All amounts expressed in CAD$
MONTREAL and
WOODSTOCK, ON, July 24, 2014 /CNW Telbec/ - TransForce Inc.
(TSX: TFI) (OTCQX: TFIFF), a North American leader in the
transportation and logistics industry, and Contrans Group Inc.
(TSX: CSS), a diverse provider of specialized transportation
services, today announced that they have entered into a Support
Agreement for the acquisition by TransForce, for $14.60 in cash per share, of all of the issued
and outstanding Class A subordinate voting shares and
Class B multiple voting shares of Contrans by way of a
friendly, Board-approved take-over bid (the "Offer"). The
total equity purchase price is approximately $495 million.
The Support Agreement provides that if all
conditions of the Offer have been satisfied or are waived by
TransForce, Contrans will declare a special dividend of
$0.40 per share in respect of the
recent sale of its Waste Transportation segment. Together
with the $14.60 per share Offer
price, the total consideration of $15.00 represents a premium of approximately
16.7% to the 52-week volume weighted average trading price of
Contrans' Class A shares on the Toronto Stock Exchange and a
premium of approximately 5.1% to the volume weighted average
trading price of Contrans' Class A shares for the ten trading
days ended July 24, 2014.
The special dividend will be paid to Contrans shareholders of
record immediately prior to TransForce taking-up and paying for
tendered shares under the Offer. As a result, Contrans
shareholders who tender their shares to the Offer will receive the
special dividend, if paid.
The Board of Directors of Contrans, after
consultation with its financial and legal advisors, has unanimously
approved entering into the Support Agreement and unanimously
recommends that Contrans shareholders tender their shares to the
Offer. Cormark Securities Inc., the financial advisor to
Contrans, has provided a fairness opinion to the effect that, as of
the date of the opinion and subject to the limitations and
qualifications therein, the consideration of $14.60 in cash per share to be received by
Contrans shareholders is fair, from a financial point of view, to
the Contrans shareholders.
All of Contrans' directors and executive
officers, holding in the aggregate 100% of Contrans' Class B
shares and approximately 14.1% of its Class A shares, have
entered into "soft" lock-up agreements with TransForce, pursuant to
which they have agreed to tender all of their Contrans shares to
the Offer.
"I have admired the progress of Contrans for
some time. Contrans has a culture similar to that of
TransForce, strategically acquiring companies that add value for
its shareholders. Contrans has a history of profitability, is
financially sound and has seen steady growth over the years.
From transportation facilities located mostly in Canada, Contrans offers customers a wide array
of specialized services. This acquisition provides exciting
potential for TransForce, adding strong resources, an excellent
client base, and importantly, very strong management," said
Alain Bédard, Chairman, President and Chief Executive Officer
of TransForce.
"TransForce has a significant market presence
that will benefit our operations and possesses many of the same
values that have allowed Contrans to operate successfully. I
believe the entrepreneurial culture of Contrans will fit in well
with TransForce. I am proud of Contrans' management's
accomplishments over the past 25 years and look forward to
seeing the team continue to flourish as part of the TransForce
organization," said Stan Dunford,
Chairman and Chief Executive Officer of Contrans.
The Offer is not subject to any financing
condition. TransForce has entered into a commitment letter
with National Bank of Canada
and Royal Bank of Canada to ensure
that the required funds will be available to make full payment to
complete the Contrans acquisition pursuant to the Offer.
The Support Agreement contains customary deal
protection provisions in favour of TransForce for a transaction of
this kind.
The Offer is expected to commence on or about
August 21, 2014.
TransForce will mail a take-over bid circular and related
documents, and Contrans will mail a directors' circular, to
Contrans shareholders in accordance with the Support Agreement and
applicable laws. The Offer will be open for acceptance for a
period of not less than 35 days and will be conditional upon,
among other things, there being validly deposited or tendered and
not withdrawn, a number of Contrans shares that represents at least
662/3% of the outstanding Class A shares and at
least 662/3% of the outstanding Class B shares, and
at least a majority of the outstanding Class A shares, the
votes of which would be included in any minority approval of a
subsequent acquisition transaction by TransForce, pursuant to
applicable securities regulations. The Offer will be subject
to certain customary conditions, including receipt of relevant
regulatory approvals and the absence of any material adverse
changes with respect to Contrans. Once the minimum acceptance
level for the Offer is achieved, TransForce intends to take steps
available to it under applicable law to acquire all other
outstanding shares of Contrans.
