NEWS RELEASE
AMERICAN ECO CORPORATION 154 University Avenue, Suite 200,
Toronto, Ontario, Canada M5H 3Y9 [NASDAQ SYMBOL: ECGOF/TSE
SYMBOL: ECX/CBOE SYMBOL: EOQ/BERLIN SYMBOL: AEOGR]
FOR IMMEDIATE RELEASE THURSDAY, FEBRUARY 26, 1998
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AMERICAN ECO OUTLINES LETTER OF INTENT
FOR DOMINION BRIDGE ACQUISITION
TORONTO, CANADA - MICHAEL E. MCGINNIS, CHAIRMAN, PRESIDENT & CEO
OF AMERICAN ECO CORPORATION announced today that as the first
step in a proposal to acquire Dominion Bridge Corporation of
Montreal, Quebec, following completion of the purchase of a
private placement of USD$5.0 million in shares and warrants of
Dominion Bridge, he has accepted appointments to the Board of
Directors and to the Executive Committee of Dominion Bridge.
Unanimous approval of an American Eco Letter of Intent to acquire
Dominion Bridge, was given upon the recommendation of Legg Mason
Wood Walker, Incorporated. The final transaction will be subject
to ratification of the Boards of both companies, execution of a
definitive acquisition agreement, approval of the shareholders of
both companies, as well as approval of requisite regulatory
authorities and customary closing conditions.
In the proposed acquisition transaction, the shareholders of
Dominion Bridge would receive, three year, 7-1/2% convertible
subordinated notes ("Notes") of American Eco in the principal
amount of USD$3.00 per each common share of Dominion Bridge. At
the end of each six-month period, holders may convert one-third
of the Notes into shares of American Eco common shares at a price
of USD$15.00 per share. In the event that American Eco's common
shares trade at more than USD$16.00 per share for a period of
twenty consecutive trading days, the Notes will be redeemable at
USD$3.00 per share by American Eco. The Notes will bc registered
and tradable on a nationally recognized securities exchange.
The transaction is valued at approximately USD$135.0 million
including the third party bank debt of Dominion Bridge
Corporation of USD$37.5 million. The valuation of Dominion
Bridge Corporation is based on the significant synergies between
the operating units of both companies in North America. American
Eco feels that the combined capabilities of the firms will enable
them to provide a broad array of services to their industrial
based clients including the offshore oil and gas businesses. The
significant engineering and construction expertise of Dominion
Bridge Corporation's 63% owned subsidiary, McConnell Dowell,
complements American Eco's business strategy.
The Letter of Intent includes a USD$25.0 million working capital
loan to be made available to Dominion Bridge by March 23, at
which time, American Eco will also provide management services to
Dominion Bridge. Concurrently, Dominion Bridge will issue a two-
year warrant to American Eco entitling American Eco to purchase
up to 10% of the outstanding common shares of Dominion Bridge at
USD$3.00 per share.
The Letter of Intent also provides for the payment of a USD$3.5
million break-up fee to American Eco in the event of a third
party acquisition of Dominion Bridge. The Letter of Intent
terminates if definitive agreements providing for the
contemplated transactions are not executed by April 6, 1998.
NEWS RELEASE - AMERICAN ECO CORPORATION - Page 2 of 2 - February
26, 1998
Michael McGinnis, Chairman, President & CEO of American Eco,
stated, "As a Canadian Company, American Eco plans to support the
employees and customers of Dominion Bridge through this
transition period and then to expand it as world class company,
by collaborating and sharing fabrication work with our American
Eco facilities in Halifax, Edmonton and Vancouver. In addition,
the ability to expand services not only throughout North America
but on a world wide basis, including the very strong Pacific Rim
presence of McConnell Dowell provides a major profit opportunity
for all divisions".
After execution of a definitive acquisition agreement, American
Eco and Dominion Bridge will file a registration statement with
the Securities and Exchange Commission containing a joint proxy
statement and prospectus that will be mailed to the companies'
stockholders. This announcement does not constitute an offering
of American Eco notes, which will be made only be means of a
prospectus filed with the Securities and Exchange Commission.
This news release contains forward-looking statements as defined
by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance and
underlying assumptions and other statements that are other than
statements of historical facts. These statements that are
subject to uncertainties and risks including, but not limited to,
ability to raise capital, economic conditions, continuation of
existing contracts and increase in backlog, impact of
competition, pricing, capacity and supply constraints or
difficulties, government regulation and other risks, including
similar risks involving Dominion Bridge. All such forward-
looking statements whether written or oral, and whether made by
or on behalf of the company are expressly qualified by these
cautionary statements and any other cautionary statements which
may accompany the forward-looking statements. In addition, the
Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date,
hereof.
DOMINION BRIDGE was established in 1879. The Company is active
in the international engineering and infrastructure markets. It
manages projects and operates facilities in North and South
America, Europe and the Asia Pacific. Dominion Bridge
Corporation's subsidiaries are Dominion Bridge, Inc., Steen
Becker, Inc. and Davie Industries. Its Australian subsidiary,
McConnell Dowell Corporation, is a major Asia Pacific engineering
firm.
AMERICAN ECO is a leading North American provider of single-
source construction management, maintenance, specialty
fabrication, engineering and environmental remediation services
in the refining, petrochemical, utility, forest products and
offshore manufacturing industries.
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For additional information call:
J.C.Pennie Bruce Tobecksen
Vice-Chairman Treasurer
Toronto, Canada Houston, Texas
(416) 340-2727 (281) 774-7000
WWW.AMERICANECO.COM
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