Hyduke Energy Services Inc. Hyduke is pleased to announce that it has entered into a Share Purchase Agreement the Agreement to purchase the Acquisition all of the issued and outstanding shares of Avalanche Metal Industries Ltd. Avalanche, a private corporation engaged in the business of structural steel manufacturing, including production tanks, steps and ladders for production tanks and other equipment for industries including the oilfield and forestry. Based in Kelowna, B.C Avalanche is a low cost manufacturer of structural steel products ideally located in central B.C. to support Hyduke's expansion into new markets.

The Acquisition is expected to close on April 4, 2017, or such later date which may be agreed, with an outside date of April 30, 2017. The consideration is cash but immaterial, and further particulars of the Acquisition are available in the Corporations Material Change Report filed today. The Acquisition supports Hydukes stated strategy to expand beyond the fabrication and support of drilling and well servicing rigs and related oilfield services equipment to become a diversified designer, fabricator and manufacturer of equipment required for the drilling, completion, production and maintenance of upstream oil, natural gas and natural gas liquids.

Completion of the Acquisition is subject to the fulfillment of certain conditions typical to a transaction of this nature.

Patrick F. Ross, Director and Chief Executive Officer of the Corporation, is also a director and, through his wholly-owned corporation, 1017348 Alberta Ltd.1017348, a shareholder of Avalanche, and therefore, the Acquisition constitutes a Related Party Transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions MI 61-101 insofar as it relates to Mr. Ross only. 1017348 owns 40 Class A Voting Non-Participating and 40 Class C Non-Voting Common Shares of Avalanche.  On closing of the Acquisition, 1017348 will be paid an aggregate of $75,000 for its Avalanche Shares.  Subsequent to closing, the purchase price for the Avalanche Shares may be adjusted upward or downward based on a reconciliation of the net book value of the Avalanche assets.  Based on information currently in the Corporations possession, any upward increase in the purchase price is not anticipated to exceed 10% of the aggregate amount that 1017348 was paid for its Avalanche Shares on closing. There are no other related parties in connection with the Acquisition.

The Corporation is relying on the formal valuation and minority approval exemptions of subsections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Related Party Transaction exceeds 25% of the Corporation's market capitalization. The Acquisition was approved by the independent directors of the Corporation and Mr. Ross did not participate in the discussions or the vote of the board relating to such approval.

 

Source:newswire.ca

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