Northern Frontier Corp. Announces Proposed Public Offering of Subscription Receipts and the Proposed Acquisition of the NEC G...

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

CALGARY, April 23, 2013 /CNW/ - Northern Frontier Corp. (TSX-V: FFF.P) (the "Corporation" or "Northern Frontier") is pleased to announce that it has entered into a definitive arms-length share purchase agreement (the "Share Purchase Agreement") dated April 22, 2013 with 794522 Alberta Ltd. ("Numberco"), NEC Contractors (2012) Inc. ("NEC" and together with Numberco, the "NEC Group") and the shareholders of the NEC Group, being The Kevin Benson Family Trust, The Albert and Colette Benson Family Trust, 1351600 Alberta Ltd., 1351601 Alberta Ltd., Kevin Benson and Colette Benson (collectively, the "NEC Shareholders") pursuant to which the Corporation through its wholly-owned subsidiary, 1739365 Alberta Ltd. (the "Purchaser"), will acquire all of the issued and outstanding shares of Numberco (the "Numberco Shares"). The Corporation has also entered into a definitive arms-length asset purchase agreement (the "Asset Purchase Agreement" and, collectively with the Share Purchase Agreement, the "Agreements") dated April 22, 2013 with CRC Open Camp & Catering Ltd. ("CRC"), which is owned by certain of the NEC Shareholders, pursuant to which the Purchaser will acquire certain assets (the "CRC Carve-out Assets") held by CRC and used in the NEC Group business (together with the transactions contemplated by the Share Purchase Agreement, the "Acquisition").

The NEC Group provides sustaining capital services to large industrial energy customers in the steam assisted gravity drainage ("SAGD") region of northeastern Alberta.  The NEC Group's head office and shop is located in Lac La Biche, Alberta and its field location is in Conklin, Alberta which is central to the substantial industrial energy production developments in the vicinity.  The business focuses on the ongoing demand for services to support operating facilities, sustaining capital expenditures to maintain production levels of those facilities and the development of new production capacity.

The aggregate purchase price payable for the Acquisition is approximately $48.5 million, subject to adjustment (consisting of approximately $43.5 million in cash and $5.0 million worth of common shares of the Corporation) plus an additional contingent payment of $2.0 million, as described in detail below - see "The Acquisition". The purchase price payable for the Acquisition was determined using a 3.8x multiple (3.9x including the contingent payment of $2.0 million) of the combined, pro forma adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of the NEC Group business (including the CRC Carve-out Assets) normalized for significant capital asset additions made by the NEC Group during fiscal 2012.  Northern Frontier will acquire the combined operation with sufficient working capital to continue operations and on a cash-free, debt-free basis. Following completion of the Acquisition, the NEC Group entities will be wholly-owned subsidiaries of Northern Frontier (together, the "Resulting Issuer").

Concurrent with, and as a condition of, the Acquisition, the Corporation has engaged GMP Securities L.P. and Raymond James Ltd. as co-lead agents, together with Acumen Capital Finance Partners Limited and Cormark Securities Inc. (the "Agents") to complete a fully-marketed prospectus offering of subscription receipts (the "Subscription Receipts") for common shares of the Corporation ("Common Shares") on a "commercially reasonable efforts" basis (the "Offering") at a price to be determined in the context of the market (the "Offering Price"). The net proceeds of the Offering will be used by the Corporation to fund a portion of the purchase price of the Acquisition.  The Corporation expects to file a preliminary prospectus to qualify the distribution of the securities listed above on or about April 23, 2013.  The preliminary prospectus is subject to completion and the receipt of applicable regulatory approvals.  The Offering will be qualified in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario.  The Corporation will provide subsequent public disclosure regarding the Offering on completion of marketing efforts.

The Corporation has also agreed to grant the Agents an option (the "Over-Allotment Option") to purchase up to such number of additional Subscription Receipts and/or Common Shares (as applicable, depending on when exercised) as is equal to 15% of the number of Subscription Receipts sold under the Offering to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option shall be exercisable, in whole or in part, on the closing of the Offering and for a period of 30 days thereafter.

The Corporation has also entered into a term sheet with a Canadian chartered bank with respect to a credit facility (the "Credit Facility").  The Corporation expects to establish the Credit Facility on or prior to the closing of the Acquisition.  The Credit Facility is expected to consist of: (i) a $15.0 million committed revolving extendible credit facility; (ii) a $20.0 million committed revolving reducing extendible term loan; (iii) a treasury risk management facility subject to a limit of $1.0 million; and (iv) corporate MasterCard for up to $500,000.  The term sheet with respect to the Credit Facility contains customary conditions precedent to the lender entering into the Credit Facility, including completion of the Offering.

