CERF Incorporated and Winalta Inc. Announce Proposed Strategic Business Combination to Create a Leading Oilfield Rentals Prov...

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES


CERF Incorporated ("CERF") (TSX VENTURE:CFL) and Winalta Inc. ("Winalta") (TSX
VENTURE:WTA) are pleased to announce that they have entered into a definitive
arm's-length agreement (the "Agreement") to combine CERF's oilfield rentals
business, waste management, and construction rentals businesses with Winalta's
oilfield accommodation rentals business (the "Combination"). The combined
company will operate under the name CERF and will continue to trade on the TSX
Venture Exchange ("TSXV") under the symbol "CFL".


The Combination will be effected by way of a plan of arrangement (the
"Arrangement") under the Business Corporations Act (Alberta) whereby Winalta
shareholders will receive 0.3352 of a common share of CERF for each Winalta
common share held (the "Exchange Ratio") resulting in approximately 14,456,717
CERF common shares being issued. Upon completion of the Combination, the current
shareholders of CERF will own approximately 61% of the combined entity and the
shareholders of Winalta will own approximately 39% on a fully diluted basis.
Based on CERF's closing price on June 25, 2014 of $3.49, the Exchange Ratio
equates to $1.17 per Winalta share.


STRATEGIC HIGHLIGHTS

A combination with Winalta will solidify CERF as a leading Canadian oilfield
rentals provider with:




--  one of the largest and most diversified fleets of commercial, industrial
    and oilfield related rental equipment in Canada; 
--  entry into the wellsite accommodations sector with size and scale
    resulting in critical mass in the high growth oilfield rentals sector in
    western Canada; 
--  expanded geographic positioning and a more diverse suite of rental
    assets resulting in increased overall market penetration amongst a
    larger number of E&P clients; and 
--  increased EBITDA margins and reduced cash flow volatility due to the
    contract backed nature of Winalta's integrated wellsite business.



In addition, the Combination should also provide strategic corporate benefits to
CERF, including:




--  accretive to CERF shareholders on a net earnings and distributable cash
    flow per share basis, based on management estimates; 
--  significant operational and marketing synergies among the combined
    oilfield rental divisions; 
--  general and administrative cost saving synergies; 
--  increased opportunities for consolidation in the oilfield rentals and
    accommodations business; and 
--  the creation of a geographic presence across the majority of the key oil
    and gas resource plays in Canada.



CERF continues to focus its efforts on three core business lines encompassing
oilfield rentals, construction rentals and waste and environmental services.
Winalta's assets, client base, personnel, safety and operational performance
meet CERF's criteria and deliver the oilfield accommodation rentals service
lines CERF has been seeking.


Wayne Wadley, CERF's President and CEO, said "Winalta has assembled a quality
wellsite accommodation fleet in Canada with an operations team that consistently
achieves industry leading utilization and margins. We are excited about the
operational synergies with our TRAC Energy Services oilfield rentals division
and the future growth opportunities that will come as a result of the increasing
demand for oilfield accommodations in western Canada."


Artie Kos, Winalta's Executive Chairman, said "The combination combines two
companies with best-in-class assets to create one of the top rental companies in
western Canada. CERF provides Winalta shareholders with increased liquidity in a
growing company that has a history of consistently paying a high dividend and
acquiring quality businesses." 


The Boards of Directors of CERF and Winalta have approved the Agreement.
Officers and Directors holding approximately 5.9 million shares, options and
warrants of CERF (approximately 26% of the fully diluted shares outstanding) and
25.3 million shares and options of Winalta (approximately 59% of the fully
diluted shares outstanding) have signed lock-up agreements in support of the
Combination. The proposed Combination is subject to customary stock exchange,
regulatory and court approvals as well as the approval of the holders of at
least 66 2/3% of the outstanding shares of Winalta and, if required by the TSXV,
the approval of a majority of the shareholders of CERF voting in person or by
proxy at their respective special meetings of shareholders expected to be held
in late August 2014. An information circular pertaining to the Combination is
expected to be mailed by CERF and Winalta to their respective shareholders in
late July 2014.


