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Atlas Engineered Products further expands into Alberta with Truebeam deal

The group said it had bought the operating assets including equipment, inventory, and trademarks of Alberta Truebeam

All trussed up ... Atlas is expanding into northern Alberta

Wood product and roof truss group Atlas Engineered Products Ltd (CVE:AEP) continues to grow, and today announced an expansion into northern Alberta.

The group said it had bought the operating assets including equipment, inventory, and trademarks of Alberta Truebeam Ltd (Truebeam), leased the land and buildings in which Truebeam operates, and hired all the Truebeam employees.

WATCH: Atlas Engineered Products enjoys record Q2 and completes milestone Clinton Roof Truss acquisition

Significantly, the Truebeam operation will contribute strong positive cash flow and an estimated C$2.4mln in profitable revenue during the 2018 calendar year, Atlas said.

Truebeam will supply trusses and engineered wood products to residential development projects in Northern Alberta and Northwest British Columbia, including Fort McMurray and Medicine Hat.

"We are taking advantage of an exciting opportunity to expand our footprint in the Alberta marketplace, said Guy Champagne, the president of Atlas.

"Combined with our aggressive acquisition program, strategic expansion opportunities such as these will allow us to economically and rapidly scale our revenue base and geographic reach.”

Only last month (February), the group inked a binding letter of intent to buy Highwood Trusses Ltd, which is located in High River, Alberta and has annual sales of over C$3.5mln, as well as strong profitability, and very capable operational leadership.

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 C$0.65 per share.

READ: Atlas Engineered Products completes acquisition of Clinton Roof Truss Ltd

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

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

"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.

Atlas shares in Toronto added just over 1% to C$0.46 each.

Quick facts: Atlas Engineered Products Ltd.

Price: 0.41 CAD

Market: TSX-V
Market Cap: $23.67 m

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