Trimac signs new UFA deal, invests in mine service fleet
Feb 13, 2012 4:11 PM
Trimac Transportation Ltd has been awarded a five-year contract to transport gasoline and diesel products for UFA Co-operative Limited. The tank truck carrier also announced an investment in a Canadian fleet that served the uranium mining industry.
The value of the UFA contract is estimated to be approximately $19 million annually and $95 million over the five-year term. The UFA contract, which commences on May 1, includes existing and incremental business in Northern and Central Alberta from one of Canada's largest co-operatives.
"We are very pleased with our expanded business partnership with UFA,” says Ed Malysa, Trimac president and chief operating officer in Canada. "Trimac has an excellent relationship with UFA that spans nearly a decade. We share a common set of goals and values and are committed to providing value to UFA and its customers."
With annual revenues of more than $2.1 billion dollars, UFA serves its members through a diversified portfolio of businesses that include Petroleum Products and Services, Farm and Ranch Supply Stores and Wholesale Sports Outdoor Outfitters.
On the uranium mining side, Trimac has agreed to acquire a 29% interest in Northern Resource Trucking Limited Partnership (NRT) for a purchase price of $9,000,000. The transaction will be a cash and share deal with $1,000,000 of the purchase price being satisfied in cash and $8,000,000 of the purchase price being satisfied by the issuance of Class A Common Shares of Trimac, subject to the approval of the Toronto Stock Exchange.
The issue price per Class A Common Share will be equal to the 10-day volume weighted average closing price of the Class A Common Shares on the TSX for the 10 trading days immediately prior to closing. Based on the closing market price of the Class A Common Shares on the TSX on Friday, February 3, 2012 of $4.30, it is estimated that approximately 1,860,465 Class A Common Shares will be issued, representing approximately 7.3% of the total number of voting shares of Trimac currently outstanding on a non-diluted basis. It is expected that the transaction will close on or about March 19, 2012.
NRT provides trucking services primarily to the uranium mining industry in Northern Saskatchewan. NRT has also been a valuable and reliable business partner for Trimac over the years providing overflow subcontractor support to Trimac's key customers in a variety of product lines. NRT has approximately 80 tractors, 140 trailers, and 150 employees and owner-operators. NRT is based out of Saskatoon SK.
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