CALGARY, ALBERTA--(January 16, 2017)
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.
Strad Energy Services Ltd. ("Strad") (TSX:SDY) announced today that it has entered into an agreement to sell 5,952,381 class A shares ("Common Shares") on a bought deal basis at a price of $1.68 per Common Share to a syndicate of underwriters (the "Underwriters"), led by Raymond James Ltd. and including Paradigm Capital Inc., Peters & Co. Limited, HSBC Securities (Canada) Inc. and Industrial Alliance Securities Inc. for gross proceeds of $10.0 million (the "Offering"). In addition, Strad has granted the Underwriters an over-allotment option, exercisable for a period of 30 days following closing of the Offering, to purchase up to an additional 892,857 Common Shares at a price of $1.68 per Common Share to cover over-allotments (the "Over-Allotment Option"). Total gross aggregate proceeds will be approximately $11.5 million if the Over-Allotment Option is exercised in full.
The Offering will be completed by way of short form prospectus in all provinces of Canada other than Quebec, and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"). The Offering is subject to customary conditions including receipt of applicable regulatory and stock exchange approvals and is expected to close on or about February 7, 2017.
The net proceeds of the Offering (including the net proceeds from the exercise of the Over-Allotment Option, if any) will initially be used by the Company to reduce outstanding bank indebtedness, thereby freeing up borrowing capacity that may be redrawn as required to fund the Corporation's ongoing capital expenditure program, potential acquisitions that may be identified from time to time and for general working capital and corporate purposes.
The securities to be offered have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States absent registration or absent an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, nor shall there be any offer or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Strad is a North American energy services company that provides rental equipment and matting solutions to the oil and gas and energy infrastructure sectors. Strad focuses on providing complete customer solutions in Canada and the United States.
FOR FURTHER INFORMATION PLEASE CONTACT:
For investor inquiries please contact:
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release contains forward-looking statements within the meaning of applicable securities laws. In particular, this news release contains forward-looking statements with respect to the timing and completion of the proposed Offering and the anticipated use of proceeds from the Offering. Although Strad believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on them because Strad can give no assurance that such expectations will prove to be correct. Assumptions have been made with respect to, among other things, general economic and market conditions. Factors that could cause actual results to differ materially from those set forward in the forward looking statements include, among other things, general economic and market conditions, industry conditions, market and commodity price volatility and Strad's financial and operational performance and results. Additional information on these and other factors that could affect Strad’s operations and financial performance are included in Strad’s annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Strad’s website (www.stradenergy.com). Strad disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.