Atlas Engineered Products Enters into Definitive Agreement to Acquire Tandelle-Pacer and Announces Non-Brokered Private Placement Financing for up to $5 Million

Company Press Release

Atlas Engineered Products Ltd. (“Atlas” or the “Company”), a leading supplier of trusses, engineered wood products and building components, is pleased to announce that it has entered into a definitive agreement to purchase all of the issued and outstanding shares of Tandelle Specialty Inc. and Pacer Building Components Inc. (“Tandelle-Pacer”) of Ilderton, Ontario.

Tandelle-Pacer’s revenues for the fiscal year ended October 31, 2017 were approximately $14.4 million with adjusted EBITDA of $1.9 million. To acquire Tandelle-Pacer, Atlas has agreed to pay $8.6 million on closing, based on Tandelle-Pacer having a targeted net working capital of $2,280,938 on closing. Subject to adjustments based on Tandelle-Pacer’s actual net working capital at closing, the purchase price is expected to consist of $500,000 in Atlas common shares, and $8.1 million in cash. Closing of the acquisition, which is expected to occur on or before October 31, 2018, is subject to standard closing conditions, including the satisfactory completion of Atlas’ due diligence investigations and remains subject to the approval of the TSX Venture Exchange.

On closing, Tandelle-Pacer’s CEO and President Dave Howard will be invited to join the Board of Directors of Atlas.

Mr. Guy Champagne, President of Atlas stated, “The Tandelle-Pacer acquisition is expected to be a key transaction for Atlas that gives us a huge strategic advantage in a market in which we are already invested. We will be acquiring an established truss, engineered beam and wall and floor panel business with room to expand operations with ease, a very experienced management team to look after our other sites in Ontario, a large solid and growing customer base in the Greater Toronto area, and entry into the Detroit, Buffalo and Rochester markets.”

Non-Brokered Private Placement Financing

Atlas is also pleased to announce a private placement financing to raise up to $5 million (the “Offering”). The Offering will be non-brokered and consist of up to 12,500,000 shares at a price of $0.40 per share.

The net proceeds of the Offering will be used for acquisition purposes, general working capital and partially applied to the acquisition of Tandelle-Pacer.

Closing of the Offering is subject to receipt of all necessary approvals, including the approval of the TSX Venture Exchange and definitive subscriptions. All shares issued under the private placement will be subject to a four-month hold period from the closing date, in accordance with applicable Canadian securities laws.

This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including the United States of America. The securities being offered as part of the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and any applicable state securities laws, or pursuant to available exemptions therefrom.

About Tandelle-Pacer

Established in 1998, Tandelle-Pacer is an industry leader in engineered wood components. Tandelle-Pacer specializes in the design and pre-fabrication of engineered floor joists, floor panels, wall panels and roof trusses. Tandelle-Pacer operates from an 80,000 square foot manufacturing facility on 24 acres of land located in the village of Ilderton, just north of London, Ontario.

About Atlas Engineered Products

Atlas Engineered Products Ltd. is a leading supplier of trusses and engineered wood products. Atlas was formed over 18 years ago and operates manufacturing and distribution facilities in British Columbia, Ontario and Alberta to meet the needs of residential and commercial builders. Atlas has expert design and engineering teams, multiple-shift state-of-the-art truss manufacturing operations, and large inventories of engineered beam and flooring components. Atlas aims to grow its base of business across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas will bring its construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying them with the full array of components and assemblies they might require for their projects – from design to lockup.

Contact:

Guy Champagne – President – info@atlasep.ca – (250) 754-1400

Source: Atlas Engineered Products Ltd.