Capital Reserve Canada has entered into a Letter of Intent for the purchase of all of the shares and assets of United Fabrication & Welding Ltd.
The Company's main assets include a modern, and well equipped Canadian Welding Bureau (CWB) approved facility with 2 buildings containing a total of 17,000 sq. feet of space, a 25 acre site with storage, tank refurbishing up to 1,000 bbl. United also has a 12 x 80 ft. paint shop that can handle projects up to 10 tons in size. Its location in Two Hills, Alberta with 15 skilled employees positions the Company for low-cost, and high quality metal fabrication work for clients in the oil and gas industry, including the major Alberta Oil Sands projects.
This has allowed United to grow its client base and sales. In the past fiscal year, it earned $689,000 on $2.5 million in gross revenue. Upon completion of the transaction United will sign a sales and distribution contract with Behral Canada a wholly owned subsidiary of CRC. In addition United will assist Behral in Fabrication and Manufacturing of its "SBOP" line of Blowout Preventers.
Contemplated terms of the LOI are set forth below:
The owner of United, Henry Neufeld, will remain the President in charge of this division. Says Neufeld, "I am pleased to join Don Getty and his team at Capital Reserve in building a regional powerhouse servicing the oil and gas sector. I believe that United’s cost-structure within Capital Reserve will provide it with a foundation for future success in providing welding and fabrication services to the oil and gas industry."
States, Steve Claussen, CEO and President of CRC, "The acquisition is a strong strategic fit, allowing CRC to enhance its position in the oil and gas service industry, and quickly accelerate revenue growth."
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