Elevate enters LOI to acquire electrical business

Executive Summary

• Elevate Service Group Inc. has entered into a letter of intent to acquire an Ontario-based specialized electrical contractor.
• The transaction values the target at approximately $1.5 million, structured as $1.2 million in common shares and $300,000 in cash.
• The acquisition aims to expand Elevate's facilities management capabilities by adding skilled trades, recurring revenue streams, and a regional operations hub.

Key Details

• Transaction Structure: The total consideration is approximately $1.5 million, consisting of $1.2 million in Elevate common shares (calculated using an average trading price prior to closing) and $300,000 in cash.
• Share Terms: The Elevate shares issued to the vendor are subject to a two-year lock-up period.
• Vendor Role: The vendor will join Elevate in an operational leadership role under a new employment agreement.
• Target Profile: The target is a specialized electrical contractor with a portfolio of recurring service contracts across Kitchener/Waterloo, Guelph, London, and the western Greater Toronto Area, serving the food processing and manufacturing sectors.
• Financial Metrics (Target):
  • Historical annual revenue: $3.2 million to $3.5 million.
  • Current fiscal year (ending Jan. 31, 2026) revenue forecast: Exceeds $4 million.
  • Current fiscal year EBITDA margin forecast: Approximately 16% to 18%.
  • All financial information is unaudited.
• Strategic Rationale:
  • Revenue Growth: Adds a high-quality book of repeat customers and service orders for cross-selling opportunities.
  • Operational Efficiency: Licensed electricians reduce reliance on regional subcontractors, driving technician internalization.
  • Infrastructure: The target's facility will serve as a new regional operations hub for inventory and parts storage, reducing travel time and improving margins.
• Closing Timeline: The transaction is anticipated to close in December 2025, subject to customary conditions and regulatory approvals.