Newalta Corporation, a leading environmental management and recycling company based in Calgary, Alberta, has announced that it has entered into an agreement to acquire a waste lube oil re-refinery and related collection network from Mohawk Lubricants Ltd.
The purchase price of $9.0 million will consist of $3.0 million in cash and $6 million of 9.5 percet debentures (bonds) convertible into common shares of Newalta on the basis of $4.00 principal amount per share. Half of the principal amount of the convertible debentures will mature on September 1, 2003, with the remaining debentures maturing on September 1, 2004. The acquisition, anticipated to close effective September 1, 2002, is subject to regulatory approval and Newalta’s satisfaction with due diligence findings.
Established in 1979, Mohawk Lubricants Ltd. collects and re-refines waste lube oil into high quality base oils, fuels and asphalt extender, provides petroleum-related waste recycling and reprocessing services and markets a wide range of automotive and industrial lubricants throughout Western Canada and the Pacific Northwest.
The re-refinery and related collection network, which generate annual revenues of approximately $20 million will be integrated into the Newalta facility network and will be accretive to earnings per share in fiscal 2003.
"We look forward to the contribution of Mohawk's talented and experienced people to the continuing success of Newalta as we expand across Canada," Al Cadotte, president and chief executive officer of Newalta says. "This acquisition will enhance the profitability of our western Canadian operations, thereby strengthening Newalta's foundation for long-term growth in eastern Canada.”
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