Atlas Engineered Products Ltd (CVE:AEP), a supplier of engineered wood products, said Tuesday that it raised $3.8 million in the first tranche of a non-brokered placing.
Proceeds are expected to go towards the purchase of shares of Tandelle Specialty Inc and Pacer Building Components as well as general working capital purposes, Atlas said in a regulatory release.
READ: Atlas Engineered Products completes strategic acquisition of Coastal Windows
Under the private placement, Atlas sold about 9.5 million units at $0.40 each. Each unit consists of one Atlas share and one-half of one warrant. Each whole warrant entitles the holder to purchase a common share at a price of $0.60 per share for two years from the date of issuance.
The securities issued in the first tranche are subject to a four-month and one-day holding period expiring on March 1, 2019.
Shares of Atlas are trading at $0.41 on the TSX venture exchange.
Atlas said it has the right to accelerate the expiry of the warrants if its shares trade at a volume weighted average price greater than $0.80 per share for 20 consecutive trading days. If exercised, the expiration date of the warrants will be accelerated to the date that is 30 days after Atlas issues a news release announcing the exercise of acceleration.
Guy Champagne, the president of Atlas, told Proactive Investors last December that growth through acquisition is a key aspect of its strategy. In February, Atlas completed its $2.6 million acquisition of Clinton Roof Truss.
The deal for Tandelle-Pacer was originally scheduled to close by October 31. Atlas, based in Vancouver, expects the purchase to close soon.