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WesternOne Inc. Sells Britco's Rental and US Manufacturing Businesses for $45.1 Million, Amends Credit Facility and Announces Timing of Release of Annual 2016 Financial Results and Conference Call

VANCOUVER, BC--(Marketwired - March 06, 2017) - WesternOne Inc. ("WesternOne") (WEQ.TO) (TSX:WEQ.DB) announced today the sale of a significant portion of the assets of its subsidiary Britco LP ("Britco"), including its modular space rental business ("Britco Rentals") and its majority equity interest in Britco's modular building manufacturing operations in the United States ("Britco USA"), for total cash consideration of approximately $45.1 million (collectively, the "Transactions"). The Transactions closed today concurrent with the signing of definitive agreements.

The assets of Britco Rentals were sold to a subsidiary of Black Diamond Group Limited for cash consideration of approximately $41.0 million, with the final proceeds remaining subject to customary post-closing working capital adjustments. Britco Rentals operates one of the largest modular space rental fleets in British Columbia, consisting of office complexes, construction site offices, diverse special use buildings and storage containers.

The units of Britco USA, which represent a 64.55% equity interest, were sold to a group of investors led by Britco USA's management team for cash consideration of approximately $4.1 million. Britco USA provides temporary and permanent residential and commercial modular buildings and offers design-build capabilities as well as turn-key construction management services for customers in the infrastructure, construction, energy and resource sectors within the southern United States.

WesternOne is evaluating strategic options for Britco's Canadian manufacturing operations, which provide innovative modular construction solutions, with design-build and turn-key capabilities, for permanent applications such as multi-user buildings, hotels and lodges, and offices, and relocatable structures such as office complexes, construction site offices and workforce accommodations. These operations continue to be negatively impacted by the recent downturn in western Canadian markets.

"The Transactions allow WesternOne to be strategically focused on operating and growing its WesternOne Infrastructure Services (WIS) division which offers high quality aerial and construction heat services to key markets in Western Canada," said Peter Blake, CEO of WesternOne. "The proceeds from the Transactions will provide additional financial flexibility for WesternOne with respect to debt reduction, working capital management and capital investments for the WIS division."

Raymond James Ltd. acted as financial advisor to WesternOne in connection with the Transactions.

WesternOne also announced today that it entered into an amended and restated credit facility with its senior lender (the "Amended and Restated Credit Facility Agreement").

The Amended and Restated Credit Facility Agreement included, among other things:

  • Change from a term facility to a demand facility.
  • Elimination of compliance relating to the ratio of Total Net Debt to EBITDA (as defined in the Amended and Restated Credit Facility Agreement).
  • Waiver of compliance relating to the Fixed Charge Coverage Ratio (as defined in the Amended and Restated Credit Facility Agreement) through to the fiscal quarter ended June 30, 2018, and then 1.00:1.0 from July 1, 2018 until and including the December 31, 2018 fiscal quarter end, and 1.15:1.0 thereafter.
  • Adjustment of the ratio of Senior Debt to EBITDA to 4.00:1.0 through to the fiscal quarter ended December 31, 2017, 3.50:1.0 from January 1, 2018 until and including the June 30, 2018 fiscal quarter, and 3.00:1.0 thereafter.
  • Inclusion of the Current Ratio (as defined in the Amended and Restated Credit Facility Agreement) of 1.30:1.0 from January 1, 2017.
  • Reduction of the revolving operating line from $15 million to $10 million.
  • Reduction of the revolving capital expenditure facility from $40 million to $10 million and a restriction on additional advances under the capital expenditure facility until the Fixed Charge Coverage Ratio is at least 1.00:1.0 both on a trailing four quarters basis and as projected at each quarter for the next four quarters.

Additional information respecting the Amended and Restated Credit Facility Agreement will be available on SEDAR at www.sedar.com

WesternOne also announced today the scheduling of its Q4 and Annual 2016 Financial Results Conference Call. Peter Blake, CEO and the management team will host a conference call at 11:00am (Eastern time) or 8:00am (Pacific time), on Friday, March 31, 2017, to review the financial results and corporate developments for the year ended December 31, 2016.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.

Toll Free ......................................................... 1-888-390-0546
International or Local Toronto ....................... 1-416-764-8688

If you cannot participate on March 31, 2017, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until April 17, 2017. Please enter the Replay ID number 515879 followed by the # key.

Replay Dial in:

Toll Free ......................................................... 1-888-390-0541
International or Local Toronto ........................ 1-416-764-8677

Forward-Looking Information

Certain statements in this news release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the determination of post-closing working capital adjustments arising from the sale of Britco Rentals, Britco's potential sale of its Canadian manufacturing operations and the intended use of the proceeds from the Transactions. Actual events or results may differ materially.

Forward-looking information contained in this news release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the impact of the current economic climate in Western Canada and the United States on WesternOne's operations will remain consistent with WesternOne's current expectations, and the supply and demand for WesternOne's products and services and the related impact on the pricing on such products and services will remain consistent with WesternOne's current expectations and management's assessment of future plans and operations. Although the forward-looking information contained in this news release is based upon what WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 30, 2016 and Management's Discussion & Analysis dated November 11, 2016, which are both available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this news release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate value for its shareholders.

Additional Information

Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

Trading Symbols:

Toronto Stock Exchange: WEQ and WEQ.DB

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.