Raydan Manufacturing Inc. announced that it has signed a letter of intent to purchase two profitable Ontario-based firms consisting of a chassis modification center and a heavy truck parts and service business with approximately $6 million in revenue.
"Raydan's primary source of revenue is the vocational truck market," stated Ray English President and CEO. "This acquisition is in line with our strategy to gain access to the Ontario marketplace, the gateway to the North American truck and heavy equipment industry. Purchasing an existing company provides us with important customer contacts and valuable management and staff familiar with the area and its needs. It also works well with our efforts to mitigate the effect of currency fluctuations, as it increases our Canadian dollar revenue generating potential."
The total purchase price of the transaction is approximately $2.3 million and will be finalized pending completion of due diligence by Raydan. Raydan will fund the acquisition through the issuance of a combination of $620,000 in vendor financing bearing interest at 7% over four years, $1,000,000 in cash from Raydan's current cash balance and 767,494 common treasurer shares based on the past 20 day trading average. Purchase price adjustments will be made to the VTB. The acquisition is scheduled to close March 31, 2006 and is subject to receiving all board and exchange approvals.