Western Energy Services Corp. (“Western”) (TSX.V) announces that it has entered into (through its wholly owned subsidiary Horizon Drilling Inc.) a definitive arrangement agreement with Impact Drilling Ltd. (“Impact”), whereby Western will acquire all of the outstanding securities of Impact. The total transaction value of the Arrangement is approximately $19.4 million (including the acquisition of outstanding securities, assumption of debt, working capital and transaction costs). The transaction will be funded entirely using Western’s available lines of credit and within its stated objective of maintaining a conservative debt to annualized EBITDA ratio.
The transaction will be effected by means of a court approved plan of arrangement in accordance with the Business Corporations Act (Alberta) (the “Arrangement”). The Arrangement is subject to the approval by the securityholders of Impact, as well as court and regulatory approvals.
Impact is an arm’s length, private oil and gas well drilling company. The Board of Directors of Impact has retained Raymond James Ltd. to provide a fairness opinion with respect to the Arrangement.
The Impact assets consist of the following:
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