Shawcor announces plans to expand its manufacturing capabilities in the GTA
by CM Staff
Shawcor has received a Letter of Intent 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.
TORONTO — Shawcor Ltd. announced its plan to expand and modernize its manufacturing capabilities in the Greater Toronto Area. Shawcor has received a Letter of Intent 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.