Atlas Engineered Products Ltd (CVE:AEP) (OTCMKTS:APEUF) revealed on Monday that the company has struck an agreement with ZyTech Building Systems LP to acquire the bulk of ZyTech's manufacturing assets from its former Langley location in the Lower Mainland of British Columbia.
The Canadian engineering company, which specializes in the manufacture and supply of roof trusses and wood products, said the acquisition was in line with its goal of rapid expansion in British Columbia.
The equipment purchase is expected to close on January 31, 2021, at a price of $958,160, which is below replacement or market value, according to Atlas Engineered. The company paid ZyTech a deposit of $100,000 on execution of the agreement and may take possession of the equipment prior to closing.
"Last year, we increased our footprint in British Columbia by expanding into the Lower Mainland through Novum Building Components Ltd and by adding a pre-manufactured wall plant at our Atlas Building Systems operations in Nanaimo on Vancouver Island,” Atlas Engineered Products CEO Dirk Maritz said in a statement.
“Now with this asset purchase from Zytech, we are adding advanced technology equipment to our business, and it will improve our profitability at several locations," he added.
Maritz noted that during 2020, the British Columbia construction industry experienced “minimal impact,” which made the expansion of the company’s British Columbia operations “a priority.”
“ZyTech's decision to focus on its Alberta and US assets marks the departure of a local industry competitor and also yields an opportunity to bolster our Vancouver Island and Lower Mainland facilities,” added Maritz.
“These equipment additions are anticipated to result in significant increases in efficiency and strengthen our position as a full-service solutions provider. We have worked exceptionally hard to position ourselves in this way and are proud to be offering a full and expanded range of products including pre-manufactured wall-panels, manufactured floor trusses, I-joists, LVL options, open web floors, roof trusses and other engineered wood products to the very large and buoyant BC market."
ZyTech’s equipment will be installed at the group’s Novum and Atlas Building Systems locations in the first quarter of 2021, ready for the peak building season. In addition to acquiring the equipment, Atlas Engineered will be “completing several supply contracts” for ZyTech’s clients, noted the company.
"Along with our new banking and financing deal that was previously announced, this equipment acquisition positions us to start 2021 with a significant next step in our organic growth plan," said Atlas Engineered interim CFO Melissa MacRae.
"In the high-growth BC market, it is a priority to drive our organic growth initiatives because it is inexpensive and value-adding. With our focus on efficiencies, productivity, economies-of-scale, and buying power optimization, we are confident we can deliver on our growth and profitability targets."
Atlas Engineered Products is a growth company that acquires and operates profitable operations in Canada's truss and engineered products industry.
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