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Atlas Engineered Products Enters Into Definitive Agreement to Acquire Tandelle-Pacer and Announces Non-Brokered Private Placement Financing for Up to $5 Million

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VANCOUVER, British Columbia, Aug. 14, 2018 (GLOBE NEWSWIRE) --

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

ATLAS ENGINEERED PRODUCTS LTD. ("Atlas" or the "Company") (TSX-V: AEP), a leading supplier of trusses, engineered wood products and building components, is pleased to announce that it has entered into a definitive agreement to purchase all of the issued and outstanding shares of Tandelle Specialty Inc. and Pacer Building Components Inc. (Tandelle-Pacer) of Ilderton, Ontario.

Tandelle-Pacer's revenues for the fiscal year ended October 31, 2017 were approximately $14.4 million with adjusted EBITDA of $1.9 million. To acquire Tandelle-Pacer, Atlas has agreed to pay $8.6 million on closing, based on Tandelle-Pacer having a targeted net working capital of $2,280,938 on closing.  Subject to adjustments based on Tandelle-Pacer's actual net working capital at closing, the purchase price is expected to consist of $500,000 in Atlas common shares, and $8.1 million in cash. Closing of the acquisition, which is expected to occur on or before October 31, 2018, is subject to standard closing conditions, including the satisfactory completion of Atlas' due diligence investigations and remains subject to the approval of the TSX Venture Exchange.   

On closing, Tandelle-Pacer's CEO and President Dave Howard will be invited to join the Board of Directors of Atlas.

Mr. Guy Champagne, President of Atlas stated, "The Tandelle-Pacer acquisition is expected to be a key transaction for Atlas that gives us a huge strategic advantage in a market in which we are already invested. We will be acquiring an established truss, engineered beam and wall and floor panel business with room to expand operations with ease, a very experienced management team to look after our other sites in Ontario, a large solid and growing customer base in the Greater Toronto area, and entry into the Detroit, Buffalo and Rochester markets."

Non-Brokered Private Placement Financing

Atlas is also pleased to announce a private placement financing to raise up to $5 million (the "Offering").  The Offering will be non-brokered and consist of up to 12,500,000 shares at a price of $0.40 per share.

The net proceeds of the Offering will be used for acquisition purposes, general working capital and partially applied to the acquisition of Tandelle-Pacer.

Closing of the Offering is subject to receipt of all necessary approvals, including the approval of the TSX Venture Exchange and definitive subscriptions. All shares issued under the private placement will be subject to a four-month hold period from the closing date, in accordance with applicable Canadian securities laws.

This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including the United States of America.  The securities being offered as part of the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and any applicable state securities laws, or pursuant to available exemptions therefrom.

Please follow the attached link to view Guy Champagne's interview with Proactive Investors:

https://www.youtube.com/watch?v=rFrqcxPliSg&feature=youtu.be

About Tandelle-Pacer

Established in 1998, Tandelle-Pacer is an industry leader in engineered wood components. Tandelle-Pacer specializes in the design and pre-fabrication of engineered floor joists, floor panels, wall panels and roof trusses. Tandelle-Pacer operates from an 80,000 square foot manufacturing facility on 24 acres of land located in the village of Ilderton, just north of London, Ontario.

About Atlas Engineered Products Ltd.

Atlas Engineered Products Ltd. is a leading supplier of trusses and engineered wood products. Atlas was formed over 18 years ago and operates manufacturing and distribution facilities in British Columbia, Ontario and Alberta to meet the needs of residential and commercial builders. Atlas has expert design and engineering teams, multiple-shift state-of-the-art truss manufacturing operations, and large inventories of engineered beam and flooring components. Atlas aims to grow its base of business across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas will bring its construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying them with the full array of components and assemblies they might require for their projects – from design to lockup.

For further information please contact:
Atlas Engineered Products Ltd.
Guy Champagne, President
Phone: 1-250-754-1400
Email: info@atlasep.ca
2005 Boxwood Rd.
Nanaimo, BC V9S 5X9
www.atlasengineeredproducts.com

For investor relations please contact:
Rob Gamley
Phone: 1-604-689-7422
Email: rob@contactfinancial.com
Contact Financial Corp.
810 – 609 Granville St.
Vancouver, BC V7Y 1G5

Readers are cautioned that the financial results of Tandelle-Pacer for the year ended October 31, 2017 were prepared by management, and have not been audited or reviewed by an independent auditor. 

EBITDA and adjusted EBITA are measures not recognized under IFRS. However, Atlas' management believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. EBITDA is defined as earnings before interest income, interest expense, taxes, depreciation and amortization. Adjusted EBITDA is calculated as net income less total interest expense, income taxes, depreciation and amortization and non-cash charges for share based compensation.  Management believes EBITDA and adjusted EBITDA are useful measures that facilitate period to-period operating comparisons

EBITDA and adjusted EBITDA do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.  Readers are cautioned that EBITDA and adjusted EBITDA are not alternatives to measures determined in accordance with IFRS and should not, on their own, be construed as indicators of performance, cash flow or profitability.

Forward Looking Information

Information set forth in this news release contains forward-looking statements. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control.  Such factors include, among other things: risks and uncertainties relating to the Company including those to be described in the Filing Statement filed by the Company on www.sedar.com.  Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information. Closing of the acquisition of Tandelle-Pacer and the Offering remains subject to a number of conditions, including, but not limited to, TSX Venture Exchange acceptance.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) HAS PASSED UPON THE MERITS OF THE PROPOSED TRANSACTION OR THE OFFERING AND HAS NEITHER APPROVED NOR DISAPPROVED OF THE CONTENTS OF THIS NEWS RELEASE NOR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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