Stillwater Advises Hi-Tec Industries Ltd. in its Sale to Atlas Engineered Products

March 1, 2022 – Nanaimo, British Columbia / Atlas Engineered Products (“AEP” or the “Company”) (TSX-V: AEP; OTC Markets: APEUF) announced today that the Company has completed the acquisition of Hi-Tec Industries Ltd. (“Hi-Tec”) located in Lantzville, British Columbia.

We are excited to announce the acquisition of Hi-Tec. Hi-Tec is a successful, well-run business and when this acquisition opportunity arose it was too good to pass up. The future synergies with our Atlas Building Systems location and additional customer base for product expansion is exciting and our team is looking forward to this integration moving forward,” said Hadi Abassi, AEPs CEO, President and Founder. “AEP has completed the next step in expanding its footprint in British Columbia where seasonality and the effects of winter are not as impactful as the rest of Canada.

Hi-Tec manufactures roof trusses and sells engineered wood products to a strong, loyal customer base on Vancouver Island in British Columbia. This location is just under 15 minutes north of AEP’s Atlas Building Systems location in Nanaimo, British Columbia which will offer some unique synergies from labour to shipping to equipment and more.

During its last fiscal year ended August 31 2021, Hi-Tec earned unaudited revenues of just over $5.0 million, net income before taxes of just over $1.0 million and a normalized EBITDA(1) of $1.25 million, resulting in a normalized EBITDA margin(1) of 25%.(2) Over the last three years, Hi-Tec earned average unaudited revenues of approximately $4.6 million, net income before taxes of $751,000, normalized EBITDA(1) of $1.16 million, with an average normalized EBITDA margin(1) of 25%. (2)

Under the terms of the share purchase agreement (“SPA”), AEP has acquired all of the issued and outstanding shares of Hi-Tec for a purchase price of $5.8 million in cash, with a working capital adjustment to be determined and finalized within 60 days of closing date of the SPA. In addition, AEP has acquired the land and buildings on which Hi-Tec’s facilities are located for a price of $3.25 million in cash based on a completed independent appraisal. Stillwater Capital acted as the exclusive financial advisor to Hi-Tec for this transaction.

AEP has entered into a term loan for the $5.8 million and a mortgage for 75% of the $3.25 million through the Company’s existing banking relationships, with the remaining portion of the land and building purchase and working capital adjustment will be funded by internally generated cash. The Company opted to fund this acquisition with debt given the current low interest rates and to preserve majority of its cash for future strategic plans and opportunities.

“Marc, Albert, and their team have built a successful business over 45 years. Atlas has gained an exciting opportunity for expansion as they continue to operate in British Columbia. We are delighted to have been a part of bringing these two organizations together,” said Jordan Nix, Executive Vice President at Stillwater Capital.

Stillwater Capital acted as the exclusive financial advisor to Hi-Tec Industries in the transaction. Jordan Nix and Matt Harrison led Stillwater’s deal team.

Read the full press release: Atlas Engineered Products Announces Acquisition of Hi-Tec Industries…

About Atlas Engineered Products Ltd.

AEP is a growth company that is acquiring and operating profitable, well-established operations in Canada’s truss and engineered products industry. We have a well-defined and disciplined acquisition and operating growth strategy enabling us to scale aggressively, giving us a unique opportunity to consolidate a fragmented industry of independent operators.