WesternOne Inc. (“WesternOne“) (TSX: WEQlaunch) (TSX: WEQ.DBlaunch) announced today it has entered into a binding agreement with Triple M Modular Ltd., an investee company of TriWest Capital Partners, to sell substantially all of WesternOne’s Canadian manufacturing assets and liabilities in order to complete its exit from the modular building business known as Britco Manufacturing (the “Transaction“).
Under the terms of the agreement, WesternOne will receive cash consideration of $2.5 million upon closing, plus or minus customary working capital adjustments and up to an additional $2.5 million contingent on earnings from the business sold for the 12-month period following the close of the Transaction. In conjunction with the Transaction, WesternOne expects to incur a one-time severance obligation of approximately $0.9 million. The Transaction is expected to close on or about May 1, 2017.
Britco Manufacturing provides innovative modular construction solutions, with design-build and turn-key capabilities, for permanent applications such as multi-user buildings, hotels and lodges and offices, and relocatable structures such as office complexes, construction site offices and workforce accommodations.
“The Transaction marks the successful outcome of our strategic review process in respect of Britco, together with the sale of Britco’s modular space rental and US operations announced on March 6, 2017,” said Peter Blake, CEO of WesternOne. “The divestiture of Britco’s assets will enable us to focus on forward strategic execution in growing our construction heat and aerial rental business platform. The related sale proceeds will create financial flexibility through deleveraging the balance sheet, enhancing liquidity for working capital management and deploying growth capital for the heat and aerial businesses.”
“We are excited to partner with management and staff at Britco Manufacturing as they continue to grow their presence in the commercial and permanent modular construction sectors,” said Rick Weste, President of Triple M Modular Ltd.
Most of the staff at the Penticton plant were issued severance packages last Friday.