Global Green Matrix (GGX) has signed a letter of intent (LOI) to acquire Westcan Solutions, which is the sole holder of all shares of Chemicals by Sterling.
GGX said it will purchase all of Westcan's issued and outstanding shares at an aggregate purchase share price of $2,033,000, payable as $10,000 cash, the repayment of debt in the amount of $33,000 and the issuance of 12,437,500 common shares of GGX at a deemed price of $0.16 a share.
Chemicals by Sterling provides a line of custom blended and commodity chemicals to Western Canadian petroleum and natural gas exploration, development and production companies.
Randy Hayward, Global Green Matrix president and CEO, said: "With the proposed acquisition of Chemicals by Sterling, GGX would obtain a profitable, revenue producing business that has synergies with our goals for growth in the oil and gas waste and rental service industry."
Darryl Scase, Chemicals by Sterling chairman, said the prospect of joining GGX reinforces the company's strategy to develop strong brands and maximise the potential of its distribution within the oil and gas industry.
"The experienced management team at GGX have obtained the rights for Canada to three different proven technologies for the oil and gas industry," Scase said. "The combined assets of both partners provide safe, environmentally friendly processes that will create long term value for our shareholders."
The proposed acquisition will be completed following the satisfaction of various conditions, including the negotiation and execution of a definitive agreement, as well as completion of GGX's due diligence investigations.
For the acquisition, both companies have to receive all required regulatory approvals, including the approval of the TSX Venture Exchange.