SUMMARY OF WINALTA

Winalta has assembled one of the premier wellsite accommodation fleets in the
industry and has developed a brand that is known for providing exceptional
service to its clients. Winalta is one of the largest wellsite providers in
Western Canada, servicing its clients from locations in Stony Plain and Grande
Prairie (Alberta) and in Estevan (Saskatchewan). Winalta currently employs 18
full time staff and operates 239 wellsites, 5 integrated wellsites, 31 geo labs
and 10 drill camps across western Canada.


At an implied purchase price of approximately $65 million including net debt,
CERF is acquiring Winalta at the following transaction metrics:




EV / 2014E EBITDA (1)                           4.8x                        
EV / Replacement value of assets (1)            97%                         
(1) Based on Winalta management's internal estimates and estimated net debt 
(calculated as total interest bearing debt less cash) as at June 30, 2014   



EXECUTIVE MANAGEMENT

The combined company will be led by an experienced executive management team,
including:




--  Wayne Wadley, President & Chief Executive Officer 
--  Ken Stephens, Chief Financial Officer 
--  Austin Fraser, Executive VP Corporate Development 
--  Skip Kerr, Chief Operating Officer 



Artie Kos, Executive Chairman of Winalta, will continue in an ongoing advisory
role with the combined company. David Hopley, Chief Financial Officer of
Winalta, is expected to continue to work with the company on a transitional
basis.


BOARD OF DIRECTORS

The Board of Directors of the combined entity will consist of four members of
the current and nominated CERF Board of Directors and three members of the
current Winalta Board of Directors who will be nominated for election at the
upcoming special meeting of holders of shares of CERF. The Board of Directors of
the pro forma CERF are expected to include Bill Guinan, David Maplethorpe, Wayne
Wadley and Ken Stephens from the current CERF Board of Directors, and Blair
Goertzen, Brad Munro and Alf Sailer from the current Winalta Board of Directors.


FINANCIAL ADVISOR

AltaCorp Capital Inc. is acting as financial advisor to the Board of Directors
of Winalta and has provided the Board of Directors of Winalta with a verbal
opinion that, subject to the review of final documentation, the consideration to
be received by the holders of Winalta common shares pursuant to the Arrangement
is fair, from a financial point of view, to the holders of Winalta common
shares.


OTHER TERMS OF THE COMBINATION

The Agreement contains customary terms and conditions for a transaction of this
nature, including: representations and warranties of CERF and Winalta and
covenants applicable to each such entity until closing of the Combination
regarding their respective businesses and affairs; a prohibition upon both CERF
and Winalta from soliciting or initiating any discussion concerning any other
business combination or similar transaction prior to the completion or
termination of the Combination; the right of CERF and Winalta to match any
unsolicited superior proposal received by the other party; and a reciprocal
termination fee of $1 million payable to either Winalta or CERF, as the case may
be, in certain circumstances. 


Complete details of the terms of the Combination are set out in the Agreement,
which will be filed by each of CERF and Winalta on SEDAR and will be available
for viewing under each of CERF and Winalta's profiles at www.sedar.com.


ABOUT CERF

CERF Incorporated is a Canadian public corporation engaged in the rental, sale
and service of industrial and construction equipment and waste management and
environmental services. The Equipment Rental Segment includes the rental of
residential, commercial and industrial construction-related equipment, including
sales and service of equipment. It also includes the rental and sale of
equipment to the drilling and service sectors of the oil and natural gas
industry. The Waste Management Segment consists of complete waste facility
management (six landfill sites in central Alberta) including waste facility
design and construction services, recycling management and collection services,
and consulting services. The Waste Management Segment also consists of waste
removal and disposal from commercial, industrial and residential customers. CERF
Incorporated trades on the TSXV under the symbol "CFL".


ABOUT WINALTA

Winalta specializes in the rental of innovative and high-quality modular
buildings for the western Canadian oil and gas industry. Winalta's rental fleet
is comprised of single-unit wellsites, integrated wellsite systems (IWS),
dedicated geo labs, and drill camps. Winalta Inc. trades on the TSXV under the
symbol "WTA".


