Decisive Dividend Corporation Announces Two Proposed Acquisitions

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(TheNewswire)

May 14, 2018 / TheNewswire / Kelowna, British Columbia: Decisive Dividend Corporation (TSX-V: DE) (“Decisive” or the “Corporation”), a growth-oriented acquisition company, is pleased to announce two proposed acquisitions, the particulars of which are described below.

 

Slimline Manufacturing Ltd.

 

Decisive has agreed to acquire all of the issued and outstanding shares of Slimline Manufacturing Ltd. (“Slimline”), a manufacturing company based in Penticton, British Columbia (the “Slimline Acquisition”).

 

Slimline and predecessor companies have been manufacturing and selling air blast sprayers since 1948.  The air blast sprayers are used primarily in the agricultural industry to apply treatments to crops. Slimline also manufactures and sells wastewater evaporators primarily used in the mining and oil industries. In addition to its two main product lines, Slimline manufactures custom products and sells various sprayer and evaporator parts. Slimline’s sprayers and evaporators utilize common technology including pumps and turbines.

 

The management team of Slimline is led by its founder, Mr. Kim Blagborne, who will remain as President of Slimline following the acquisition until Slimline has been fully integrated into the Decisive group of companies.  

 

The Slimline Acquisition is subject to the terms and conditions of a share purchase agreement (the “Slimline Purchase Agreement”) entered into among Decisive, its newly incorporated wholly-owned subsidiary and the current shareholders (the “Slimline Vendors”) of Slimline.

 

The purchase price for the Slimline Acquisition is $7,000,000, subject to customary adjustments for indebtedness and working capital deficiency or excess relative to target working capital, and an earn-out payment of up to $1,500,000 based upon Slimline’s performance during the twelve (12) month period ended July 31, 2018.

 

$1,000,000 of the base purchase price for the Slimline Acquisition will be satisfied through the issuance of common shares of Decisive based upon the 10-day volume weighted average trading price of such common shares calculated on the trading day prior to the closing date of the Slimline Acquisition (the “Closing 10-Day VWAP”).  The balance of the base purchase price will be satisfied in cash.  Any upward adjustments to the purchase price based upon excess working capital will be satisfied in cash.  One-seventh (1/7th) of the amount of any upward adjustment to the purchase price based upon the earn-out provisions contained in the Slimline Purchase Agreement will be satisfied through the issuance of additional common shares of Decisive based upon the Closing 10-Day VWAP, with the balance paid in cash.

 

The Slimline Purchase Agreement contains negotiated representations, warranties, indemnities and closing conditions.  The closing of the Slimline Acquisition is subject to, among other things, regulatory approval, third party consents and Decisive securing financing.

 

Decisive and the Slimline Vendors have targeted a closing in May of 2018 for the Slimline Acquisition.

 

Decisive has requested a commitment letter from its senior lender and is anticipating approval of debt- financing in the amount of $6,000,000, which will enable Decisive to complete the Slimline Acquisition without raising additional equity. Acceptance of the commitment letter will be subject to approval from Decisive’s Board of Directors.  

  

Hawk Machine Works Ltd.

 

Decisive has agreed to acquire all of the issued and outstanding shares of Hawk Machine Works Ltd. (“Hawk”), a manufacturing company based in Linden, Alberta (the “Hawk Acquisition”).

 

Hawk was founded in 1998 and is positioned in the computer numerical control (CNC) machining/fabrication market as a complete turnkey solution for customized machining products.  Hawk is a supplier for value-add CNC machining specializing in down-hole tools.  Hawk routinely executes purchase orders requiring mass production capability, assembly, and testing of machined products.

 

The management team of Hawk is led by its founder and President, Duane Klassen, who will continue as President following the completion of the Hawk Acquisition until Hawk has been fully integrated into the Decisive group.  

 

The Hawk Acquisition is subject to the terms and conditions of a share purchase agreement (the “Hawk Purchase Agreement”) entered into among Decisive, its newly incorporated wholly-owned subsidiary and the current shareholders (the “Hawk Vendors”) of Hawk.

 

The purchase price for the Hawk Acquisition is $13,500,000, subject to customary adjustments for indebtedness of Hawk on the closing date and any working capital deficiency or excess relative to target working capital.

 

$2,700,000 of the purchase price for the Hawk Acquisition will be satisfied through the issuance of common shares of Decisive based upon the 60-day volume weighted average trading price of such common shares calculated on the trading day prior to the closing date of the Hawk Acquisition.  The balance of the purchase price will be satisfied in cash.  Any upward adjustments to the purchase price based upon excess working capital will be satisfied in cash.

 

The Hawk Purchase Agreement contains negotiated representations, warranties, indemnities and closing conditions.  The closing of the Hawk Acquisition is subject to, among other things, regulatory approval, third party consents and Decisive securing an equity financing.  In addition, the closing of the Hawk Acquisition is subject to certain holders of options to purchase shares of Hawk agreeing to be paid cash in lieu of the exercise of such options.

 

Decisive has received an engagement letter from an investment dealer to conduct a best-efforts offering of common shares of Decisive for proceeds which will to enable it to close the Hawk Acquisition.  Acceptance of the engagement letter terms and conditions is subject to approval from Decisive’s Board of Directors.  

 

Decisive and the Hawk Vendors have targeted a closing date of June 30, 2018 for the Hawk Acquisition.

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James Paterson, Chief Executive Officer of Decisive, said:

“We are extremely excited about the proposed acquisition of Slimline and Hawk.  Each of the acquisitions will grow our customer base, expands product offerings to our existing customers and will diversify our overall business risk profile.”

“Slimline will assist our production capacity at Blaze King, support product lines at Unicast as well as bring a whole new customer base to the Decisive group of companies.  Hawk’s technical expertise and access to customers in the energy industry will help support growth initiatives at both Slimline and Unicast, and Unicast is expected to provide access to new opportunities for Hawk in the cement, aggregate and mining industries.”

“We welcome the executive teams of Slimline and Hawk to the Decisive group and know they will be an important part of our future going forward.”

 

About Decisive Dividend Corporation

 

Decisive Dividend Corporation is an acquisition-oriented company, focusing on the manufacturing sector.  The Corporation uses a disciplined acquisition strategy to identify already profitable, established companies that have strong management teams, generate steady cash flow, operate in non-cyclical markets, and have opportunity for future growth.

 

For additional information regarding Decisive Dividend Corporation and its operating subsidiaries, see its Annual Information Form (AIF) dated April 17, 2018.

 

FOR FURTHER INFORMATION PLEASE CONTACT:

 

Mr. David Redekop, Chief Financial Officer

#201, 1674 Bertram Street

Kelowna, BC V1Y 9G4

Telephone: (250) 870-9146

 

Cautionary Statements

 

Forward-Looking Statements

 

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on management’s current beliefs, assumptions and expectations as to the outcome and timing of such future events.  Actual future results may differ materially. In particular, this press release contains forward-looking information relating to the proposed acquisitions.  Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: the failure to successfully complete the proposed acquisitions and all other risks associated with the businesses carried on by operating subsidiaries of the Corporation.  The Corporation cautions the reader that the above list of risk factors is not exhaustive.  The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

 

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