SERVICE SECTOR / Destiny Resource Services Corp. Acquisition
DESTINY TO ACQUIRE OILFIELD SERVICE COMPANIES
CALGARY, AB--
DESTINY RESOURCE SERVICES CORP. (TSE/ASE "DSC") Destiny Resource
Services Corp. announced today it has entered into an agreement
to purchase all the issued and outstanding shares of the
McConnell Group of Companies, a 25 year old privately held
integrated group of oilfield service companies based in Brooks,
Alberta. Destiny will pay $8.7 million for the acquisition. The
purchase price will consist of a $5.0 million cash payment and
the issuance of 1,175,000 common shares of Destiny at $3.15 per
share. Destiny will also assume debt totaling approximately $3.5
million.
Also, as part of the transaction with Destiny, McConnell has
entered into an agreement to purchase all the issued and
outstanding shares of JC Electric Ltd., a electrical contracting
company, also located in Brooks, Alberta. The purchase price for
JC Electric is $2.4 million. The purchase price, which will be
paid by Destiny, will consist of $1.8 million in cash payable
over two years and the issuance of 200,000 common shares of
Destiny at $3.00 per share.
The McConnell Group and JC Electric generated approximately $30
million (unaudited) in revenue during the past 12 months of
operations.
Adrian Erickson, President and CEO of Destiny stated "The
acquisition of McConnell and JC Electric is another step in
Destiny's growth strategy of adding complementary companies that
diversify our range of services, while enhancing equipment and
personnel utilization with a focus towards natural gas
exploration in strategic geographic regions. The McConnell Group
and JC Electric combination offer complete "one stop" oilfield
services from pipeline contracting to facility construction and
year-round maintenance. Mr. Erickson added, "Our interest in
McConnell is based on the fact that, as a full range service
company, they offer a strong fit with our stated growth strategy.
Because they are located in the gas prone area of South Eastern
Alberta, their peak season tends to be opposite to ours, which
will allow us to get better utilization of equipment and
resources from both Destiny and McConnell. We also intend to
capitalize on McConnell's expertise by exporting the company's
technology to our expanding international operations. Like
ourselves, McConnell has a twenty-five year track record in this
business and a reputation as a premier operator in the oil and
gas industry. We look forward to working together."
The effective date of both acquisitions will be September 1,
1998. These acquisitions are subject to financing.
Destiny Resource Services Corp. is a Calgary based service
company providing integrated services to the oil and gas industry
in Canada, the United States, Central and South America, the
Middle East, Africa and Southeast Asia. |
