- Enercare shareholders to receive C$29.00 per Enercare common
share
- The price represents a premium of 64% to Enercare's
volume-weighted average share price since the establishment of the
Special Committee on March
15th
- Delivers significant and immediate value to Enercare
shareholders
- Canadian shareholders will have the option to receive, in
lieu of cash consideration, units that will be exchangeable into
limited partnership units of Brookfield Infrastructure Partners LP,
up to a maximum of 15 million units, representing approximately 25%
of the aggregate amount of equity consideration
- The transaction has received the unanimous approval of
Enercare's Board of Directors and is subject to approval by
Enercare shareholders
TORONTO, Aug. 1, 2018 /CNW/ - Enercare Inc. (TSX:ECI,
"Enercare") and Brookfield Infrastructure and its institutional
partners (collectively, "Brookfield") are pleased to announce that
they have entered into an arrangement agreement (the "Arrangement
Agreement") pursuant to which Brookfield has agreed to acquire all the
issued and outstanding common shares of Enercare (each a "Share")
for C$29.00 per Share in a
transaction valued at C$4.3 billion
including debt (the "Transaction"). Brookfield Infrastructure
Partners LP (NYSE:BIP) (TSX:BIP.UN) expects to fund, after the
assumption of debt, approximately US$630
million of the Transaction, with the balance being funded by
its institutional partners. Enercare, one of North America's largest home and commercial
services companies, provides residential energy infrastructure,
including water heaters, heating, ventilation, air conditioners
("HVAC") rentals, as well as other essential home services to
approximately 1.6 million customers annually and has a sub-metering
business with 270,000 contracted services.
The Transaction price of C$29.00
per Share represents a 53% premium to the closing price of Enercare
Shares on the TSX on July 31, 2018,
the last trading day prior to the announcement of the Transaction,
and a 64% premium to Enercare's volume-weighted average Share price
on the TSX since the establishment of a Special Committee of
Directors (the "Special Committee") formed to evaluate various
strategic and financial options available to Enercare, including
options relating to capital structuring, future growth
opportunities and a potential sale of the company in whole or in
parts.
"We are pleased to announce today a transaction for Enercare
that benefits all stakeholders of the company. We have concluded a
transaction with Brookfield that
recognizes the value that has been created at Enercare over the
last 16 years. Brookfield is
recognized as a leading infrastructure investor worldwide and I am
confident they will provide opportunity for employees of Enercare
and capital to continue growing the business," commented
Jim Pantelidis, Chairman of
Enercare's Board of Directors (the "Board of Directors") and
Chairman of the Special Committee. "Enercare's strong management
team has accomplished tremendous growth since our initial public
offering in 2002. Since inception, we have generated a total return
for shareholders of approximately 960%, and we have created one of
North America's premier providers
of home and commercial services. The Board of Directors believes
that the transaction provides significant value for our
shareholders benefiting all stakeholders, and unanimously
recommends that they vote in favour of the transaction," added Mr.
Pantelidis.
"We are excited to be acquiring Enercare, a high-quality
business that has established a leadership position in North America," said Sam Pollock, CEO of Brookfield Infrastructure.
"It benefits from stable, long-term cash flows through equipment
rentals to a well-established customer base, and we see attractive
opportunities to grow the business and continue to create value,
leveraging Brookfield's
significant presence in the utility, home building and
multi-residential sectors across Canada and the U.S."
The Transaction has the unanimous support of the Special
Committee, as well as the full Board of Directors of Enercare. The
Board of Directors, after receiving the unanimous recommendation of
the Special Committee and in consultation with its financial and
legal advisors, has unanimously determined that the Transaction is
in the best interests of Enercare and fair to shareholders and is
unanimously recommending that shareholders vote in favour of the
Transaction. Enercare's Board of Directors has received an opinion
from its financial advisor, National Bank Financial Markets, that
as of the date thereof and subject to the assumptions, limitations
and qualifications set forth therein, the consideration to be
received by shareholders of Enercare pursuant to the Transaction is
fair, from a financial point of view, to shareholders of
Enercare.
Transaction Details
The Transaction is structured as a plan of arrangement under the
Canada Business Corporations Act and the completion of the
Transaction is subject to approval by holders of at least
two-thirds of the votes cast by Enercare shareholders, at a special
meeting of Enercare shareholders, and by the Ontario Superior
Court. Further information regarding the Transaction will be
contained in an information circular that Enercare will prepare,
file and mail in due course to Enercare shareholders in connection
with the special meeting. In addition to shareholder and court
approvals, the Transaction is subject to compliance with the
Competition Act (Canada) and the
satisfaction of certain other customary closing conditions and is
expected to close in the fourth quarter 2018.