Following successful completion of the Offer,
TransForce intends to nominate Stan Dunford, Chairman and
Chief Executive Officer of Contrans, for election to the TransForce
Board of Directors at the next annual meeting of TransForce's
shareholders, expected to be held in April 2015.
National Bank Financial Inc. is acting as
financial advisor and Fasken Martineau DuMoulin LLP is acting
as legal counsel to TransForce in connection with the Offer.
Cormark Securities Inc. is acting as financial advisor and
Cassels Brock &
Blackwell LLP is acting as legal counsel to Contrans.
TRANSFORCE CONFERENCE CALL
Friday, July 25, 2014 at 9:00 a.m., Eastern
time
Dial-in number: 1-888-231-8191
A presentation is also available at
www.transforcecompany.com
A recording of the call will be available until midnight on
August 1, 2014 by dialing 1-855-859-2056 or 416-849-0833 and
entering passcode 63452988. |
ABOUT TRANSFORCE
TransForce Inc. is a North American leader in
the transportation and logistics industry operating across
Canada and the United States through its
subsidiaries. TransForce creates value for shareholders by
identifying strategic acquisitions and managing a growing network
of wholly-owned, operating subsidiaries. Under the TransForce
umbrella, companies benefit from corporate financial and
operational resources to build their businesses and increase their
efficiency. TransForce companies service the following
segments:
- Package and Courier;
- Less-Than-Truckload;
- Truckload, which includes specialized truckload and dedicated
services;
- Specialized Services, which includes waste management,
logistics services and rig moving services.
TransForce Inc. is publicly traded on the
Toronto Stock Exchange (TSX: TFI) and the OTCQX marketplace in the
U.S. (OTCQX: TFIFF). For more information, visit
http://www.transforcecompany.com.
ABOUT CONTRANS
Contrans has been providing freight
transportation services as a publicly-listed company since
1985. With approximately 1,400 power units and 2,600
trailers under management, Contrans is one of the largest freight
transportation companies in Canada.
Contrans is publicly traded on the Toronto Stock
Exchange (TSX: CSS). For more information, visit
http://www.contrans.ca.
CAUTIONARY STATEMENT
No stock exchange, securities commission or
other regulatory authority has approved or disapproved of the
information contained herein.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking
statements" within the meaning of applicable securities laws that
are intended to be covered by the safe harbours created by those
laws, including statements that use forward-looking terminology
such as "may", "will", "expect", "anticipate", "believe",
"continue", "potential", or the negative thereof or other
variations thereof or comparable terminology. Such
forward-looking statements may include, without limitation,
statements regarding the completion of the proposed transaction and
other statements that are not historical facts. While such
forward-looking statements are expressed by Contrans and TransForce
in good faith and believed by Contrans and TransForce to have a
reasonable basis, they are subject to important risks and
uncertainties including, without limitation, approval of applicable
governmental authorities, the satisfaction or waiver of certain
other conditions contemplated by the Support Agreement, and changes
in applicable laws or regulations.
Forward-looking statements are based on
suppositions and uncertainties as well as on management's best
possible evaluation of future events. Such factors may
include, without excluding other considerations, fluctuations in
quarterly results, evolution in customer demand for products and
services, the impact of price pressures exerted by competitors, and
general market trends or economic changes. As a result,
readers are advised that actual results may differ from expected
results. The timing and completion of the proposed
acquisition of Contrans is subject to certain conditions,
termination rights and other risks and uncertainties.
Accordingly, there can be no assurance that the proposed
acquisition of Contrans will occur, or that it will occur on the
timetable or on the terms and conditions contemplated.
Investors should not assume that any lack of update to a previously
issued forward-looking statement constitutes a reaffirmation of
that statement. Reliance on forward-looking statements is at
investors' own risk.
SOURCE TransForce Inc.