SERVICE SECTOR / McCoy Brothers Acquiusition
MCCOY BROS. INC. ACQUIRES A.V. BRAKE AND SUSPENSION
1998-05-20
EDMONTON, AB
McCoy Bros. Inc. today announced that it has signed a letter of intent to
acquire, subject to routine due diligence, a 51% interest in A.V. Brake and
Suspension Ltd., of Lethbridge, Alberta. The transaction is for cash, the
Company is profitable, it is expected to be accretive to earnings per share
immediately, and the transfer of ownership is expected to be retroactive to
March 1, 1998.
A.V. Brake and Suspension operates a six-bay truck service center in
Lethbridge, where it specializes in brake and suspension systems and also
undertakes tanker trailer maintenance and repairs. It also operates a parts
distribution center in Brooks, Alberta and is currently investigating the
establishment of an additional truck service center in an under serviced city
elsewhere in western Canada.
Kerry Brown, Chairman of McCoy, said the Company welcomes its new partners,
Stuart Fairbanks and Lloyd Fairbanks, the founders of A.V. Brake and
Suspension who continue to hold 49% of the Company. Both have agreed to long
term contracts to remain as managers of the enterprise.
Mr. Brown said that the Lethbridge operation can readily expand its service
activity in spring and other suspension services. Cost efficiencies
associated with McCoy's greater purchasing power are expected to generate
sufficient synergy to increase A.V. Brake's earnings immediately.
McCoy has a profitable history dating back to 1914. The Company's businesses
include truck services and sales, truck parts distribution and the
manufacture and distribution of springs, axles, trailers and oil field
products. It has five facilities in Edmonton, as well as operations in Grande
Prairie, Calgary and Red Deer in Alberta and Rancho Cucamonga, California.
The Company's shares are traded on the Toronto Stock Exchange under the
symbol MCB. |