Under the Transaction, each Enercare shareholder will be
entitled to receive C$29.00 per Share
in cash. Enercare shareholders who are deemed to be resident in
Canada for purposes of the Income
Tax Act (Canada) will have the
right to elect to receive, in lieu of cash consideration, 0.5509
exchangeable units ("Exchangeable Units") to be issued by a
subsidiary of Brookfield Infrastructure ("Exchange LP"). The
Exchangeable Units will provide holders with distributions that are
economically equivalent to non-voting limited partnership units
("BIP Units") of Brookfield Infrastructure and will be
exchangeable, on a one-for-basis, for BIP Units. The maximum amount
of Exchangeable Units issuable by Exchange LP in lieu of cash will
not exceed 15 million in the aggregate, representing approximately
25% of the aggregate value of the consideration available under the
Transaction. If and to the extent that Canadian resident
shareholders elect to receive Exchangeable Units in excess of the
15 million maximum number of Exchangeable Units available for
issuance, such elections for Exchangeable Units shall be pro rated
and the balance of the consideration will be paid in cash. The
availability of the Exchangeable Unit option for Canadian
shareholders of Enercare has been approved by the Board of
Directors of Brookfield Infrastructure and is subject only to
Brookfield's receipt of certain
third-party consents and obtaining listing approvals from the TSX
and NYSE, all of which Brookfield
expects to receive before Enercare's special meeting of
shareholders. Provided that those conditions are satisfied, the
Transaction will provide a capital gains tax-deferred roll-over
option for taxable Canadian holders of Shares who elect to receive
Exchangeable Units, subject to pro ration.
The Arrangement Agreement includes customary provisions relating
to non-solicitation, a "fiduciary-out" permitting Enercare's board
of directors to respond to any unsolicited superior alternate
proposals and Brookfield's right
to match any such proposals. The Arrangement Agreement also
provides for the payment by Enercare of a C$111 million termination fee if the Arrangement
Agreement is terminated in certain specified circumstances.
Completion of the Transaction is expected to result in a change
of control under the indentures governing senior notes of Enercare
Solutions Inc., a subsidiary of Enercare, copies of which have been
filed on SEDAR and are available at www.sedar.com. The proposed
transaction has been structured with the intent of maintaining the
Company's existing BBB credit rating.
Enercare will continue to pay its normal monthly distributions
in the ordinary course, consistent with past practice through
closing of the Transaction.
The directors and senior officers of Enercare have entered into
customary voting support agreements to vote in favour of the
Transaction.
All Enercare shareholders are urged to read the information
circular, once available, as it will contain additional important
information concerning the Transaction. The Arrangement Agreement
will be available electronically on SEDAR under the profile of
Enercare which can be accessed at www.sedar.com.
Advisors
National Bank Financial Markets is serving as financial advisor
to Enercare. Davies Ward Phillips
& Vineberg LLP is serving as legal advisor to Enercare. TD
Securities, BMO Capital Markets and Scotiabank are serving as
financial advisors and McCarthy Tétrault LLP is serving as legal
advisor to Brookfield.
Enercare Inc. is headquartered in Markham,
Ontario, Canada and is
publicly traded on the Toronto Stock Exchange (TSX: ECI). As one
of North America's largest home and commercial services
and energy solutions companies with approximately 5,100 employees
under its Enercare and Service Experts brands, Enercare is a
leading provider of water heaters, water treatment, furnaces, air
conditioners and other HVAC rental products, plumbing services,
protection plans and related services. With operations
in Canada and the United
States, Enercare serves approximately 1.6 million customers
annually. Enercare is also the largest non-utility sub-meter
provider, with electricity, water, thermal and gas metering
contracts for condominium and apartment suites
in Canada and through its Triacta brand, a premier
designer and manufacturer of advanced sub-meters and sub-metering
solutions.
Brookfield Infrastructure Partners is a leading global
infrastructure company that owns and operates high quality,
long-life assets in the utilities, transport, energy and data
infrastructure sectors across North and South America, Asia
Pacific and Europe. We are
focused on assets that generate stable cash flows and require
minimal maintenance capital expenditures. Brookfield Infrastructure
Partners is listed on the New York
and Toronto stock exchanges.
Further information is available at
www.brookfieldinfrastructure.com.
Brookfield Infrastructure is the flagship listed infrastructure
company of Brookfield Asset Management, a leading global
alternative asset manager with approximately $285 billion of assets under management. For more
information, go to www.brookfield.com
Cautionary Note Regarding Forward-looking
Statements
This news release
contains certain forward-looking statements within the meaning of
applicable Canadian securities laws and within the meaning of
Section 27A of the U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act
of 1934, as amended and "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995
("forward-looking statements" or "forward-looking information")
that involve various risks and uncertainties. Statements other than
statements of historical fact contained in this news release may be
forward-looking statements, including, without limitation,
management's expectations, intentions and beliefs concerning
anticipated future events, results, circumstances, economic
performance or expectations with respect to Enercare and/or
Brookfield Infrastructure, including, as applicable, Enercare's or
Brookfield Infrastructure's business operations, business strategy
and financial condition. When used herein, the words "anticipates",
"believes", "budgets", "could", "estimates", "expects",
"forecasts", "goal", "intends", "may", "might", "outlook", "plans",
"projects", "schedule", "should", "strive", "target", "will",
"would" and similar expressions are often intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words. These forward-looking
statements may reflect the internal projections, expectations,
future growth, results of operations, performance, business
prospects and opportunities of Enercare or Brookfield
Infrastructure, as applicable, and are based on information
currently available to Enercare and/or Brookfield Infrastructure,
as applicable, and/or assumptions that Enercare and/or Brookfield
Infrastructure, as applicable, believes are reasonable. Many
factors could cause actual results to differ materially from the
results and developments discussed in the forward-looking
information, including the inability to complete the transaction
referred to in this news release, including as a result of failure
to receive the approvals referenced herein.
SOURCE Enercare Inc.