Shawcor Expands Growth Strategy in Automotive and Industrial Segment and Provides Business Update
29 November 2021 - 12:30PM
Shawcor Ltd. (“Shawcor” or the “Company”) (TSX: SCL) today
announced its plan to expand and modernize its manufacturing
capabilities in the Greater Toronto Area. Shawcor has received a
Letter of Intent (“LOI”) from a third party to purchase its Rexdale
property in Toronto, ON and is in the process of negotiating a
definitive purchase and leaseback agreement that is expected to
generate net proceeds in excess of C$45 million. Pursuant to the
LOI, the Company would be required to enter into a three-year
leaseback arrangement for the Rexdale property to facilitate
operational continuity while ultimately moving to a modernized
location. Proceeds from the property sale will be used to reduce
existing indebtedness. The sale and leaseback of the Rexdale
facility remains subject to normal conditions for a transaction of
this type and is expected to close during the first half of 2022.
"Demand for our products continues to accelerate
in the Automotive and Industrial segment as the efforts to
electrify our society advance,” said Mike Reeves, President and CEO
of Shawcor. “To meet this demand and provide new technology
solutions to our customers, a new facility is required. This move
will allow us to establish a greener, more modern and efficient
production facility in the region, while retaining our existing
employee base and our customers. The new facility will enable us to
increase our product portfolio and capacity, both organically and
through acquisitions.”
The Company also announced the sale of its
Guardian Mexico entity and the closure of its CSI Services entity
in Western Canada, which in combination accounted for roughly C$8.6
million of revenue and C$0.4 million of EBITDA in the last twelve
months, as at September 30, 2021. These actions serve to narrow
Shawcor’s focus to those businesses that are best positioned to
benefit from favourable long-term macro trends.
About Shawcor
Shawcor Ltd. is a growth-oriented, global
material sciences company serving the Infrastructure, Energy, and
Transportation markets. The Company operates through a network of
fixed and mobile manufacturing and service facilities. Its three
business segments, Composite Systems, Automotive & Industrial
and Pipeline & Pipe Services enable responsible renewal and
enhancement of critical infrastructure while lowering risk and
environmental impact.
For further information, please contact:
Meghan MacEachernExternal Communications & ESG,
DirectorTelephone: 437.341.1848Email:
meghan.maceachern@shawcor.comshawcor.com
Forward looking information - This news release contains
forward-looking information within the meaning of applicable
securities laws. Words such as "may", "will", "should",
"anticipate", "plan", "expect", "believe", "predict", "estimate" or
similar terminology are used to identify forward-looking
information. This forward-looking information is based on
assumptions, estimates and analysis made in the light of the
Company's experience and its perception of trends, current
conditions and expected developments, as well as other factors that
are believed by the Company to be reasonable and relevant in the
circumstances. Forward-looking information involves known and
unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to be materially
different from those predicted, expressed or implied by the
forward-looking information. The forward-looking information is
provided as of the date of this news release and the Company does
not assume any obligation to update or revise the forward-looking
information to reflect new events or circumstances, except as
required by law.
Source: Shawcor Ltd.
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