Increases annual run rate total revenue and EBITDA to over $140 million and $16 million1
Transaction highlights include:
- Increases annual run rate total revenue and EBITDA to over $140 million and $16 million1
- Accretive to EBITDA and earnings
- Cash consideration funded with cash on hand and existing credit facilities, no equity financing required
- Increases Titanium’s fleet size by over 30%, to a total of over 450 power units and over 1,200 trailers
- Expands geographic coverage of Titanium’s network of Truckload flatbed services in Northern Ontario with new terminals in North Bay and Sudbury
- Provides entry into the Truckload van shipping market in Northern Ontario
- Builds a significant growth platform in Northern Ontario with the addition of ProNorth’s facilities to Titanium’s existing terminal in Bracebridge acquired with Muskoka Transport
Opportunities for synergies:
- ProNorth is a profitable business, Titanium expects to increase margins to levels consistent with its existing Truck Transportation division
- Cross-selling of existing flatbed customers and new van shipping customers
- Increasing operational efficiencies using Titanium’s technology platform and lower cost suppliers
- Mississauga terminal proximity to Titanium’s current Woodbridge terminal and new Caledon terminal currently under construction
- Optimization of fleet performance
Mr. Ted Daniel, CEO of Titanium commented, “Titanium has completed eight acquisitions since 2011 and has a strong track record of integrating acquired companies and increasing margins. This acquisition is highly accretive to Titanium’s shareholders and offers an attractive combination of synergies and growth opportunities. We welcome the ProNorth team to Titanium.”
Under the terms of a definitive purchase agreement dated December 1, 2015, Titanium has acquired all of the stock of ProNorth for total cash consideration of $5.8 million and 1,750,000 common shares. The shares of Titanium to be issued in connection with the transaction are to be released from various holds over a two-year period under applicable securities laws and stock exchange rules.
Titanium has also purchased certain real estate used in the operation of ProNorth for the aggregate purchase price of $2.5 million. The purchase of the real estate was funded using $250,000 of cash on hand and a $2.25 million nine year interest-free vendor-take back financing agreement.
Titanium is a leading asset-based transportation and logistics company servicing Canada and the United States, with approximately 450 power units, 1,200 trailers and 550 employees and independent owner operators. Titanium provides truckload, dedicated, and cross-border trucking services, freight logistics, and warehousing and distribution to over 1000 customers. Titanium is a recognized consolidator of asset-based transportation companies in Ontario, having completed eight asset-based trucking acquisitions since 2011. Titanium has also been ranked by PROFIT magazine as one of Canada’s Fastest Growing Companies for seven consecutive years.
NON-IFRS FINANCIAL MEASURES
The following financial measures do not have any standardized meaning under IFRS and may not be comparable to similar measures employed by other companies:
“Earnings before interest, income taxes, depreciation and amortization” or “EBITDA” is calculated as net income before depreciation, amortization, asset impairments, gains or losses on the sale of equipment, finance income and costs, gains or losses on foreign exchange, income tax expense and reverse takeover costs.
Management of the Company believes that these financial measures are useful for investors and other readers when used in conjunction with other IFRS financial measures. However, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of financial performance prepared in accordance with IFRS.
1. Run rate figures are based on historical figures adjusted for the acquisition of ProNorth including expected synergies.
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding Titanium’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to Titanium’s future outlook and anticipated events, and may include statements regarding the terms and completion of Titanium’s acquisition of Pro North (the “Acquisition”) and the synergies and benefits expected from the Acquisition, as well as the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Titanium. Particularly, statements regarding performance, achievements, prospects or opportunities for Titanium or the industry in which it operates are forward-looking statements. In some cases, forward-looking information can be identified by terms such as “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “project”, “predict”, “forecast”, “potential”, “continue”, “likely”, “schedule”, or the negative thereof or other similar expressions concerning matters that are not historical facts.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, Titanium undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.