Quest Solution, Inc. and Sign a Letter Of Intent for the Sale of Quest Solution Canada to Viascan
EUGENE, OR / ACCESSWIRE / September 19, 2016 / Quest Solution, Inc. "The Company" (OTCQB: QUES), a leading provider in the technology, software, and mobile data collection systems business, announced today that Viascan Group Inc. and Quest Solution, Inc. have signed a letter of intent whereby all the shares of Quest Solution Canada Inc. will be sold back to Viascan Group Inc. Both parties are working to complete the Definitive Agreement in order to close the transaction as soon as possible.
Under the terms of the Letter of Intent, Quest Solution, Inc. will receive shares of Common Stock and Preferred Stock of Quest Solution, Inc. and exchangeable shares of Quest Exchange Ltd., forgiveness or payment of certain debts or liabilities or retention of certain assets, cash over a period of 4-5 months subsequent to the effective date of the transaction (subject to adjustment for the assumption or release of certain contracts and adjustment based on the value of net assets at closing). Quest Solution, Inc. will also receive a contingent consideration upon a liquidity event or a change of control of Quest Solution Canada Inc. for a period of 10 years subsequent to the transaction. Quest Solution, Inc. will also have the right of first refusal for any offer to purchase Quest Solution Canada Inc. during the same 10 year period. The consideration given for the transaction to the Company is estimated to be approximately $5.0 million (exclusive of the value of the contingent consideration). In return, Quest Solution, Inc will forgive the entire balance of the debts owing by Quest Solution Canada to the Company, estimated to be approximately $7.0 million. The consideration and intercompany debt described above are estimates and subject to adjustment at closing. The final terms and conditions of the transaction will be set forth in the definitive agreement.
While the transaction is being completed, Gilles Gaudreault will take a leave of absence as CEO of Quest Solution, Inc. and will resign as a director and officer effective with the date of closing. Tom Miller, currently Quest Solution, Inc. President and Chairman, will serve as the Company's Interim Chief Executive Officer during Mr. Gaudreault's leave of absence. Once the transaction is completed, Mr. Gaudreault will become the CEO of the Canadian operations for Viascan Group Inc. Tom Miller commented, "The repurchase of the Canadian operations by Viascan Group Inc. will be beneficial for all the stakeholders. It will allow for the simplification of the respective operations, and will lead to more flexibility to affect operational and financial initiatives. This transaction will help us refocus on our respective strengths, reduce our costs and accelerate our path to profitability. Post transaction, the parties see potential opportunities to cooperate, especially on complementary products."
Gilles Gaudreault added, "Both parties will benefit from this transaction. It will give us greater flexibility and help us refocus on our core business. In the end, we needed to best align our operations and strengths."
