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Atlas raises $3.8M in first tranche of private offering to fund deals

Proceeds are expected to be applied toward the purchase Tandelle Specialty and Pacer Building Components
Engineered wood used in construction
Atlas said it's using proceeds of the offering to pay for Tandelle Specialty and Pace Building Components

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.

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