The Acquisition is subject to the approval of the TSX Venture Exchange (the "Exchange") and the policies of the Exchange relating to qualifying transactions. The Acquisition, when completed, will constitute the qualifying transaction of the Corporation pursuant to Policy 2.4 of the Exchange.

About the NEC Group and the CRC Carve-out Assets

The NEC Group provides sustaining capital services to large industrial energy customers in the SAGD region of northeastern Alberta.  The NEC Group's head office and shop is located in Lac La Biche, Alberta and its field location is in Conklin, Alberta which is central to the substantial industrial energy production developments in the vicinity.  The business focuses on the ongoing demand for services to support operating facilities, sustaining capital expenditures to maintain production levels of those facilities and the development of new production capacity.

The NEC Group

Numberco (formerly NEC Contractors Ltd.) is a private Alberta corporation formed on July 29, 1998.  Numberco amended its articles on July 5, 2012 to change its name from NEC Contractors Ltd. to 794522 Alberta Ltd.  NEC is a private Alberta corporation formed on December 23, 2011. NEC operates as a wholly-owned subsidiary of Numberco.

Operations

The NEC Group's services consist primarily of construction and maintenance of civil works for plant replacement and production sustaining projects.

Large SAGD facilities and other industrial projects are often constructed in remote areas with limited access or local services.  The owners and operators of such facilities and projects often sub-contract the construction of civil works to third party providers.  The NEC Group builds site access roads and other engineered earthworks for sustaining capital works, maintenance operations and some initial development projects for SAGD facilities and other industrial facilities.  Engineered earthworks projects typically require clearance, excavation, movement and placement of earth to construct plant sites, production pads, roads and corridors.  The development of these structures then requires maintenance support services such as repair, gravel placement, water control, snow removal and other functions on a continuous basis, all of which the NEC Group provides.

SAGD facilities, including those necessary to inject the steam into the reservoir and to recover the bitumen emulsion from the reservoir, are constructed on large production pads.  The NEC Group provides sustaining capital projects for SAGD facilities, including the construction of initial and supplemental production pads and the associated roads and corridors necessary to operate such facilities.  The ongoing demand for services and support to maintain production levels in the SAGD market is expected to grow with production levels.  One of the key drivers of the ongoing maintenance market in the SAGD industry is the annual need for replacement production.  Each production pad for a SAGD plant has multiple well pairs. These well pairs can produce bitumen from a finite area.  Once the bitumen is removed and produced there is a need for a new production pad in order to continue bitumen extraction.  Production pads are used to replace declining production and depleted zones and are required each year to support the SAGD facility's ongoing production.  These projects proceed on a recurring basis for the life of the facility to supplement and replace declining production from previously constructed infrastructure.  The NEC Group constructs approximately three production pads (replacement or supplemental) every year for each 35,000 bbl/d increment of its clients' operational capacity.

In addition to activities in the Alberta Oilsands, the NEC Group provides similar construction and maintenance services in the civil infrastructure markets, including in support of the construction of powerlines, pipelines and other infrastructure projects.

The NEC Group also provides water and sewage hauling services for local camp facilities. The NEC Group initially provided these services only to its own camp facilities, but found it profitable to extend them to other third party operated facilities.  The NEC Group currently provides such services to one other local camp and management of the Corporation believes that there are additional growth opportunities in this area.

Equipment

The NEC Group operates approximately 120 pieces of heavy equipment, numerous pieces of support and service equipment and many light vehicles, some of which it currently rents from CRC on an exclusive basis.  The NEC Group also rents from CRC a camp facility that has 136 beds, a kitchen and supporting equipment which are used for the operation of the camp.  The Corporation will acquire all of these assets from CRC as part of the Acquisition.

The categories for the NEC Group equipment and carrying values as at December 31, 2012 are detailed in the following table (exclusive of the CRC Carve-out Assets) and are derived from the audited consolidated financial statements of the NEC Group for the year ended December 31, 2012.

