Atlas Engineered Products Ltd (CVE:AEP) (OTCMKTS:APEUF) announced Tuesday it is expanding its geographical footprint into British Columbia’s Lower Mainland region through the acquisition of assets from a local truss manufacturer.
Located in the province’s Fraser Valley, the newly-acquired operation will supply Atlas’s engineered wood products like pre-manufactured wall panels and manufactured floor trusses to the Lower Mainland region.
The move comes as the engineering company looks to fast-track its expansion plans in the province amidst “significant demand” for its products and services, CEO Dirk Maritz told shareholders in a statement.
READ: Atlas Engineered Products continues growth journey despite pandemic; posts 14% revenue growth in 1Q
According to Maritz, AEP's core market segment in the residential market showed a 3.5% increase in registrations to June 2020 compared to 2019 while the residential and commercial building market in the province continues to perform.
The resilience of the sector encouraged AEP to speed up its expansion plans in BC, firstly through the establishment of a new pre-fabricated wall factory expansion in Nanaimo, the company said.
“There is a significant market demand for AEP's products and services in Lower Mainland BC, and our other BC location is performing at record levels," Maritz said.
"A few months ago we identified an outstanding smaller player in the truss manufacturing market and have entered into an agreement to purchase some key assets. Once this acquisition is completed, we will continue upgrades to this facility and its equipment in order to expand and develop the Lower Mainland market through a full-service business.”
AEP’s newly established company Novum Building Components Ltd will conduct the acquisition. Under the term sheet, AEP will purchase the assets for C$350,000 in cash, with 50% of the price to be paid on closing and the remainder payable in equal monthly instalments over three years.
The deal is expected to close by the end of July.
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