SERVICE SECTOR / Dakota Resources to Close Seismic Acquisition;
Second Acquisition Targeted; Financing Increased
ASE SYMBOL: DAK
JANUARY 22, 1998
CALGARY, ALBERTA--Further to its last press release on November
20, 1997, DAKOTA RESOURCES LTD. is pleased to announce that it has
advanced to a formal purchase agreement to acquire 100 percent of
FASTWAY EXPLORATION LTD., a 12 year old seismic company based in
Calgary. As previously disclosed, this acquisition will
immediately provide Dakota with definitive cash flows, assets and
profitability. Fastway's revenue and income for the first 4
months of this fiscal year is ahead of last year's performance by
a considerable margin, and ahead of expectations. It should be
noted that the acquisition is based on a share purchase, meaning
that all of this performance is credited to Dakota upon closing.
Consideration for the transaction has been changed to a purchase
price of $800,000 cash rather than for the cash and shares as
previously reported. The closing date remains unchanged at
January 30, 1998. Dakota is currently in advanced discussions
with a major Canadian bank regarding capital debt (and operational
credit facilities) for the partial funding of this transaction.
This reflects the strength of the deal and assists the future
growth of the company increasing the amount of available working
capital and establishing a long-term banking relationship.
Dakota has also changed the private placement to $1,000,000 by way
of units at $0.25 per share. Each unit will entitle the purchaser
to one common share and one share purchase warrant exerciseable at
$0.40 and expiring June 30, 1998. This is a change from the $0.30
share purchase warrant expiring 18 months from subscription as
previously reported. Management feels that a shorter expiry
enhances the salability of the issue to private and institutional
investors. Additionally, the company has identified additional
take-over targets that justify the increase in the size of the
private placement. Dakota has received conditional approval from
the Alberta Stock Exchange for this placement.
Further to this, Dakota is also pleased to announce that it has
entered into a letter of intent, as of January 20, 1998, to
acquire 100 percent of the issued and outstanding shares of 742308
Alberta Limited (operating as GL Fabrications). The company is an
oilfield fabrication company specializing in atmospheric tanks,
pressure vessels and related oilfield equipment. The company has
been in operation for six months and has a current order book
exceeding $500,000, assets of $300,000 and is expected to have
sales for this fiscal year exceeding $6,000,000.
Consideration for the transaction is for 1,000,000 shares released
at one-third intervals over three years on an earn-out basis at a
ratio of one share released for every $1.00 in earnings before
interest, taxes, depreciation and amortization (EBITDA). Dakota
is undergoing an additional period of due diligence and if
satisfied expects to close the acquisition on March 1, 1998.
The company is returning to its roots in the oil and gas sector,
specifically in service. It has completed a comprehensive
business plan and views these two acquisitions as an excellent
start to its refocus. The company has added a website and email
address which are www.telusplanet.com/public/dakotar and
Dakota_Resources@telusplanet.net. |
