Tornado Completes Strategic Acquisition of CustomVac and Amends TD Credit Facility

Core Viewpoint - The acquisition of Custom Vacuum Services Ltd. by Tornado Infrastructure Equipment Ltd. is a strategic move aimed at expanding Tornado's presence in the infrastructure equipment sector and enhancing its product portfolio [2][6][23]. Acquisition Details - Tornado has acquired all issued and outstanding shares of CustomVac for an aggregate purchase price of $28,000,000, paid in cash [1]. - CustomVac specializes in manufacturing and servicing truck-mounted and semi-trailer mounted vacuum equipment for various sectors in Canada [1][8]. - The acquisition is classified as an "Exempt Transaction" under TSX Venture Exchange Policy 5.3, with no finders' fees involved [5]. Strategic Importance - The acquisition is part of Tornado's broader strategy to identify and acquire high-quality businesses that complement its existing offerings [2][3]. - CustomVac's strong market presence in Western Canada, combined with Tornado's North American sales channels, is expected to drive immediate growth and cost efficiencies [6][23]. - The in-house manufacturing capabilities of CustomVac will allow Tornado to localize production of key components, improving speed and cost-effectiveness [6][23]. Financial Aspects - CustomVac's unaudited trailing 12-month gross profit was reported at $9,580,000, with total assets of $11,592,000 as of January 31, 2025 [9]. - The acquisition is expected to be profitable and immediately accretive to Tornado [9][23]. - Tornado entered the transaction with modest existing debt and plans to utilize a combination of cash on hand and a new term loan to fund the acquisition [7][11]. Financing Structure - Tornado has amended its TD Facility, which includes a new $25,000,000 term loan to partially finance the acquisition [11][12]. - The Operating Line has been increased from $6,000,000 to a maximum of $8,000,000, providing additional working capital for the growing business [13][15]. - The TD Facility is secured by a first-ranking security interest in all present and future assets of the Company and its subsidiaries [15].