CALGARY, Alta. — Cervus Equipment Corp. ("Cervus" or the "Company") (TSX: CVL) announced its intention to seek a long term sale and leaseback of approximately $50 to $60 million of real estate currently owned by the company.

Cervus is John Deere’s largest farm equipment dealer in Western Canada.

"While the majority of our dealerships are already located in leased premises, there is an opportunity to work with a long term landlord specializing in commercial real estate to capitalize on the value of our dynamic real estate portfolio," said Randy Muth, chief financial officer of Cervus. "This initiative aims to further align Cervus’ capital structure with our focus as an outstanding dealer of high-quality equipment brands."

Cervus expects a successful transaction to entail the land and buildings of approximately 10 dealerships with average initial lease terms of 15-20 years. After retiring mortgages associated with the properties, Cervus expects net free cash flow of approximately $25 to $30 million. Cervus considers market capitalization rates to range between 7.5% and 8.0%, which would not be expected to negatively impact earnings per share. In the short term, proceeds from a successful transaction would be used to reduce debt.

Execution of a sale and leaseback agreement remains subject to Cervus and a potential purchaser agreeing to acceptable terms, purchaser financing, purchaser’ due diligence, approval from Cervus’ lending syndicate, and approval from Cervus’ Board of Directors, among others. There can be no assurance that a transaction acceptable to Cervus will be obtained, and there can be no assurance that a transaction will be completed as proposed or at all.

About Cervus Equipment Corp.

Cervus acquires and operates authorized agricultural, construction, materials handling and transportation equipment dealerships. The company has interests in 72 dealerships in Canada, New Zealand, and Australia. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick and Doosan material handling equipment; and Peterbilt transportation equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL."