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Our roundup of Canadian small-caps making news and on the move today. This post will be updated throughout the morning.
TORC Oil & Gas Ltd. announced a deal to acquire light oil assets in southeast Saskatchewan for a total consideration of about $128-million in stock. The assets, which are 94 per cent weighted to light oil and liquids, will improve the company's average decline rate and drilling inventory. "The acquisition complements our conventional light oil platform and provides a strong and stable cash flow base further strengthening the sustainability of our business model while the high quality drilling inventory will enhance our capital program for years to come," said Brett Herman, TORC's CEO.
The company has identified 50 drilling locations on the acquired assets, "which will provide some of the highest relative economic returns in the Western Canadian Sedimentary Basin in all commodity price environments." The new drilling won't increase the company's 2015 capital budget, which TORC said remains at $125-million.
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Centerra Gold Inc. said it will partner with Premier Gold Mines Ltd. to develop Premier's property along the Trans-Canada Highway, including the flagship Hardrock gold mine in northern Ontario. "The property has a large land package with exceptional exploration potential," said Ian Atkinson, CEO of Centerra. "Forming this partnership gives Centerra's shareholders exposure to a significant gold resource and an advanced stage development project." The agreement is for a 50/50 partnership for joint ownership and development of the assets.
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Information Services Corp. said a recently announced acquisition is on hold pending a request from the federal Competition Bureau. In December, the company announced the $10-million purchase of econveyance, a property transaction services firm. "In connection with this transaction, the Company has received a Request for Information from the Competition Bureau," the company said. "In light of this process, the closing of the transaction has not yet occurred."
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Heroux-Devtek Inc. announced its fiscal third-quarter results, which came in below analysts' profit expectations. Revenue surprised to the upside for the quarter ending Dec. 31, but adjusted net income per share of $0.120 fell short of the average forecast of $0.136, according to Bloomberg.
"As anticipated, existing operations benefitted from higher sales to the commercial aerospace market, while military sales remained affected by lower customer requirements in the United States," said Gilles Labbe, CEO of Heroux-Devtek. The company said it expects favourable conditions to continue in the commercial aerospace market, while military aerospace should remain challenging. The long-term revenue goal of $500-million by fiscal 2019 remains intact, "based on existing contracts and assuming no other acquisitions."
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Resolute Forest Products Ltd. finished its fiscal year with a big earnings beat, bouncing back from a difficult first quarter as a result of cold weather. Excluding special items, like the cost of mill closures, Resolute generated $0.38 in earnings per share in the first quarter, well ahead of the average analyst forecast of $0.21, according to Bloomberg.
Amid falling demand for newsprint, the company was aggressive in cutting capacity. In December, the Resolute announced the permanent closure of its newsprint mill in Iroquois Falls, Ont. "Although our recent closure announcements have been difficult – half a million tons of newsprint capacity and 200,000 tons of specialty papers capacity – they immediately improve Resolute's competitive position," said Richard Garneau, the company's CEO.
He said he's expecting sustained demand in lumber products and resilience in the global pulp market. "But newsprint continues to adjust to an accelerating pace of structural decline and currency-driven weakness in export markets," he said.
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The Intertain Group Ltd. announced a deal to acquire a U.K. online bingo business for more than $800-million, at current exchange rates. The agreement with Gamesys Ltd. consists of cash and share payments, plus future consideration based on earnings.
Gamesys is the is the owner of a number of gaming sites including Jackpotjoy, which has a leading market position in the U.K. Management said it believes the deal will make Intertain the "largest provider of online, bingo-led gaming."
For the 12 months ending Sept. 2014, Jackpotjoy generated about $250-million in gross wins and about $130-million in earnings before interest, taxes, depreciation and amortization. "Our stated vision is to focus on the female demographic, in regulated markets. This acquisition is consistent with this vision," said John FitzGerald, CEO of Intertain.
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Patient Home Monitoring Corp. said it signed a letter of intent to acquire a company in Oklahoma focused on home-based services for patients with sleep apnea, oxygen needs and other diseases of the lungs, for $900,000 in cash and 1.1 million shares.
The company said it aims to close the acquisition concurrently with a letter of intent signed in October to acquire a Texas-based company that provides wound care to patients with chronic conditions. "These acquisitions will mark PHM's continued expansion into new markets, in this case the lower Midwest region of the country," the company said.
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MEG Energy Corp. reported a fourth-quarter operating profit, compared to a loss a year earlier, largely as a result of higher bitumen volumes. The earnings were generated in a quarter that saw MEG slash its capital budget in response to the oil price collapse.
"We remain focused on finding new ways to profitably grow the business by increasing production at low-capital levels, tightly managing our operating costs, and achieving the highest possible netbacks through our value chain," said Bill McCaffrey, MEG's CEO.
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Savanna Energy Services Corp. announced the departure of its CEO and co-founder, Ken Mullen. Dwayne LaMontagne, the company's executive vice-president and chief development officer was named interim CEO.
The abrupt leadership change comes as Savanna struggles to cope with weak oil prices, having recently slashed its dividend and capital budget to protect its balance sheet. Over the past 10 months, Savanna's stock has declined by almost 80 per cent, hitting an all-time low of $2.03 a week ago.
Tim Shufelt