Royal Laser Corp. announces that it has completed the previously disclosed acquisition of all of the issued and outstanding shares of Apogee Slitting Inc., a Mississauga, Ontario based steel service centre, effective November 1, 2007, for initial purchase consideration of 6,000,000 common shares in the capital of the Corporation, and cash consideration of $6,000,000.
The Share Consideration is subject to an escrow agreement providing for its release over a period of three years and is subject to a statutory four month hold period expiring on March 1, 2008. The Share Consideration is also subject to a minimum working capital adjustment.
Further consideration for the Acquisition may be paid as follows. On November 1, 2010, should the value of the Share Consideration be less than $1.00 per share, Royal Laser will top up the value to $1.00 per share in the form of either cash or additional common shares in the capital of the Corporation, at Royal Laser's option. Additional purchase consideration of $5,000,000 is payable in the event that Apogee meets certain additional revenue and profit thresholds. This additional purchase consideration is payable in cash or common shares of the Corporation, at Royal Laser's option.
Apogee will be integrated into the operations of Venture Steel Inc., a subsidiary of Royal Laser.
Beric Sykes, President of Venture Steel, comments: "Apogee will immediately bring additional sales in tubular, heavy gauge automotive, building products and general manufacturing markets. Apogee currently processes, on an annualized run rate basis, 40,000 tons - we look forward to consolidating these sales into our current order book. Apogee will no longer run as a separate company, and will benefit immediately from the Venture Steel infrastructure. Going forward, Apogee compliments our current operations by adding increased slitting capabilities (heavier gauges up to 0.5 inches) and increased storage capacity."