Net book value ($)		Dec 31, 2012
Automotive equipment		1,523,936
Computer equipment		659
Construction and excavating equipment		4,327,828
Furniture and fixtures		21,738
Leasehold improvements		23,606
Shop equipment		172,821
Trailers		50,988
Automotive equipment under finance lease		436,844
Construction and excavating equipment under finance lease		9,428,633
Total		15,987,053

Premises

The NEC Group has two locations for its operations. In Lac La Biche, Alberta, NEC leases a six acre lot with a 12,000 square foot shop and a 6,400 square foot office from CRC pursuant to a rental agreement dated January 1, 2012 (the "Lac La Biche Lease"). In Conklin, Alberta, the NEC Group leases a 20 +/- acre lot with shop and laydown facilities from the Province of Alberta which it intends to acquire prior to the closing of the Acquisition and sub-leases from CRC a portion of a 20 acre parcel for its camp and associated infrastructure (the "Conklin Sub-Lease").  The parties to the Lac La Biche Lease and the Conklin Sub-Lease are not at arms' length.

As part of the Acquisition, the Lac La Biche Lease and the Conklin Sub-Lease will be cancelled and replaced with new lease agreements on arm's length commercial terms.

The Lac La Biche, Alberta facility supports the maintenance and care of the equipment assets, administrative functions and management. The facility has two bays for heavy equipment maintenance, one bay for truck and light vehicle maintenance, one warehouse and one welding shop.  Miscellaneous storage facilities and fleet parking are also provided in Lac La Biche, Alberta.

The Conklin, Alberta location provides field operations offices, shop and camp facilities, a fueling station, water and sewer base of operations and laydown yards for materials and equipment.

CRC Carve-out Assets

The CRC Carve-out Assets consist of approximately 22 pieces of heavy equipment, including rock trucks, excavators, dozers, loaders, graders and compaction equipment. In addition, the CRC Carve-out Assets include a 136 bed camp facility, including kitchen and supporting equipment which are used for the operation of the camp.  NEC currently utilizes the CRC Carve-out Assets, on an exclusive basis, to operate its business, inclusive of the equipment and camp.  Northern Frontier will acquire the equipment and camp, enter into a facility lease agreement and a land lease agreement with CRC concurrent with the closing of the purchase of the NEC Group.  The CRC Carve-out Assets do not constitute a "business" for purposes of applicable securities legislation.

The categories for the equipment and carrying values as at December 31, 2012 are detailed in the following table and are derived from the audited schedule of CRC Carve-out Assets.

Net book value ($)		Dec 31, 2012
Construction and excavating equipment		2,403,216
Portable accomodations		1,691,801
Furniture and fixtures		52,829
Total		4,147,846

Benefits of the Acquisition

Northern Frontier has developed the strategic objective of creating an integrated resource maintenance, logistics and civil services business through a buy and build growth strategy.  The acquisition of the NEC Group and the CRC Carve-out Assets provides a platform from which to execute this strategy.  Specifically, management of Northern Frontier believes that the anticipated benefits and upside potential associated with the Acquisition include the following:

Established Market Position in the Oilsands

The NEC Group has been operating in the Lac La Biche, Alberta and Conklin, Alberta areas since 1998 and through its predecessors since 1978.  Services provided by the NEC Group are well established in the market and the NEC Group has deep relationships with many of the SAGD operators in the area as the local services provider.  This established market position would be difficult to replicate.

Barriers to Entry

The cold climate, remote location, challenging topography, shortages of skilled labour, stringent safety requirements of the major oil companies, large investment in fleets of equipment, connection to the local community, and established customer relationships, all combine to form strong barriers to entry for competitors of the NEC Group.

Skilled Labour is in Short Supply

The NEC Group's base in Lac La Biche and Conklin, Alberta provides it with a competitive advantage because it has been able to retain many of its current employees by providing accommodations and familiarity with the clients, residence and leadership.  Advantages in recruiting from the local workforce are also present and the NEC Group expects to continue to recruit skilled labour from the local community in the future.

Demand for Civil Services, Maintenance Services and Logistics is Growing

The planned capital expenditures in the Oilsands over the next five years is estimated to be over $110 billion.  (Source: ERCB June 2012, Supply/Demand outlook report).  With the growing infrastructure base comes increased annual maintenance and operations support budgets in addition to development spending.  Annual expenditures are estimated to grow from $17 billion in 2012 to $32 billion in 2022 in the SAGD market alone.  (Source: Canadian Energy Research Institute (Study # 128, March 2012)).

Opportunity to Expand Outside of the Oilsands and Diversify Customer Base

With access to additional capital, management believes Northern Frontier will be able to expand the NEC Group business through additional acquisitions and geographic expansion.  The NEC Group's existing fleet of equipment is highly utilized servicing its existing customers.  Management believes with a larger fleet of equipment and new service offerings, the NEC Group will be able to access new industrial markets and gain new customers within its existing markets.  Northern Frontier expects SAGD in the Alberta Oilsands region to be the highest growth area for industrial development in western Canada for the next five years.

