Cervus Also Signs MOU to Acquire the Remaining Shares of Agriturf Limited
Cervus Equipment Corporation today announced that it has entered into Purchase and Sales Agreements (PSAs) with Bayquip Agricultural Limited and Fieldpower Northland Limited to acquire a total of five John Deere dealership branches in New Zealand. Cervus also announced that it has signed a memorandum of understanding (MOU) to acquire all of the remaining shares of Agriturf Limited that it does not already own.
“Cervus continues to see improvement in Agriturf’s operations and is confident in its ability to generate value,” said Graham Drake, President and CEO of Cervus Equipment Corporation. “We intend to acquire the remaining interest in
Agriturf to optimize Cervus’ New Zealand operations, especially given our plans for further growth in the region via the acquisition of five authorized John Deere dealership branches.”
Cervus expects the acquisition of Bayquip, Fieldpower and the remaining shares in Agriturf to close in the third quarter of 2012. If all three acquisitions are completed, it is anticipated that the aggregate purchase price will be approximately $4.9 million payable as to approximately $2.4 million in cash and approximately $2.5 million in common shares of Cervus.
Under the terms of the Bayquip PSA, Cervus will purchase the business assets of Bayquip, including three John Deere dealership branches located in Gisborne, Te Puke and Tauranga, paid in cash and common shares of Cervus. The value of the common shares of Cervus to be issued in partial satisfaction of the purchase price will be based on the weighted average trading price of the common shares of Cervus Equipment Corporation in the 10 days prior to an agreed upon date prior to the completion date of the acquisition.
Bayquip owns three John Deere dealership branches that sell new and used grounds care parts and equipment as well as offer equipment servicing. The Tauranga branch offers a full range of John Deere grounds care products including residential ride on mowers, commercial mowing equipment and utility vehicles. The Gisborne and Te Puke branches specialize in turf products, agricultural tractors and equipment, and service and parts.
Under the terms of the Fieldpower PSA, Cervus will purchase, for cash, the business assets of Fieldpower, including two John Deere dealership branches located in Whangarei and Waipapa.
Fieldpower owns two John Deere dealerships that sell new and used agricultural, turf and home equipment as well as offer equipment parts and servicing.
Agriturf Share Purchase
Under the terms of the Agriturf MOU, Cervus will buy the remaining 141,115 shares of Agriturf, with the price per share based on the adjusted equity of Agriturf Limited at March 31, 2012. The share purchase will be payable via the issuance of common shares of Cervus Equipment Corporation, with a price per share based on the weighted average trading price of Cervus’ common shares in the 10 days prior to an agreed upon date prior to the completion date of the acquisition. Once the transaction is complete, Agriturf would be whollyâ€?owned by Cervus and will operate under the Cervus name.
Agriturf Limited is a New Zealand Corporation that carries on business on the north island of New Zealand, offering authorized John Deere agricultural and turf equipment, parts and service in six locations in the Manawatu, Rotorua, Hawke's Bay and Taranaki regions. Cervus Equipment Corporation currently owns 60.3% of the outstanding shares of Agriturf Limited.
The purchase is subject to, among other things, the completion of due diligence activities. There can be no assurance that these conditions precedent, or any other conditions precedent, will be satisfied. Further, there can be no assurance that the proposed transaction will be completed as proposed or at all. Cervus anticipates closing of the proposed transactions in the third quarter of 2012, assuming all agreements and approvals are in place.
Cervus acquires and manages authorized agricultural, commercial, industrial and transportation equipment dealerships with interests in 52 dealerships located in Western Canada, New Zealand and Australia. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick, Nissan and Doosan material handling equipment; and Peterbilt transportation equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL".