The purchase price of $1,654,290 (AUS$1,627,758 at $1.0163 Canadian per Australian dollar) was paid via the issuance of 67,483 common shares of Cervus at a deemed price of $22.59 per share and $129,840 cash (AUS$127,758 at 1.0163 Canadian per Australian dollar). Cervus also announced that it has acquired Western Farm Service Pty Ltd., a John Deere dealership located in Melbourne for a purchase price of $4,277,300 (AUS$4,205,000), subject to final closing adjustments.
"Cervus established operations in Australia in July of 2012 to pursue opportunities in new markets and we have gradually increased our ownership interest to support successful integration," said Graham Drake, president and CEO of Cervus. "With six wholly-owned stores in Australia, Cervus is establishing itself as a highly-regarded agricultural dealership operator and positioning the company for further growth in the region."
The common shares will vest and be fully transferred to the vendor on each of the first, second and third anniversaries of the closing date.
In connection with the acquisition, Cervus also assumed a shareholder loan of Windmill in the amount of $3,223,950 (AUS$3,172,242 at $1.0163 Canadian per Australian dollar). The vendor then used $1,524,450 (AUS$1,500,000 at $1.0163 Canadian per Australian dollar) of the proceeds from the repayment of that loan to subscribe for 67,483 common shares of Cervus at a deemed price of $22.59 per share.
Windmill AG Pty Ltd. and Western Farm Service Pty Ltd. are John Deere agricultural dealers operating out of five and one location, respectively, in the state of Victoria, Australia. The average revenue for the six locations over the last three years was approximately $67.3 million. Each dealership offers new and used whole goods, parts, and services.