Quantum Advisory Northern Alberta Market Update
Nine Months Ended September 30, 2020
Bri-Chem
On July 17, 2020, Bri-Chem Corp. (“Bri-Chem”) announced the closing of a $6.25 million term loan (the “BCAP Loan” with CIBC under the Canadian Government Business Credit Availability Program (‘BCAP”). In addition, Bri-Chen reached an agreement to extend its Asset Based Lending Facility to October 31, 2021.
Bri-Chem is an independent wholesale supplier of drilling fluids for the oil and gas industry. Bri-Chem distributes, blends and packages a full range of drilling fluid products, cementing, acidizing and stimulation additives from 34 warehouses located throughout Canada and the United States. The drilling fluids are an integral part of the drilling process, serving a number of functions, including controlling subsurface pressures, lubricating the drill bit, stabilizing the wellbore, and carrying the cuttings to the surface, among other functions.
Alcanna (formerly "Liquor Stores")
On January 24, 2020, Alcanna Inc. (“Alcanna”) announced the closing of its previously announced formation of Canadian Liquor Retailers Alliance Limited Partnership (“Alliance”). The transaction was valued at $13 million, with Alcanna owning 100% of Alliance and Ace owning approximately 7.3% of Alliance shares.
On June 3, 2020, Alcanna announced Aurora Cannabis (which owned 23% of Alcanna’s common shares prior to the transaction) would sell to the underwriters on a bought deal basis all of its 9,200,000 common shares held in Alcanna at a price $3.00 per common share representing proceeds of $27.6 million. On June 24, 2020, the transaction closed.
Alcanna operates 254 retail liquor stores in Alberta, British Columbia, and Alaska.
AutoCanada
On January 28, 2020, AutoCanada Inc. (“AutoCanada”) announced a tender offer to purchase all of its outstanding 5.625% Senior Notes due May 25, 2021. The aggregate principal amount owing was $150 million to be purchased by AutoCanada for proceeds of $152.5 million.
On February 28, 2020, AutoCanada announced plans to amend and extend its existing credit facilities for 3 years. The amended credit facilities aggregating to $950 million will include a $175 million revolving credit facility, a $750 million wholesale floorplan financing facility and a $25 million wholesale leasing facility.. A portion of the credit facilities will be used to refinance AutoCanada’s 5.625% Senior Notes due May 25, 2021.
On February 11, 2020, AutoCanada announced the completion of a private placement of $125 million 8.75% Senior Notes due February 11, 2025. Proceeds of the offering will be utilized to refinance AutoCanada’s 5.625% Senior Notes due May 25, 2021.
AutoCanada is a leading North American multi-location automobile dealership group currently operating 63 franchised dealerships, comprised of 27 brands, in eight provinces in Canada as well as a group in Illinois, USA and has over 4,200 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Ford, Infiniti, Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, Smart, BMW, MINI, Volvo, Toyota, Lincoln, and Honda branded vehicles. In 2018, AutoCanada dealerships sold approximately 66,000 vehicles and processed approximately 915,000 service and\ collision repair orders in our 1,157 service bays generating revenue in excess of $3 billion.
Canadian Western Bank
On June 25, 2020, Canadian Western Bank (“CWB”) closed its $125 million Series G Subordinated Debentures. The Series G Subordinated Debentures will mature June 29, 2025 at an interest at 4.84% per annum.
CWB offers a full range of business and personal banking services across the four western provinces and is the largest publicly traded Canadian bank headquartered in Western Canada. CWB, along with its operating affiliates, National Leasing, Canadian Western Trust, Canadian Direct Insurance, Valiant Trust, Adroit Investment Management, McLean & Partners, and Canadian Western Financial offer a diversified range of financial services.
Capital Power
On March 16, 2020, Capital Power Corporation (“Capital Power”) announced an agreement to acquire a 100% ownership interest in Buckthorn Wind. The purchase price was estimated between US $60-69 million for a 100.5 megawatt wind facility located in Erath County, Texas. The acquisition provided Capital Power an opportunity to acquire a renewable asset with a 15 year weighted average contract life remaining.
On April 1, 2020, Capital Power announced the completion of its Buckthorn Wind acquisition from private investors. The purchase price approximated to range between US$60 million to US$69 million depending upon future performance.
On September 9, 2020, Capital Power announced the pricing of its Canada public offering of $350 million in unsecured medium term notes at a coupon interest rate of 3.147% maturing on October 1, 2032.
On October 9, 2020, Capital Power announced it would redeem all of its $251 million in outstanding 5.276% medium term notes due November 16, 2020.
Capital Power is a growth oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns approximately 6,200 megawatts of power generation capacity at 26 facilities across North America. An additional 800 megawatts of owned generation capacity is under construction in Alberta and Illinois.
Entrec Corporation
On May 8, 2020, Entrec Corporation (“Entrec”) announced it had completed the sale of surplus equipment to Ritchie Bros. Auctioneers (Canada) Ltd. The $17.7 million in proceeds will be used by Entrec to reduce its long-term debt.
Headquartered in Spruce Grove, Alberta, Entrec specializes in the lifting, transportation, loading, off-loading and setting of overweight and oversized cargo for the oil and gas, construction, petrochemical, mining and power generation industries.
Parkland Fuel Corporation
On February 14, 2020, Parkland Fuel Corporation (“Parkland Fuel”) announced it had completed the acquisition of the entities and assets comprising Kellerstrass Oil Company based in Salt Lake City, Utah.
On March 9, 2020, Parkland Fuel announced an asset agreement to acquire seven Conoco branded forecourt retail sites located in and around Billings, Montana.
Parkland Fuel is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland Fuel services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland Fuel optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland Fuel provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.
Rifco
On July 14, 2020, Rifco Inc. (“Rifco”) announced it had received renewal of its financing facility renewal with Securcor Trust for $50 million.
Rifco operates through its wholly owned subsidiary Rifco NAF to provide automobile loans through its dealership network across Canada.
Stuart Olson
On June 28, 2020, Stuart Olson Inc. (“Stuart Olson”) announced it will pay the June 30, 2020 interest payment of $2,450,000 attributable to its 7.0% Convertible Unsecured Subordinated Debentures by issuing common shares The common shares will be issued at a 20% discount to the five day weighted average trading price of Stuart Olson’s common shares ended June 29, 2020.
On September 25, 2020, Bird Construction Inc. (“Bird”) and Stuart Olson announced Bird had completed its acquisition of Stuart Olson for approximately $96.5 million (included the debt Stuart Olson). The purchase price was comprised of $30 million in cash and $66.5 million of the common shares of Bird.
Stuart Olson provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to an array of public and private sector clients. Stuart Olson operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.