Strong Board and Management Expertise

Northern Frontier's Board and proposed senior management have experience buying and building businesses similar to the NEC Group.  The Board believes that the addition of Chris Yellowega, an experienced public company operating executive, and Monty Balderston, an experienced financial executive with public company experience, along with the current slate of directors, will help facilitate the growth strategy and enhance the NEC Group's existing operating management team.  The experience and expertise of the NEC Shareholders will add to the strength of Northern Frontier's Board and the proposed management team as the NEC Shareholders will remain with Northern Frontier for periods of between one and three years after the closing of the Acquisition.

NEC Group Financial Summary

The following Exhibit 1.1 has been prepared by the NEC Group management and includes specific financial statement balances from the audited consolidated financial statements of Numberco for the twelve months ended December 31, 2012, the five months ended December 31, 2011, the twelve months ended July 31, 2011 and twelve months ended July 31, 2010 which were prepared in accordance with Canadian generally accepted accounting principles which are International Financial Reporting Standards ("IFRS") for the Corporation. The following financial information includes the accounts of both Numberco and NEC provided that NEC was incorporated on December 23, 2011, and financial statements prior to this date only represent the accounts of Numberco.

				Exhibit 1.1
$Cdn.		Year Ended December 31, 2012		Five Months Ended December 31, 2011		Year Ended July 31, 2011		Year Ended July 31, 2010
Revenue		42,596,121		13,923,892		29,115,138		13,693,485
Gross profit		8,894,432		2,845,287		6,081,606		1,827,655
Net profit (loss)		1,637,169		715,075		1,906,860		(1,053,876)
Total Assets		23,664,002		17,080,787		12,551,202		7,544,533
Total Liabilities		20,830,085		15,884,039		12,069,529		8,969,740

The following Exhibit 1.2 has been prepared by Northern Frontier to provide additional disclosure of non-GAAP measures. The pro forma Adjusted EBITDA reflects combining the NEC Group and CRC Carve-out Assets for the respective periods presented. Adjusted EBITDA is more fully explained later in this news release, under the section titled "Non-GAAP Measures".

				Exhibit 1.2
$Cdn.		Year Ended December 31, 2012		Five Months Ended December 31, 2011		Year Ended July 31, 2011		Year Ended July 31, 2010
Pro forma Adjusted EBITDA		11,161,367		3,165,627		7,516,219		2,688,776
% of revenue		26.2%		22.7%		25.8%		19.6%

The Acquisition

Under the Share Purchase Agreement, the Corporation and the Purchaser will acquire all of the issued and outstanding shares of Numberco on a cash-free, debt-free basis for an aggregate purchase price of approximately $32.7 million, prior to giving effect to certain closing adjustments.  The purchase price shall be paid to the NEC Shareholders through the issuance by the Corporation of $5.0 million of common shares in the capital of the Corporation at a deemed price per common share equal to the Offering Price, and the payment by the Purchaser of $27.7 million in cash (which amount includes the consideration payable upon the acquisition of certain real property which the NEC Group expects to purchase from the Province of Alberta prior to closing of the Acquisition and an expected post-closing purchase price adjustment of approximately $4.2 million).  Furthermore, the NEC Shareholders will receive a contingent payment of $2.0 million in cash payable by the Purchaser if the NEC Group achieves an Adjusted EBITDA of $13.5 million for the 2013 financial year.

Under the Asset Purchase Agreement, the Purchaser will acquire the CRC Carve-out Assets for an aggregate purchase price of $15.8 million in cash (includes an expected post-closing purchase price adjustment of approximately $0.8 million).

The Agreements contain customary representations and warranties of each of Northern Frontier, the Purchaser, the NEC Shareholders and CRC. Pursuant to the Agreements, the parties have agreed, among other things, to use commercially reasonable efforts to complete the transactions contemplated by the Agreements, to advise each other of material changes and to maintain their respective businesses and not take certain actions outside the ordinary course of business.

The Agreements contain customary mutual conditions precedent as well as a number of additional conditions precedent in favour of each of Northern Frontier, the NEC Shareholders and CRC. The Acquisition will not be consummated unless all such conditions are satisfied or waived by the party or parties for whose benefit such conditions exist, to the extent they may be capable of waiver.

