Toromont Ind Spinoff in the Works

OTTAWA, Feb 24 (Reuters) – Canadian industrial equipment supplier Toromont Industries Ltd (TIH.TO) reported a 13 percent increase in quarterly profit on Thursday and said a healthy backlog of business supports a positive outlook for 2011. The company, which sells, rents and services a broad range of Caterpillar Inc (CAT.N) heavy-construction and industrial equipment, said it earned C$35.4 million ($36.1 million), or 47 Canadian cents a share, in the fourth quarter ended Dec. 31. That compares with a profit of C$31.4 million, or 48 Canadian cents a share, in the same period last year, when it had fewer shares outstanding. Revenue was up 57 percent at C$709.7 million, lifted by Toromont’s C$700 million acquisition of Enerflex Systems Income Fund in the first quarter. Toromont said its backlog rose 135 percent year-over-year to C$970 million. “With large backlogs and significant momentum in our product support activities, our consolidated outlook for 2011 is positive, even though the markets we serve are still in the early stages of recovery,” Chief Executive Robert Ogilvie said in a statement. In November, Toromont said it plans to spin off a company that will combine Enerflex with Toromont’s own natural gas production and processing equipment business. Under the deal, Toromont shareholders will exchange each current Toromont share for shares in both the existing Toromont business and in the new Enerflex, which will apply for its own listing on the Toronto Stock Exchange. “We believe that the pending spinoff of our combined gas compression and process equipment group under the name of Enerflex Ltd will open up exciting organic growth and expansion opportunities for Toromont and Enerflex,” Ogilvie said. Toromont shares were up 17 Canadian cents at C$30.12 on the Toronto Stock Exchange on Thursday afternoon. The stock has gained about 13 percent in the past 12 months.


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