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HSE TO ACQUIRE ATLANTIC CANADA’S LARGEST INDUSTRIAL SAFETY
SERVICES COMPANY
March 06 News Release
HSE Integrated Ltd. (“HSE” or the
“Company”) is pleased to announce that it has entered
into a non-binding Letter of Intent (“LOI”) to acquire
the shares of Frontline Safety Ltd. (“Frontline”)
of Halifax, Nova Scotia. Frontline provides industrial safety
services to refineries, petrochemical plants, offshore drilling
and production operations and other industries in the areas of
safety services, breathing air equipment services, air quality
monitoring and related training services.
The total purchase consideration shall be comprised
of $1,000,000 cash, 666,667 treasury shares of HSE and the assumption
of up to $400,000 in long term debt. In addition, there will be
a further cash consideration based on the financial performance
of Frontline for the current fiscal year ended August 31, 2006.
The acquisition of Frontline is conditional
upon several conditions precedent including completion of satisfactory
due diligence, approval of the Board of Directors of HSE and the
approval of the TSX Venture Exchange. It is anticipated the transaction
will close early in the second quarter.
Frontline was founded in 1995 and is owned
by Tom Hickey, P.Eng. Tom has agreed to join HSE in the position
of Vice-President, Corporate Development. After executing an orderly
integration of Frontline into HSE, Tom will work with government
agencies, educational institutions and customers to help expand
the industrial safety workforce. This will assist HSE in meeting
the needs and expectations of its clients in Western Canada where
the rapidly expanding conventional and non-conventional petroleum
industry has placed significant strains on the available workforce.
Frontline has had a history of profitability.
Based on financial statements for the past five fiscal years,
the average normalized EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) has been approximately $787,000.
Normalized EBITDA for the fiscal year ended August 31, 2005 rose
to $1,152,000. Frontline believes that the financial performance
in the current fiscal year will be comparable to fiscal 2005.
It is anticipated that all Frontline’s
staff will remain with HSE and that Frontline and HSE’s
other business in the Halifax area, Confined Space Rescue Services
acquired in July 2005, will be combined. This will permit HSE
to undertake more business in the Atlantic provinces region.
David Yager, Chairman and CEO of HSE, had the
following comments.
“Although HSE has built a presence in
Atlantic Canada since the CRS acquisition last year, the combination
with Frontline really gives our company the immediate critical
mass to meet the growing demands of industry in this region. Frontline
also supports the natural gas production operations offshore Nova
Scotia, giving HSE its first exposure to the offshore petroleum
industry. As is the case with other acquisitions by HSE, Frontline
supplies safety services to the same petroleum industry clients
as HSE, only another aspect of their business such as offshore
production and east coast refining. It’s a great fit. Tom
Hickey has built a very solid company and we believe he’ll
be a valuable asset in continuing to build HSE.”
HSE is an integrated supplier of industrial
Health, Safety and Environmental services. From its head office
in Calgary, Alberta HSE serves its clients from field service
locations in Alberta, British Columbia, Ontario, Nova Scotia and
Michigan. HSE trades on the TSX Venture Exchange under the symbol
“HSL”.
For more information, please contact:
David Yager, Chairman & CEO
Telephone: (403) 266-1833
E-Mail: dyager@hseintegrated.com
James M. Hill, Executive Vice-President
Telephone: (519) 429-0080
E-Mail: jhill@hseintegrated.com
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
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