Cautionary Note Regarding Forward-Looking Information

This news release contains certain "forward-looking information" within the
meaning of Canadian securities laws, which may include, but is not limited to,
statements with respect to future events or future performance, the timing and
prospects for shareholder approval of the Combination, the implementation of the
Combination, the integration of CERF and Winalta following the Combination
(including synergies), the management team of the combined entity, results for
business lines and critical mass, access to capital and liquidity, ability to
capitalize on acquisition and growth opportunities, and integration of the two
entities and anticipated operating efficiencies.


These statements reflect the current views of CERF and Winalta with respect to
future events and are necessarily based upon a number of assumptions and
estimates that, while considered reasonable by CERF and Winalta, are inherently
subject to significant business, economic, political and social uncertainties
and contingencies. Many factors, both known and unknown, could cause the
resulting entity's actual results, performance or achievements to be materially
different from the results, performance or achievements that are or may be
expressed or implied by such forward-looking statements contained in this news
release, and CERF and Winalta have made assumptions based on or related to many
of these factors. Such factors include, without limitation: fluctuations in the
level of oil and natural gas exploration and development activities;
fluctuations in the demand for well servicing and ancillary oilfield services;
capital market liquidity available to fund customer programs; uncertainties
associated with partner plans and approvals; the effects of seasonal and weather
conditions on operations and facilities; the existence of competitive operating
risks inherent in well servicing and ancillary oilfield services; general
economic, market or business conditions; changes in laws or regulations; the
availability of qualified personnel, management or other key inputs; currency
exchange and interest rate fluctuations ; uncertainty of government policy
changes; uncertainties associated with credit facilities and counterparty credit
risk; changes in income tax laws or changes in tax laws; risks related to the
operating nature of the resulting entity's business; political or economic
developments in Canada; employee relations; litigation; and other unforeseen
conditions which could impact the use of equipment and services supplied by the
resulting entity. Forward-looking information and statements are also based upon
the assumption that none of the identified risk factors that could cause actual
results to differ materially from the forward-looking information and statements
will occur. Additional information regarding some of these risks, expectations
or assumptions and other factors may be found under in the Annual Information
Form for the year ended December 31, 2013 of each of CERF and Winalta. 


Although CERF and Winalta have attempted to identify important factors that
could cause actual results to differ materially, there may be other factors that
cause results not to be anticipated, estimated, described or intended. There can
be no assurance that the forward-looking information will prove to be accurate,
as actual results and future events could differ materially from those
anticipated in such information. Accordingly, prospective investors should not
place undue reliance on forward-looking information. The forward-looking
information contained in this news release is made as of the date hereof and
each of CERF and Winalta undertakes no obligation to update publicly or revise
any forward-looking information, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.


Certain information set out herein may be considered as "financial outlook"
within the meaning of applicable securities laws. The purpose of this financial
outlook is to provide readers with disclosure regarding CERF and Winalta's
reasonable expectations as to the anticipated results of the proposed business
activities for the resulting entity for the periods indicated. Readers are
cautioned that the financial outlook may not be appropriate for other purposes.


Non-IFRS Measures

This news release includes references to financial measures commonly used in the
oil and natural gas services industry. The term "EBITDA" (net earnings from
continuing operations before interest and finance costs, income taxes,
depreciation and amortization) does not have any standardized meaning under
International Financial Reporting Standards (IFRS),, and may not be comparable
with similar measures presented by other companies, however Winalta calculated
EBITDA consistently from period to period. While EBITDA is not considered an
alternative to net earnings in measuring performance, it is a key measure used
by the Winalta and its investors. Winalta believes EBITDA assists investors in
assessing Winalta's performance on a consistent basis without regard to
financing costs, taxes and depreciation which, can vary significantly from
period to period for reasons not directly related to operations. 


This news release does not constitute an offer to sell or the solicitation of an
offer to buy any securities within the United States, nor shall there be any
sale of the securities in which such offer, solicitation or sale would be
unlawful. The securities of CERF to be offered have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, or any state
securities laws, and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
such Act or other laws. 


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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Winalta Inc.
Austin Fraser
President
[phone]
[e-mail]


Winalta Inc.
David Hopley
CFO
[phone]
[e-mail]


CERF Incorporated
Wayne Wadley
President and CEO
[phone]
[e-mail]


CERF Incorporated
Ken Stephens
Vice President Finance & CFO
[phone]
[e-mail]