The maximum aggregate liability of the NEC Shareholders for indemnification obligations under the Share Purchase Agreement and of CRC under the Asset Purchase Agreement is limited to the $5.0 million of common shares of the Corporation issued as partial consideration for the Numberco Shares, other than with respect to losses incurred as a result of fraud or willful misconduct or non-fulfillment of any covenant, or as a result of any incorrectness in or breach of any fundamental representation.  Such common shares represent the NEC Shareholders' (and CRC's) complete liability for any losses for which the Corporation and the Purchaser are entitled to recover under the Agreements.

The individual NEC Shareholders (being Colette Benson and Kevin Benson), along with Albert Benson, are all of the beneficial owners of both the NEC Group and CRC, and reside near Lac La Biche, Alberta. The non-individual NEC Shareholders are all legal entities incorporated or organized under the laws of the Province of Alberta and are controlled collectively by Colette, Kevin and Albert Benson.

Offering

Concurrent with, and as a condition to the obligations of the Corporation and the Purchaser to complete the Acquisition, the Corporation intends to complete the fully-marketed Offering of Subscription Receipts, and has engaged GMP Securities L.P. and Raymond James Ltd. as co-lead agents.  The Subscription Receipts will be priced in the context of the market and each subscription receipt will entitle the holder thereof to receive, without payment of additional consideration, one common share of the Corporation upon the completion of the Acquisition. The Corporation has engaged the Agents and will pay the Agents a cash commission of 6% of the aggregate gross proceeds raised in connection with the Offering.  The Corporation will also grant the Agents an Over-Allotment Option exercisable, in whole or in part, on the closing of the Offering and for a period of 30 days thereafter.  The net proceeds of the Offering will be used to fund the Acquisition.

Conditions Precedent to Completion of the Acquisition

Completion of the Acquisition is subject to a number of conditions, including but not limited to:

(a)	the conditional acceptance of the Exchange;
(b)	the Corporation having raised proceeds in the Offering or otherwise obtained financing sufficient to satisfy the Corporation's and the Purchaser's respective obligations in respect of the Acquisition;
(c)	the absence of any material adverse effect with respect to the NEC Group, the CRC Carve-out Assets or the Corporation; and
(d)	other customary conditions to closing.

Share Capital of the Corporation

The Corporation currently has 918,533 common shares issued and outstanding.

Proposed Board of Directors and Management

After completion of the Acquisition, the proposed Board of Directors of the Resulting Issuer will be comprised of nine directors: Bradford N. Creswell, John R. Jacobs, Trevor Haynes, Darin R. Coutu, Edward J. Redmond, Don Basnett, Darrell R. Peterson, Rob Hunt and Chris R. Yellowega. All of the Proposed Directors are current directors of the Corporation with the exception of Chris R. Yellowega.

The proposed senior officers of the Resulting Issuer appointed by the Board of Directors following completion of the Acquisition will include Chris R. Yellowega as President and Chief Executive Officer and Monty R. Balderston as Executive Vice President, Chief Financial Officer and Corporate Secretary.

The following is a background of each of the proposed directors and officers of the Resulting Issuer.

Chris R. Yellowega - Proposed Director, President and Chief Executive Officer

Mr. Yellowega will be appointed as the President and Chief Executive Officer and a director at the closing of the Acquisition.  Mr. Yellowega will fulfill his role as the President and Chief Executive Officer on a full-time basis.  Mr. Yellowega is an experienced senior executive and Professional Engineer.  He has 20 years of varied experience in engineering, operations, maintenance and senior management roles in the mining and energy industries.  Mr. Yellowega brings a depth of experience in operating and service markets in the target business areas for Northern Frontier and has a strong business focus on strategy, execution and cost.  From 2008 to 2012, Mr. Yellowega was Vice President, Construction and prior thereto Vice President, Operations with North American Energy Partners Inc. ("North American"), a provider of mining, heavy construction, industrial, piling and pipeline services in western Canada.  North American is listed on the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange ("TSX") under the trading symbol "NOA".  From 2005 to 2008, he was Vice President, Upstream with Synenco Energy Inc. ("Synenco"), a former Oilsands resource development company involved in the Northern Lights upstream mining and bitumen extraction project which was listed on the TSX.  Synenco was acquired by Total SA in 2008.  From 2000 to 2005, Mr. Yellowega was a senior manager with Shell's Oilsands group, involved with the Muskeg River Mine development for Albian Sands Energy Inc.

Mr. Yellowega graduated from the University of Alberta in 1993 with a Bachelor of Science degree in Mining Engineering.

