Aveda Transportation & Energy Services Updates Details of Acquisition of Competitor Hodges Trucking - Video News Alert on InvestmentPitch.com

Vancouver, British Columbia--(Newsfile Corp. - June 19, 2015) - Aveda Transportation and Energy Services (TSXV: AVE) recently announced the acquisition of Hodges Trucking, a subsidiary of NYSE listed Seventy Seven Energy. Aveda, already a leading provider of oilfield hauling services and equipment rentals to the energy industry, increased its footprint in this industry, through the acquisition of its largest competitor in the United States.

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The move by Seventy Seven Energy to sell Hodges Trucking, a non-core asset, allowed Aveda to close an acquisition that will be talked about in the oil patch for some time.

At the closing, Aveda paid US$42 million, with US$15 million financed through Aveda's existing senior credit facility, and the balance of US$27 million financed by the seller with a 5 year note bearing interest at 9%, with no requirement for early repayment. The note is secured by a 2nd lien on Aveda's fixed assets and accounts receivable.

Through the acquisition, Aveda acquired US$17.5 million of working capital and approximately 900 pieces of rig moving and heavy haul equipment. Subsequent to the closing, Aveda sold approximately 350 pieces of Hodges' non-oilfield equipment for approximately US$22 million, recovering more than 52% of its initial investment. This equipment sale will generate approximately US$20.8 million in cash with US$1.25 million placed in escrow, to be released over the next 12 months subject to meeting certain milestones.

Aveda expects to incur approximately US$5.0 to US$6.0 million in acquisition related costs.

David Werklund, Executive Chairman of Aveda stated: "The economics of this acquisition are as good as many that I have seen in my long career."

Aveda retained approximately 50 pieces of non-oilfield equipment, including 3 cranes, 26 service vehicles and 7 loaders/forklifts, which will immediately be deployed into Aveda's operations. Aveda also retained another 504 pieces of oilfield equipment, of which 42 pieces will immediately be deployed into the company's operations. The company also expects to use a portion of the acquired fleet to upgrade and replace existing equipment, with the balance to either be sold offshore to permanently remove excess capacity in the North American rig moving industry, or be kept and deployed as market conditions improve.

Kevin Roycroft, President of Aveda, stated: "This transaction allows us to grow our operational footprint in key markets, expand our blue-chip customer base and better manage pricing pressures as we continue to grow. The successful completion of this acquisition is the result of a lot of hard work by the Aveda team, as we were well positioned to take advantage of this incredible opportunity brought on by current market conditions. We intend to take advantage of additional opportunities as they arise, with the intent of becoming the leading rig mover in North America."

Having acquired a significant competitor, Aveda expects to reduce pricing pressure, and prevent Hodge's oilfield assets from creating excess capacity in the market, or potentially enabling new market entrants within the sector.

Aveda will gain access to Hodges' entire customer base, which at its peak in 2012, generated US$166.0 million in revenue.

Through assets sales and conversion of the working capital into cash, Aveda expects to recover more than 92% of its initial investment with 90 to 120 days. The company expects to recover all of its investment including acquisition related expenses within six months through increased revenue from Hodges' customers and reduced pricing pressure.

For more information, please review Aveda's news releases on the company's website www.avedaenergy.com, contact Bharat Mahajan CFO at 403-264-5769 or email bharat.mahajan@avedaenergy.com.

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