Flowserve intends to terminate the Arrangement Agreement as Regulatory Approval from France will not be obtained
October 05 2023 - 3:59PM
Velan Inc. (“
Velan”) (TSX: VLN) today announces,
in connection with the arrangement agreement made as of February 9,
2023, among Velan, 14714750 Canada Inc.
(“
Purchaser”) and Flowserve US Inc.
(“
Parent” and, together with Purchaser,
“
Flowserve”), as amended by the first amendment to
the arrangement agreement dated March 27, 2023 (the
“
Arrangement Agreement”), that it has been
informed by Flowserve of its intent to, following the occurrence of
the Outside Date on October 7, 2023, and in accordance with the
terms of the Arrangement Agreement, send a notice to Velan to
terminate the Arrangement Agreement, considering that the
Regulatory Approval (as such term is defined in the Arrangement
Agreement) from France has not and will not be obtained.
As previously disclosed, the conclusion of the
transactions set out in the Arrangement Agreement was conditional
on the Regulatory Approvals, including one from France. In order to
meet that key condition, Flowserve offered a package of remedies
and undertakings to the French Authorities. The French Authorities
have now informed the parties that they will not provide the
requisite Regulatory Approval for the sale to Flowserve regardless
of such remedies or otherwise. Flowserve has consequently informed
Velan of its intention to terminate the Arrangement Agreement
following the Outside Date. According to the terms of the
Arrangement Agreement, no termination fee will be payable by either
party.
Velan will resume operations as an independent
business, free of the covenants and other restrictions of the
Arrangement Agreement.
“We thank our employees and other stakeholders
who supported the proposed transaction. Although we are
disappointed with the outcome and the decision of the French
regulators, we remain confident in the future of Velan’s business.
We will now turn our entire focus to the operation of a successful
business while continuing to assess all strategic options available
to the Company to create value for all of our stakeholders,” said
Mr. James Mannebach, Chair of the Board of Directors of Velan.
About Velan Inc.
Founded in Montreal in 1950, Velan Inc. is one
of the world’s leading manufacturers of industrial valves. Velan
Inc. is a family-controlled public company, employing approximately
1,650 people with manufacturing facilities in 9 countries. Velan
Inc. is a public company with its shares listed on the Toronto
Stock Exchange under the symbol VLN.
Caution Regarding Forward-Looking
Statements
Certain statements made in this news release may
constitute forward-looking information or forward-looking
statements within the meaning of applicable securities laws,
including, but not limited to, statements with respect to the
future plans of Velan and other statements that are not material
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking terminology such as “may”,
“will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”,
“would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue”
or the negative of these terms or variations of them or similar
terminology.
The forward-looking statements included in this
news release are based on our current expectations, projections,
estimates and assumptions. These statements are only predictions,
not guarantees. Such forward-looking statements are subject to
numerous risks and uncertainties that are difficult to predict.
These risks and uncertainties are disclosed in the Company’s
filings with the appropriate securities commissions. Should one or
more of these risks or uncertainties materialize, or should
assumptions underlying the forward-looking information prove
incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or
expected.
Readers are cautioned not to place undue
reliance on the forward-looking statements and information
contained in this news release. All forward-looking statements
included in this news release are based on information available to
us on the date hereof, and we assume no obligation to update any
forward-looking statement.
Velan Contact:
Rishi Sharma, Chief Financial Officer+ 1 438 817 4430
Velan (TSX:VLN)
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