Feb 8 2011
Strongco Corporation (TSX:SQP) today announced that it intends to acquire 100% of the shares of Chadwick-BaRoss, Inc. for approximately US$11.5 million.
Chadwick-BaRoss is a heavy equipment dealer headquartered in Westbrook, Maine, with three branches in Maine and one in each of New Hampshire and Massachusetts. The transaction is expected to close February 17, 2011, subject to finalizing and executing a purchase and sale agreement, completing due diligence investigations and obtaining certain third party approvals.
"The acquisition is in line with our strategy of building scale, in part by acquiring dealerships closely associated with the major brands represented by Strongco and located in regions that are geographically contiguous with our current markets," said Robert Dryburgh, President and Chief Executive Officer of Strongco.
Chadwick-BaRoss has been in business in New England for more than 80 years and is a highly regarded Volvo Construction Equipment dealer in Maine and New Hampshire. Strongco operating teams in Quebec and the Atlantic provinces have benefited from a working relationship with Chadwick-BaRoss for several years.
In addition to Volvo products, Chadwick-BaRoss carries a number of complementary brands, including Ponsse and Powerscreen. Through its branch in Chelmsford, Massachusetts, Chadwick-BaRoss also represents other well respected brands such as Takeuchi, Link-Belt and Kawasaki.
The transaction value of approximately US$11.5 million (C$11.4 million) is based on the book value of Chadwick-BaRoss. In connection with the transaction, Strongco has obtained a $5.0 million term loan through its current bank.
"I am particularly pleased that Stuart Welch, who has led Chadwick-BaRoss for several years as President and Chief Executive Officer, has agreed to stay on to lead this business when it becomes part of Strongco," added Mr. Dryburgh. "In particular, he successfully guided the company through the recent recession in the U.S. and I am confident that he and his team are poised to take advantage of the anticipated recovery in heavy equipment markets."
"Given the signs of recovery in the U.S. and current exchange rates, the timing of this acquisition is opportune and enables Strongco to continue to build on our relationship with Volvo and also to establish a platform for future growth," he concluded.
Source: http://www.strongco.com/