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Cervus to pay $25.5M for Peterbilt of Ontario Inc., operator of 12 dealerships

The Canadian Press

CALGARY - Cervus Equipment Corp. (TSX:CVL) says it has a deal to acquire the business and assets of Peterbilt of Ontario Inc. for about $25.5 million in cash.

In announcing the deal after markets closed Wednesday, Cervus said it would use $20 million of its own money and $5.5 million drawn from credit facilities to purchase the business of POI, which operates 12 dealerships across Ontario selling and servicing the full line of Peterbilt trucks.

"Cervus strives to be an outstanding dealer of trusted and reliable brands and we grow our business in partnership with strong manufacturers such as Peterbilt," president and CEO Graham Drake said in a statement.

"This acquisition extends our relationship with Peterbilt and expands our transportation business into the largest freight market in Canada."

Closing of the transaction, subject to various conditions including regulatory approval, is expected about July 21.

Cervus acquires and manages authorized agricultural, commercial, industrial and transportation equipment dealerships and has interests in 56 dealership locations in Western Canada, New Zealand, and Australia.

On the Toronto Stock Exchange, Cervus shares were closed down nine cents at $21.09 on Wednesday.