Monty R. Balderston - Proposed Executive Vice President, Chief Financial Officer and Corporate Secretary

Mr. Balderston will be appointed as the Executive Vice President, Chief Financial Officer and Corporate Secretary at the closing of the Acquisition.  Mr. Balderston will fulfill his role as Executive Vice President, Chief Financial Officer and Corporate Secretary on a full-time basis.  Mr. Balderston is a Chartered Accountant with over 17 years of experience, including over 10 years in senior leadership roles with publicly traded companies.  From June 2011 to April 2012, he acted as Chief Financial Officer of Silica North Resources Ltd., a privately held start-up company focused on developing deposits and supplying proppant (frac sand) to the oil and natural gas industry.  From May 2003 to June 2011, Mr. Balderston held various senior financial roles including Chief Financial Officer from March 2008 to June 2011 of Peak Energy Services Ltd. ("Peak"), a diversified energy services company providing drilling and production services to its customers in both the conventional and unconventional oil and natural gas industry in western Canada and the United States, as well as the Oilsands regions of western Canada.  Peak was listed on the TSX until it was purchased by Clean Harbors Inc. in June 2011.  From May 2000 to July 2002, he held senior financial roles with International Properties Group Ltd., a real estate company, which was listed on the TSX until late 2002.  From September 1995 to April 2000, Mr. Balderston was with the accounting firm PricewaterhouseCoopers LLP and held various progressive finance related roles in both the audit and management consulting practices.

Mr. Balderston graduated from the Northern Alberta Institute of Technology with a Finance Diploma (with Honors) in 1991 and graduated from the University of Alberta with a Bachelor of Commerce degree (with Distinction) in 1995.  He earned his Chartered Accounting designation in the Province of Alberta in 1998.

Bradford N. Creswell - Proposed Director

Mr. Creswell is the President and has been a director of the Corporation since October 2011.  Mr. Creswell is a partner and co-founder of NCA Management LLC (formerly Northwest Capital Appreciation, Inc.) ("NCA"), a private equity firm which he co- founded in Seattle, Washington in 1992.  In 2006, a limited liability partnership organized by NCA acquired NC Services Group Ltd. ("NCSG"), an Edmonton, Alberta based crane and heavy haul company serving the refining, oil and natural gas and wind energy sectors in western Canada and the Northwestern United States.

Mr. Creswell currently serves on the board of directors of NCSG and is a member of the audit committee,  and on the board of directors of Warwick & Kent Holdings Ltd., a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry.  Mr. Creswell previously has served on the board of directors and audit and compensation committees of numerous private companies, and was Chief Financial Officer of Carson Products Corporation, a public, global manufacturer and marketer of hair care products listed on the NYSE.

Prior to founding NCA, from 1986-1992, Mr. Creswell was a Vice President in the Corporate Finance and Investment Banking Group of Bankers Trust Company in New York.

Mr. Creswell earned a Bachelor of Arts degree in Business Administration from the University of Puget Sound in 1982.  Mr. Creswell began his career as a Certified Public Accountant with Arthur Young & Company in Denver, Colorado.  After practicing for three years he attended business school at The Amos Tuck School of Business at Dartmouth where he earned a Masters of Business Administration degree in 1987.

On closing of the Acquisition, Ms. Creswell will resign as an officer but will remain as a director of the Corporation.

John R. Jacobs - Proposed Director

Mr. Jacobs is the Chief Executive Officer and has been a director of the Corporation since October 2011.  Mr. Jacobs is also a partner with NCA.  At NCA, Mr. Jacobs is involved with the Corporation's organization activities and serves on the board of directors of NCSG.  Mr. Jacobs is a member of the board of directors of Warwick & Kent Holdings Ltd., a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry.  Mr. Jacobs previously has served on the board of directors of numerous private companies, and was a board member and the chair of the compensation committee and member of the audit committee of Fuel Systems Solutions, Inc., a NASDAQ listed public company, between 2004 and 2007.

Prior to joining NCA, Mr. Jacobs spent 23 years in investment banking and commercial banking in New York and Seattle.  For more than 15 years, Mr. Jacobs worked for Piper Jaffray & Co. ("Piper Jaffray"), a U.S. New York Stock Exchange publicly listed investment banking firm.  For more than 10 years, Mr. Jacobs led Piper Jaffray's Seattle-based investment banking practice and founded the firm's global technology practice.  Prior to joining Piper Jaffray, Mr. Jacobs worked for The Chase Manhattan bank in New York City where he worked with the commercial bank, as well as the investment bank.

Mr. Jacobs graduated with honors from Ohio Wesleyan University with a Bachelor of Arts degree in 1976 in addition to earning his Masters of International Management degree from the Thunderbird School of Global Management in 1981.

