Investors: 2005 Press Release Archive
HSE announces intention to acquire industrial safety company based in Sarnia, Ontario
NEWS RELEASE – April 18 , 2005
HSE Integrated Ltd. ("HSE" or the "Company") is pleased to announce that it has entered into a non-binding Letter of Intent ("LOI") to acquire the shares of CRS Technologies (1990) Inc. and Confined Space Response Services Inc. (hereinafter collectively referred to as "CRS"), industrial safety companies headquartered in Sarnia, Ontario. Besides servicing the Sarnia industrial market, CRS has service locations in Windsor, Brockville, Dartmouth, and Detroit, Michigan. The transaction will be the first move of HSE into the United States.
The transaction is conditional upon several conditions precedent including satisfactory due diligence by HSE, the approval of the Board of Directors of HSE, and the approval of the TSX Venture Exchange. It is the
intention of CRS and HSE to close the acquisition as quickly as possible.
The total consideration will be up to $1.5 million. At closing, the shareholder of CRS will receive $1,000,000, comprised of $500,000 in cash and $500,000 in common shares of HSE at deemed price of $1.70 per share, or 294,118 shares. If CRS meets certain business continuity conditions which include the founder and principal shareholder remaining with CRS and/or HSE, another $500,000 in HSE common shares at a deemed price of $1.70 per share or 294,118 shares will be released from escrow on the first, second and third anniversaries of the closing of the transaction.
For the past 15 years, CRS has been an established supplier of industrial safety services in the industrial markets of southern Ontario. CRS provides safety consulting, training, air breathing equipment, air quality monitoring technologies and safety supervision services primary in the area of refinery, petrochemical and processing plant shutdowns. CRS has expanded into other markets such as power generation, mining processing and auto assembly. For the past four years revenues have been stable, averaging $2.7 million per year. CRS has been consistently profitable during this period.
CRS was founded by Paul Tessier who got his start in industrial safety in the upstream petroleum industry in Western Canada in the early 1980s. Tessier has established CRS as a technical leader in this field and has consistently provided high levels of safety professionalism to some of the leading companies in Canada and in the mid-western United States.
CRS and HSE are joining forces because both parties recognize the importance of depth and capacity as clients demand more from their safety services providers. For CRS, HSE will provide access to greater equipment and manpower than ever before. For HSE, CRS will provide an established and credible entry into several new markets and move forward the HSE mandate to diversify into markets that are counter-cyclical to the upstream petroleum wellhead safety services market that currently forms the bulk of HSE's
business.
Of particular importance to both companies is that their businesses are counter-cyclical seasonally. HSE is busier in the winter which will help CRS. CRS is busier in the spring and summer which will help HSE. The objective is to develop a more stable annual revenue stream that will allow both companies to attract and retain the trained and experienced safety professionals that progressive customers are demanding.
CRS's United States location in Detroit is an important first step for HSE in its expansion outside of Canada. HSE has been asked by numerous Canadian clients to work in the US has declined because HSE is not
incorporated outside of Canada nor properly insured. The CRS transaction will ensure the Company is capable of properly supporting CRS and HSE clients in the United States.
David Yager, Chairman and CEO of HSE, had the following comments.
"We've been talking to Paul Tessier for over a year and it is clear that we share the same vision of a national safety services company with the equipment, resources and manpower to be able to service the growing demands of industrial clients for a large, diversified, credible and transparent safety services provider. Paul has done an outstanding job of positioning CRS in several important markets in which HSE can grow. Along the way CRS has also developed an outstanding client base. HSE will be able to deploy safety equipment in these new markets which will increase utilization rates, and create more work for our personnel during the slower second and third calendar quarters. This equipment, combined with HSE's manpower pool, will allow CRS to exploit its many opportunities far more aggressively than it would be able to do on its own."
HSE is an integrated supplier of industrial Health, Safety and Environmental services. From its head office in Calgary, Alberta, its serves its clients from eight field service locations in Alberta and British Columbia. HSE trades on the TSX Venture Exchange under the symbol "HSL".
Forward Looking Statements Statements in this document that may be considered forward-looking are based on management's current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For more information please contact:
David Yager, Chairman & CEO
Telephone: (403) 266-1833
E-Mail:
Tony Hidalgo, Chief Financial Officer
Telephone: (403) 266-1833
E-Mail: