- Kelso & Company to make an all-cash offer for all the
common shares of EACOM for C$0.38 per
common share, representing a premium of approximately 46.2%
to the closing price of the shares on March
21, 2013 and a premium of 63.7% to the 30-day volume
weighted average price ("VWAP").
- EACOM's Board of Directors unanimously recommends that
shareholders accept the Kelso offer.
- EACOM directors, senior executive officers and certain
significant shareholders have entered into lock-up agreements,
representing approximately 44% of the fully-diluted shares, with
Kelso and have agreed to tender all of their common shares to the
Kelso offer.
MONTREAL and
VANCOUVER, March 22, 2013 /CNW Telbec/ - EACOM Timber
Corporation (TSXV: ETR) ("EACOM", or the "Company") and Kelso &
Company jointly announce that Kelso & Company, through a wholly
owned subsidiary ("Kelso") has agreed, subject to certain
conditions, to make a take-over bid to acquire all of the common
shares of EACOM for C$0.38 in cash
per common share (the "Offer"). EACOM and Kelso have entered into a
support agreement (the "Support Agreement") in connection with the
Offer.
The Offer represents a premium of 46.2% to
EACOM's closing share price of C$0.26
on the TSX Venture Exchange on March
21, 2013 and a premium of 63.7% to the VWAP of
the EACOM common shares for the 30-day period ending on that
date.
"We are pleased with Kelso's offer, which
recognizes the Company's inherent value. Kelso is extremely well
capitalized and is in a position to provide the capital to
implement EACOM's long term growth and mill modernization plan. We
believe that the Offer is in the best interests of the Company and
its stakeholders, including its shareholders and employees", said
Terry Lyons, Chair of the Special
Committee of the Board of Directors of EACOM.
The Special Committee of the Board of Directors
of EACOM, following review of the terms and conditions of the Offer
and consideration of a number of factors unanimously recommended
the Offer to EACOM's Board of Directors. The Special
Committee and the Board of Directors have received an opinion from
each of Canaccord Genuity Corp. and Sanabe & Associates LLC
that as of the date of the opinion and subject to the assumptions
outlined therein, the consideration payable to EACOM shareholders
under the transaction is fair, from a financial point of view.
EACOM's Board of Directors, after receiving the
recommendation of the Special Committee, has unanimously determined
that the Offer is in the best interests of EACOM and its
shareholders and unanimously recommends that shareholders accept
the Offer.
The directors and senior executive officers of
EACOM, as well as certain significant securityholders of EACOM,
have entered into lock-up agreements with Kelso and have agreed to
tender all of their common shares (including common shares issuable
upon the exercise of options and warrants) to the Offer. Common
shares representing approximately 44% of the issued and outstanding
EACOM common shares on a fully diluted basis are subject to the
lock up agreements.
The Support Agreement provides that the Board of
Directors of EACOM may under certain circumstances terminate the
Support Agreement in favour of an unsolicited superior proposal,
subject to the payment of a break fee of C$7.0 million and subject to a right by Kelso to
match such superior proposal.
Full details of the Offer will be included in a
take-over bid circular that is expected to be mailed to EACOM
shareholders in the first week of April. The Offer will be open for
a period of not less than 35 days and the Offer will be subject to
certain customary conditions, including there having been validly
deposited and not withdrawn at the expiry time of the Offer that
number of EACOM common shares that constitutes at least 66⅔ per
cent of the outstanding common shares of EACOM on a fully diluted
basis and receipt of all required regulatory approvals. The Offer
is not subject to any financing condition.
About EACOM
EACOM Timber Corporation is a TSX-V listed
company. The business activities of EACOM consist of the
manufacturing, marketing and distribution of lumber, wood chips and
woodbased value-added products, and the management of forest
resources. EACOM owns eight sawmills, all located in Eastern Canada, and related tenures. The mills
are Timmins, Nairn Centre, Gogama, Elk
Lake and Ear Falls in
Ontario, and Val-d'Or, Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario and Ste-Marie, Quebec are currently idled. As a
result of improved market conditions, operations in Val-d'Or and Matagami which had been temporarily shut down
in 2011 resumed during the third quarter of 2012. The mill in
Timmins was seriously damaged by
fire in January 2012 and remains shut
down. EACOM also owns a lumber remanufacturing facility in
Val-d'Or, Quebec, and a 50%
interest in an "I" joist plant in Sault
Ste-Marie, Ontario.
About Kelso
Kelso & Company is one of the oldest and
most established firms specializing in private equity. Since
1980, Kelso has invested in over 115 companies in a broad range of
industry sectors with aggregate initial capitalization at closing
of over $40 billion. The firm
is currently investing its eighth investment partnership, Kelso
Investment Associates VIII, L.P., with $5.1
billion of committed capital. For more information,
please visit www.kelso.com.
The TSX Venture Exchange has neither approved
nor disapproved the content of this press release. All director and
officer appointments are subject to TSX Venture Exchange
approval.
Forward-Looking Statements
All statements in this news release that are
not based on historical facts are "forward-looking statements". In
this news release, such forward-looking statements include
statements regarding the ability of Kelso to complete the take-over
bid, the anticipated benefits of the take-over bid, the anticipated
benefits to EACOM shareholders of the take-over bid, the timing of
the take-over bid and the anticipated receipt of regulatory
approvals for the take-over bid. While management has based any
forward-looking statements contained herein on its current
expectations, the information on which such expectations were based
may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties and other factors, many of which are beyond
our control and could cause actual results to materially differ
from such statements. Such risks, uncertainties and other factors
include, but are not necessarily limited to, those set forth under
"RISKS AND UNCERTAINTIES" in the Company's current MD&A, and
under "RISK FACTORS" in the Company's Filing Statement dated
January 8, 2010.
Additional information relating to EACOM is available at
www.eacom.ca and on SEDAR at www.sedar.com.
SOURCE EACOM