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Press release from Marketwire

Entrec Signs Definitive Agreement to Acquire GT's Crane and Transportation Services Inc.

- Positions ENTREC as the leading heavy lift and heavy haul company in Northeast B.C. and Northwest Alberta - Strengthens ENTREC's ability to benefit from expected future investments in LNG driven natural gas infrastructure spending - Expected to be immediately accretive to earnings per share for fiscal 2013

Tuesday, June 04, 2013

Entrec Signs Definitive Agreement to Acquire GT's Crane and Transportation Services Inc.

05:00 EDT Tuesday, June 04, 2013

SPRUCE GROVE, ALBERTA--(Marketwired - June 4, 2013) - ENTREC Corporation (TSX VENTURE:ENT) ("ENTREC") today announced that it has signed a definitive agreement to acquire a 100% interest in GT's Crane and Transportation Services Inc. and all of its operating subsidiaries ("GT's"). Based in Grande Prairie, Alberta, GT's has 180 employees and operates a fleet of 45 cranes, including all-terrain, rough-terrain and picker trucks, 130 multi-wheeled trailers and 50 tractors. GT's has invested heavily in growing its equipment base over the past two years and now owns a modern fleet with a current average age of less than four years and fair value of approximately $37 million. GT's operations include Grande Prairie, Whitecourt, and Leduc, Alberta and Dawson Creek and Fort Nelson, B.C.

"We are pleased to welcome GT's to the ENTREC team," said John M. Stevens, ENTREC's President and COO. "GT's has a reputation for strong customer service in the regions it serves, and comes with an excellent management team and experienced employee base. With the combined operations of ENTREC and GT's, we believe we will be well positioned to capture a significant portion of planned future investments in Liquefied Natural Gas ("LNG") driven infrastructure within these regions. This is in addition to the strong market position we already enjoy in Northwest B.C. where many of the proposed LNG facilities will be constructed. The acquisition is also expected to be immediately accretive to our earnings per share for fiscal 2013, even before accounting for significant annual operating synergies."

"We are very excited to combine our team with ENTREC's," said Greg Toews, GT's President and CEO. "We believe ENTREC is a great fit for both our customers and our employees, and that the business combination will enable us to better capture significant growth in these regions."

Post-closing, Mr. Toews will be appointed as ENTREC's Executive Vice President Operations and oversee ENTREC's business operations in Northwest Alberta and Northeast B.C.

The aggregate consideration payable for GT's will consist of (i) the issuance of 9,054,336 common shares of ENTREC; (ii) $37,223,380 in cash; and (iii) an unsecured promissory note of $7,293,770 bearing interest at an annual rate of 7.25% and due July 2, 2016. ENTREC plans to utilize its senior credit facilities to finance the cash portion of the purchase price and will not assume any long-term debt obligations as part of the transaction. The acquisition of GT's is expected to close on or about July 2, 2013.

The purchase price will also be subject to adjustment based on GT's normalized earnings before interest, taxes, depreciation and amortization ("EBITDA") for the 12-month period ending June 30, 2013 and working capital as at June 30, 2013. ENTREC anticipates GT's will generate revenue of approximately $53.0 million and normalized EBITDA of approximately $14.3 million during the 12 months ended June 30, 2013 and have positive working capital of $7.5 million at closing. The cash portion of the purchase price will be subject to reduction if GT's normalized EBITDA for the trailing 12 months ending June 30, 2013 is below $14.3 million. ENTREC currently anticipates recurring annual operating cost synergies of approximately $3.0 million as a result of the acquisition, which will be achieved through facility consolidations and the elimination of redundant administrative and operating costs.

ENTREC Updates Capital Expenditure Program

ENTREC also today announced it plans to update its 2013 capital expenditure program as a result of the GT's acquisition. ENTREC believes it will be able to reallocate currently underutilized equipment of GT's, negating the need for capital expenditures on certain tractor and trailer equipment. ENTREC is reallocating approximately $6.0 million of these expenditures to add additional capacity to its crane fleet as well as acquire self-propelled modular trailers ("SPMTs"). SPMTs are specialized self-propelled platform trailers that are used extensively in the on-going maintenance of large industrial facilities. ENTREC has recently taken delivery of its first SPMT units under lease rental and expects additional SPMTs to arrive into its fleet through its capital expenditure program this fall. ENTREC estimates its revised 2013 capital expenditure program of $53 million (up from $50 million previously) will consist of the following components:

Cranes (all-terrain, rough terrain, crawlers, truck cranes, picker trucks) $29 million
Heavy haul transportation equipment (including SPMTs) $13 million
Fort McMurray land and improvements $7 million
Other $4 million
Total $53 million

Although not required to complete the acquisition of GT's or its 2013 capital expenditure program, ENTREC anticipates it will also increase its senior credit facilities to a total of $190 million (from $140 million currently), consisting of a $20 million operating facility and a $170 million revolving term facility. This increase will ensure ENTREC continues to have significant unutilized credit facilities available to provide maximum flexibility on a go forward basis.

Raymond James Ltd. is acting as exclusive financial advisor to GT's with respect to the transaction.

Reader Advisory

Completion of the proposed acquisition of GT's is subject to, among other things, regulatory approval (including but not limited to the approval of the TSX Venture Exchange), lender approval, and the completion of customary closing conditions. There can be no assurance that these conditions precedent, or any other conditions precedent, will be satisfied. Further, there can be no assurance that the proposed transaction will be completed as proposed or at all.

About ENTREC

ENTREC is a leading provider of heavy lift and heavy haul services with offerings encompassing crane services, heavy haul transportation, engineering, logistics and support. ENTREC provides these services to the oil and natural gas, construction, petrochemical, mining and power generation industries. ENTREC's common shares trade on the TSX Venture Exchange under the trading symbol "ENT".

Forward-looking statements

This press release contains forward-looking statements that reflect ENTREC's current beliefs and that are based on information currently available to ENTREC. These statements require ENTREC to make assumptions it believes are reasonable but, as a result of such assumptions, such forward-looking statements are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond ENTREC's control.

Examples of such forward-looking statements in this press release relate to, but are not limited to, (i) ENTREC's expectation that the GT's acquisition will be completed and the terms on which it will be completed; (ii) ENTREC's belief the acquisition of GT's will position ENTREC as a leading heavy lift and heavy haul company in Northeast B.C. and Northwest Alberta and strongly position ENTREC to benefit from the expected future investments in LNG driven natural gas infrastructure spending; (iii) ENTREC's anticipation that GT's will generate normalized EBITDA of approximately $14.3 million during the 12 months ended June 30, 2013 and have positive working capital of $7.5 million at closing, (iv) ENTREC's anticipation of recurring annual operating cost synergies of approximately $3.0 million as a result of the acquisition; (v) ENTREC's expectation that the acquisition of GT's will be immediately accretive to earnings per share in fiscal 2013; (vi) ENTREC's ability to complete its revised 2013 capital expenditure program; and (vii) ENTREC's ability to increase its senior credit facilities to $190 million. These forward-looking statements rely on certain expectations and assumptions, including, among others, (i) closing conditions to the transactions being completed and ENTREC obtaining lender and regulatory approval; (ii) GT's meeting or exceeding ENTREC's internal synergy savings, revenue, net income, and cash flow forecasts for the referenced periods, and (iii) ENTREC's ability to receive delivery of and finance its 2013 planned capital expenditures or receive lender approval to increase its credit facilities.

Although ENTREC believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because ENTREC can give no assurance that they will prove to be correct. ENTREC may not be able to obtain all required approvals to complete the GT's acquisition. Further, ENTREC's and GT's ability to achieve those internal synergy, revenue, net income and cash flow forecasts may be negatively impacted by a variety of factors including, but are not limited to, ENTREC's ability to achieve facility consolidations or the elimination of redundant administrative and operating costs, fluctuations in the demand for specialized crane and heavy haul transportation services in the areas GT's serves, political and economic conditions, industry competition, and ENTREC's and GT's ability to attract and retain both customers and key personnel. Readers are cautioned not to place undue reliance on these forward-looking statements, which are given as of the date hereof, and to not use such forward-looking statements for anything other than their intended purpose. ENTREC undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

FOR FURTHER INFORMATION PLEASE CONTACT:

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information:
ENTREC Corporation
Rod Marlin
Chairman & CEO
(780) 960-5647


ENTREC Corporation
John M. Stevens
President & COO
(780) 960-5625


ENTREC Corporation
Jason Vandenberg
CFO
(780) 960-5630

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