Cordy to Acquire Tara Oilfield Services
Cordy Oilfield has entered into a letter of intent, which sets forth the basic terms and conditions for its acquisition of Tara Oilfield Services Ltd.
Tara, established in 1997, fabricates oilfield equipment including pressurized vessels, process piping, direct and indirect fire line heaters, high pressure flow lines and flare systems. The fabrication plant is located in Didsbury, Alberta and employs 24 employees. Martin Sheridan, Tara's sole shareholder, will remain as the operational head of Tara following the completion of the acquisition. Mr. Sheridan has been in the business for ten years.
The purchase price for Tara is anticipated to be $2,500,000, made up of $1,125,000 in cash and $1,375,000 by way of issuance of 687,500 common shares of Cordy at the deemed price of $2.00 per share. The purchase price will be subject to adjustment as at August 31, 2007 based on the earnings of Tara for the year then ended and its working capital as at August 31, 2007. The acquisition is anticipated to close on October 31, 2007.
Cordy's Chairman and CEO David Mullen stated "The purchase of Tara is a strong acquisition with significant upside to our manufacturing segment. We are very enthusiastic about the opportunities that Tara presents."
The acquisition of Tara is an arm's length transaction and its completion is subject to the satisfaction of certain conditions precedent, including but not limited to due diligence on behalf of the parties, the acceptance of the TSX Venture Exchange and approval by the Board of Directors.
Cordy Oilfield Services Inc. owns businesses in Alberta and British Columbia in the construction, environmental, manufacturing and pipeline sectors and is focused on implementing strategic and organic growth strategies.