North, including the
Corporation's annual information form, press releases, financial
statements and MD&A are available on SEDAR
at www.sedar.com
Forward-looking Statements
This press release contains "forward-looking statements" or
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities legislation. Such forward-looking statements
include, without limitation, forecasts, estimates, expectations and
objectives for future operations that are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of Horizon North. Forward-looking statements are statements
that are not historical facts and are generally, but not always,
identified by the words "will", "expects", "believes",
"anticipates" and similar expressions. This press release contains
forward-looking statements pertaining to, among other things, the
following: the making of the Offer, conditions of the Offer,
anticipated timing for closing of the transaction, benefits of the
transaction and growth of the Corporation's Modular Solutions
portfolio.
Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by Horizon North as of the date of such statements, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. The estimates and
assumptions of Horizon North used for this press release may prove
to be incorrect. Forward-looking statements are based on current
expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and in some
instances to differ materially from those anticipated by Horizon
North and described in the forward-looking statements contained in
this press release, including risks relating to the demand for
modular structures. Risk factors that could affect Horizon
North's operations and financial results include failure to
complete the Offer, failure to receive required regulatory
approvals for the Offer and the ability of Horizon North to
successfully implement its strategic initiatives and achieve
expected benefits from the transaction. Additional information on
these and other risks, uncertainties and factors that could affect
Horizon North's operations and financial results are included
in Horizon North's annual information form and other documents
which may be accessed through the SEDAR website at
www.sedar.com.
Although Horizon North believes that the material factors,
expectations and assumptions expressed in such forward-looking
statements are reasonable based on information available to it on
the date such statements were made, no assurances can be given as
to future results, levels of activity and achievements and such
statements are not guarantees of future performance. Horizon
North's actual results may differ materially from those expressed
or implied in forward-looking statements and readers should not
place undue importance or reliance on the forward-looking
statements. Statements including forward-looking statements are
made as of the date they are given and, except as required by
applicable securities laws, Horizon North disclaims any intention
or obligation to publically update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
SOURCE Horizon North Logistics Inc.