On closing of the Acquisition, Mr. Jacobs will resign as an officer but will remain as a director of the Corporation.

Trevor Haynes - Proposed Chairman and Director

Mr. Haynes is the Chairman and a director of the Corporation. From 2003 to present, Mr. Haynes has served as the President, Chief Executive Officer and a director of Black Diamond Group Limited, a modular building, remote lodging and energy services company headquartered in Calgary, Alberta listed on the TSX.  From February 2007 to October 2009, Mr. Haynes was also a director of Aqueous Capital Corp., a former capital pool company listed on the TSXV.  From January 2003 to May 2005, he was the President and Chief Executive Officer of Kettleby Investment Management, a private holding company involved in construction and real estate development.  From February 1992 to December 2002, he held various positions of increasing responsibility with ATCO Structures & Logistics Ltd., a company that at the time was primarily involved in modular structures and remote accomodations.  Mr. Haynes is currently a director of NCSG, Petroleum Services Association of Canada and The Fig Tree Foundation.

Mr. Haynes graduated from the University of Toronto with a Bachelor of Arts degree in 1991.

Don Basnett - Proposed Director

Mr. Basnett is a director of the Corporation.  Mr. Basnett has over 38 years of experience in providing electrical/instrumentation maintenance and construction services during his tenure as the President and Chief Executive Officer of Pyramid Corporation, a privately-owned company, offering products and services to companies in the petroleum, petrochemical, mining, wood products, agricultural and industrial sectors.  Mr. Basnett currently serves as a member of the board of directors of NCSG and of Warwick & Kent Holdings Ltd., a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry.

Darin R. Coutu - Proposed Director

Mr. Coutu is a director of the Corporation.  Mr. Coutu is a chartered accountant with over 22 years experience, including nine years in senior leadership roles with publicly traded companies.  Currently, Mr. Coutu is the Chief Financial Officer for NCSG, an Edmonton, Alberta-based crane and heavy haul company serving the refining, oil and natural gas and wind energy sectors in western Canada and the Northwestern United States. NCSG owns and operates Northern Crane, Mullen Crane & Transport and TransTech a heavy haul trucking company. From October 2007 to December 2010, Mr. Coutu acted as Chief Financial Officer of ZCL Composites Inc., a designer, manufacturer and supplier of cost-effective fiberglass tank systems to the petroleum industry, which trades on the TSX under the symbol "ZCL".  From July 2005 to October 2007, he served as the Chief Financial Officer of Rentcash Inc., a provider of alternative financial products and services.  Mr. Coutu also held the position of Chief Accountant with Canadian Western Bank from January 2003 to July 2005 and was with the accounting firm of KPMG LLP from December 2000 to December 2002 as a Senior Principal with the firm.

Mr. Coutu graduated from the University of Alberta with a Bachelor of Commerce degree in 1989 and also earned his Chartered Accountant designation in the Province of Alberta in 1992.  Mr. Coutu has also served as director of non-for-profit organizations, including Junior Achievement.

Rob Hunt - Proposed Director

Mr. Hunt is a director of the Corporation.  Mr. Hunt is a retired business executive with over 33 years experience in management, senior leadership roles and strategy development with both private and public resource companies in Canada and the United States.  He is currently a director of Northwestel, a wholly-owned subsidiary of Bell Canada.  Mr. Hunt is also a director and chairman of Golconda Resources Ltd.  and sits on a number of advisory boards for private companies.  Prior to retiring at the end of 2008, Mr. Hunt was the President of Horizon North Logistics Inc., a remote resource development service company that provides workforce accommodation solutions, camp management and catering services, and road and access matting solutions.  From 1988 to 2006, he was the Senior Vice President of Akita Drilling Ltd.

Darrell R. Peterson, Proposed Director

Mr. Peterson is a director of the Corporation.  He is a Partner with Bennett Jones LLP, an international business law firm specializing in energy and corporate law.  Mr. Peterson's practice is focused on corporate and securities law, with a specialization in mergers and acquisitions, corporate reorganizations and public and private financings.  His practice involves acting for public and private issuers, private equity participants and institutional investors.  He also advises issuers on the structuring and implementation of corporate governance practices.

Mr. Peterson has a Bachelor of Law degree from Queens University, a Master of Science and Bachelor of Science degrees from the University of Alberta, and an ICD.D designation from the Institute of Corporate Directors.  He also serves as Corporate Secretary for several publicly listed issuers and as a director of a number of private companies.

Edward J. Redmond - Proposed Director

Mr. Redmond is a director of the Corporation.  Mr. Redmond is the President and Chief Executive Officer and a director of NCSG, an Edmonton, Alberta-based crane and heavy haul company serving the refining, oil and natural gas and wind energy sectors in western Canada and the Northwestern United States.  NCSG owns and operates Northern Crane, Mullen Crane & Transport and TransTech a heavy haul trucking company.  Mr. Redmond has more than 25 years of operating, transactional and business advisory experience in the Crane, Transportation, Energy, and Utilities industries.

For the last 14 years, Mr. Redmond has held senior leadership roles including as the President, Chief Executive Officer, and Executive Vice President for a number of private and public organizations including: (i) Executive Vice-President of the Energy Products and Services Segment of McCoy Corporation, a company listed on the TSX that provides equipment and services to the upstream oil and natural gas industry, from November 2006 to August 2010; (ii) investment banking partner specializing in turnaround management and sell-side mergers and acquisitions for Kirchner & Company, a private company focused on providing advice to the private equity owners of businesses looking to improve and/or sell the businesses they owned, from September 2004 through November 2006; (iii) Chief Executive Officer of Lacent Technologies, a private company that designed, manufactured and sold laser cutting equipment for the automotive and garment industries, from March 2003 to September 2004 taking the company through a sale process and selling to Lectra S.A. based in France; and (iv) President of Surface Engineered Products, a private company that designed and provided specialized coatings for petrochemical companies and other industries, from January 1997 through March 2003.

Mr. Redmond obtained a Master of Business Administration degree from the Stanford Business School in 1990, a Master of Science degree in Engineering from the University of Toronto in 1985 and a Bachelor of Science degree in Engineering from the University of Alberta in 1983.

Arm's Length Transaction

The Acquisition will be an arm's length transaction as none of the directors, officers or insiders of the Corporation own any securities of the NEC Group or CRC.  The Acquisition will not be subject to approval of the shareholders of the Corporation.

Regulatory Matters

The Corporation will apply for an exemption from sponsorship requirements pursuant to Exchange Policy 2.2 - Sponsorship and Sponsorship Requirements. There is no assurance, however, that it will obtain this exemption. Trading in the Common Shares will remain halted until such time as the Exchange has received the documentation required by Policy 2.4 - Capital Pool Companies.

Completion of the Acquisition is subject to a number of conditions including, but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Prospectus of the Corporation, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this news release.

Non-GAAP Measures

Adjusted EBITDA

"Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation and amortization and other specific expenses and exclusive of the charges paid to CRC for the rental of the CRC Carve-out Assets net of associated costs incurred by CRC related to these assets. Adjusted EBITDA is a supplemental non-GAAP financial measure that is not recognized under IFRS and does not have a standardized meaning prescribed by IFRS.  Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net profit and comprehensive income or cash flows from operating activities as determined in accordance with IFRS or as an indicator of operating performance or liquidity.  Management believes that Adjusted EBITDA is a useful supplemental measure as it provides an indication of the results generated by the principal business activities after considering CRC's related party relationship with the NEC Group and prior to consideration of how these activities are financed or how the results are taxed in various jurisdictions.  The computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies, and accordingly Adjusted EBITDA may not be comparable to measures used by other companies.

Forward Looking Information

This news release includes certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These statements are made as of the date of this news release and the Corporation does not undertake to publicly update these forward-looking statements except in accordance with applicable securities laws. These forward-looking statements include, among other things:

• completion of the Acquisition and the Offering;
• use of net proceeds from the Offering;
• completion of the Credit Facility as proposed or at all;
• anticipated benefits of completing the Acquisition and the Offering;
• terms and conditions of the Acquisition; and
• the description of the Resulting Issuer following completion of the Acquisition, including composition of management of the Resulting Issuer.

These statements are only predictions and are based on current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In making such forward-looking statements, assumptions have been made regarding, among other things, industry activity, marketability of the services of the NEC Group, the state of financial markets, business conditions, continued availability of capital and financing, future oil and natural gas prices and the ability of the Corporation to obtain necessary regulatory approvals. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These risks and uncertainties include: the possibility that the parties will not proceed with the Acquisition and the Offering, that the ultimate terms of the Acquisition and the Offering will differ from those that are currently contemplated, that the Acquisition and Offering will not be successfully completed for any reason (including the failure to obtain the required approvals from regulatory authorities) and regulatory changes. Investors are cautioned that forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Corporation, investors should review the Corporation's continuous disclosure filings that are available at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

 

SOURCE Northern Frontier Corp.

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