Pacific Safety Products Inc is to acquire assets related to the flame resistant clothing business of PROF Work & Outer Wear Western Canada Ltd.

Based in Edmonton, Alberta, PROF Canada was incorporated in 1985 as Professional Work and Outerwear, Western Canada Ltd. Since then, privately held PROF Canada has grown to become a fully integrated apparel design, manufacturing, marketing and distribution company.

PROF Canada is the third largest flame resistant clothing manufacturer and supplier in Canada, holding an estimated 15 per cent market share. Revenue for flame resistant clothing for PROF Canada for the nine months ending May 31, 2000 was approximately $3.75m.

Under the terms of the proposed acquisition, PSP will purchase the physical assets, trademarks, current customer accounts, and order book related to PROF Canada's fire resistant clothing business. The tangible assets have an estimated value of approximately $2m.

Upon closing, PSP will assume PROF Canada's liabilities of approximately $1.8m related to its flame resistant clothing business. In addition, PSP will make a cash payment of $400,000 and issue 2 million common shares of PSP at a price of $0.40 per common share for a value of $800,000.

The acquisition is subject to, among other things, the negotiation and execution of a definitive purchase and sale agreement, regulatory and other customary approvals and requirements, financing, and satisfactory completion of PSP's due diligence review of PROF Canada. The acquisition is expected to close in September 2001.

Following closing, the co-owners of PROF Canada, Michael Ens and Tom Legare, will join PSP in key positions of the company's Safety and Industrial Clothing Products sales unit.

"The acquisition of PROF Canada will further PSP's strategic objective of growth by taking advantage of PROF Canada's momentum in the flame resistant clothing industry," commented Brad Field, CEO of PSP. "During the last year, PSP identified PROF Canada as a potential acquisition target during an intensive search of companies in the fire resistant clothing market."

"The board and management of PSP feels it has maintained its focus on its strategic goals of growth through acquisition and diversifying PSP's revenue stream to become less reliant on government buying cycles," said Mr. Field.