CALGARY, ALBERTA — (Marketwired) — 03/16/15 — CriticalControl Solutions Corp. (“CriticalControl” or the “Corporation”) (TSX: CCZ) announced that it has entered into a definitive asset purchase agreement to sell the component of its non-energy business consisting of reselling imaging equipment, preventative maintenance contracts and third party document imaging software (the “Equipment Business”) for gross proceeds of $1.7 million. Under the terms of the sale, all accounts receivable, liabilities and other working capital associated with the business prior to the sale will be retained by CriticalControl. The sale is expected to close on or about March 27, 2015.
“This second divestiture provides management with additional flexibility to focus the Corporation–s resources in our core energy services business where our key intellectual property resides,” said Alykhan Mamdani, President and CEO of CriticalControl. “Management anticipates to use the proceeds from this disposition to bring our strategic initiatives to market and expand geographically in the United States as opportunities arise.”
In a press release dated March 2, 2015, CriticalControl announced that it is reviewing strategic alternatives with respect to its non-energy services business, which comprised 33% of the Corporation–s revenue in 2013. This business segment consists of three components: The Equipment Business; Eastern Canada Conversion (consisting of document imaging and data entry services in Quebec, Ontario and Winnipeg), which was divested pursuant to a press release dated March 12, 2015 for $1 Million; and Western Canada Conversion (consisting of document imaging, data entry and business process outsourcing services in Alberta).
The Equipment Business represents approximately 31% of the Corporation–s revenue from its non-energy services business in 2013 (10% of total revenue in 2013). CriticalControl continues to investigate strategic alternatives related to the Western Canada Conversion business and expects to conclude its process by the end of May 2015.
Forward Looking Statements
There are a number of customary conditions which need to be addressed prior to the consummation of the sale of the Equipment Business. Some of these conditions are outside the control of the Corporation. Although the transaction is anticipated to close on or about March 27, 2015, a delay in meeting these conditions could delay closing or could, under certain circumstances, cause the transaction not to close.
Although the Corporation is evaluating strategic alternatives for its Western Canada Conversion business, there is no assurance that the process will result in a divestiture of any portion of the remaining business. Notwithstanding expectations of the review being completed by the end of May 2015, once further information is obtained, the Corporation may choose to terminate the process early or extend the process where appropriate.
Proceeds from the divestiture together with freed up working capital is expected to be used in strategic initiatives and geographic expansion. Expectations are subject to change as management monitors the progress of its strategic initiatives. There can be no assurance that geographic expansion opportunities will arise to invest the proceeds from this divestiture.
About CriticalControl
CriticalControl provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.
Contacts:
CriticalControl Solutions Corp.
Alykhan Mamdani
President & CEO
(403) 705-7500
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