Elevate Service Group Inc Announces Letter of Intent for the Strategic Acquisition of a Security Solutions Provider

Executive Summary

• Elevate Service Group Inc. announced a non‑binding letter of intent to acquire an Ontario‑based security solutions provider for approximately $3.5 million.
• The deal will introduce a new security services line, add ~\$4 million of revenue (≈25% YoY growth) and bring recurring monitoring/hosting revenue of about \$1.4 million with low churn.
• Consideration includes a mix of Elevate common shares, cash payments at closing and one‑year anniversary, and a subordinated promissory note convertible into shares; the transaction is expected to close in December 2025 pending approvals.

Key Details

• Target Business: Ontario security solutions provider offering site assessments, system installations, access control, video surveillance, gate automation, intercom, and remote hosting for commercial property managers, retailers, restaurants, etc.
• Transaction Value: Approx. $3.5 million comprised of:
• $1.0 M in Elevate common shares (average price formula prior to closing)
• $0.5 M cash at closing
• $0.5 M cash on the 12‑month anniversary of closing
• $1.5 M subordinated promissory note (interest: 2% Y1, 3% Y2, 4% Y3) convertible into Elevate common shares at a 10 % discount upon maturity
• Share Lock‑up: Shares issued to the vendor will be subject to a four‑year phased lock‑up.
• Vendor Role: Expected to join Elevate in an operational leadership capacity under a new employment agreement.
• Strategic Rationale:
• Service Expansion: Adds a security solutions division, enabling cross‑selling and a more comprehensive suite of mission‑critical services.
• Revenue Growth & Diversification: Introduces ~\$1.4 M recurring monitoring/hosting revenue with low churn; overall target revenue projected >\$4 M for the current fiscal year (≈25 % YoY growth).
• Operational Synergies: Integration of technicians into Elevate’s platform to improve response times, internalize services, and achieve scale efficiencies.
• Financial Outlook for Target (FY2025 – unaudited):
• Revenue: >\$4 M (≈25 % increase YoY)
• EBITDA margin: 13 %–15 %
• Closing Timeline: Anticipated December 2025, subject to customary closing conditions and regulatory approvals.

Notable Quotes

(No direct quotes were provided in the release.)