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Semcan Inc.: Semcan Inc. Announces Completion of Sale of Enviro-Pro-Tech, Inc.

^{Published on 2009-08-31 15:18:55 - Market Wire}
 

TORONTO, ONTARIO--(Marketwire - Aug. 31, 2009) - Semcan Inc. (TSX VENTURE:STT) ("Semcan" or the "Company") announced today that on 28th August 2009 it entered into a binding Share Purchase Agreement with U.S. O'Neill Industries, LLC under which the Company agreed to sell its interest in Enviro-Pro-Tech, Inc., a soil remediation company based in Pensacola, Florida. The transaction closed on 31st August 2009. The purchase price was US$1,675,000, subject to an adjustment for book value to be calculated within thirty days. The purchaser paid $1,375,000 at closing and issued promissory notes of $300,000, of which $100,000 is due October 31, 2009 and $200,000 is due May 31, 2010, subject to potential partial adjustments relating to staff turnover, bad debts and earnings. The net proceeds, after commissions paid to selling broker Gibson and Associates, Inc. of Pensacola, have been used to repay term debt.

Commenting on the transaction, Philip Jamieson, the Company's Chairman & CEO said, "While we are disappointed that current business conditions have required us to make this divestiture, we are pleased that the closing of the transaction has allowed the Company to pay down another significant portion of our term debt. The closing of this transaction represents a significant step in the Company's plan to reduce debt and to focus on its core North American Environmental Engineering business. My thanks to the employees of Enviro-Pro for their hard work and continued dedication to the business as we have worked toward the completion of this transaction over the past several months."

About Semcan Inc.

Semcan is a worldwide supplier of industrial processes and environmental solutions with specific emphasis on water remediation and emission control systems.

Forward-Looking Statement Disclaimer

Caution Regarding Forward-Looking Information and Non-GAAP Measures

This news release contains certain forward-looking statements. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of Semcan. In particular, statements regarding the future operating results and economic performance are forward-looking statements. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at [ www.sedar.com ]. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of Semcan considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of Semcan nor its directors assumes any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Non-GAAP Measures

The term "EBITDA" is a financial measure used in this document which is not a standard measure under Canadian generally accepted accounting principles. Semcan's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, Semcan's measure of EBITDA, as presented in this press release, may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings determined in accordance with generally accepted accounting principles, before depreciation and amortization, interest expense, and income tax expense. Management believes that EBITDA is a useful supplemental measure of cash available for debt service, working capital, capital expenditures, income taxes, and distribution. Investors are cautioned that EBITDA, as a non-GAAP measure, is not an alternative to measures under GAAP and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release.