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Atlas Engineered Products to acquire Highwood Trusses; adds capital markets veteran to board

Highwood is in High River Alberta and has annual sales of over C$3.5mln ...

wood trusses
Atlas Engineered makes and sells wood trusses

Wood product firm Atlas Engineered Products Ltd (CVE:AEP) has continued its rapid acquisition strategy - inking a binding letter of intent to buy Highwood Trusses Ltd.

Highwood is in High River Alberta and has annual sales of over C$3.5mln, as well as strong profitability, and very capable operational leadership, said Atlas.

READ: Atlas Engineered Products to Move Quickly in Consolidating North American Truss Sector

Under the deal, the company will acquire all the issued and outstanding shares of Highwood for C$1.25mln in cash and issue 1.5mln in shares on closing.

As additional consideration, Highwood shareholders, on the first and second anniversary of closing, will receive a further C$250,000 and 385,000 share purchase warrants for $0.65 per share.

That's provided that Highwood achieves underlying earnings (EBITDA) of C$450,000 during the first year, and C$500,000 during the second year.

Atlas will be entitled to carry out due diligence until February 28 this year.

"The acquisition of Highwood is another key step in our acquisition program to significantly broaden our geographic reach," said Guy Champagne, president of Atlas.

"We are extremely pleased to be acquiring Highwood as it is highly accretive and provides us with a strategic base from which to expand in Alberta."

Also in today's statement, Atlas Engineered said it had hired capital markets veteran Kevin Smith as a new director.

WATCH - Atlas Engineered Products building a strong future

Smith is executive vice-president and chief financial officer for the Intracorp Group of Companies, a real estate development company with headquarters in Vancouver and with operations across North America.

He is currently a director of trenching and fibre group Lite Access Technologies Inc (CVE:LTE).

Shares in Atlas eased 1.85% to C$0.53..

Quick facts: Atlas Engineered Products Ltd.

Price: 0.34 CAD

TSX-V:AEP
Market: TSX-V
Market Cap: $19.62 m
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