TORONTO, Nov. 28 /PRNewswire-FirstCall/ -- Semcan Inc. (TSX VENTURE:STT) (the "Company") announces it has entered into a Letter of Intent to sell its Distribution and Product Development subsidiary, Nucleus Distribution Inc. ("Nucleus").
The terms of the Letter of Intent provide for the sale of all of the Company's interest in Nucleus for total proceeds of $6,500,000, comprised of cash and assumption of existing debt, subject to agreement by Nucleus' current lenders. The parties have agreed to work toward the completion of a formal Agreement of Purchase and Sale by January 31, 2009 and a closing on or before March 31, 2009.
The purchase price of $6,500,000 represents an approximate multiple of 5.0 times EBITDA based on the estimated EBITDA of Nucleus for fiscal year 2008.
Commenting on the transaction, Philip Jamieson, the Company's Chairman & CEO said, "While Nucleus has been a solid business for us to date, the divestiture will allow the Company to reduce debt and focus on its core Environmental Engineering business."
The transaction is subject to Exchange approval. About Semcan Inc.
Semcan is a worldwide supplier of industrial processes and environmental solutions with specific emphasis on water remediation and emission control systems. Semcan provides the central finance and administrative functions, allowing operational management to remain focused on bottom line profitability thereby increasing shareholder value.
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including the risks associated with operations and sales and risks associated with margins, suppliers and customers and risks associated with foreign exchange fluctuations, among others. These forward-looking statements represent Semcan's judgment as of the date of this press release. Semcan disclaims any intent or obligation to update these forward-looking statements.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release.
