ShawCor Ltd. To Acquire Flexpipe Systems Inc.
TSX: SCL.A, SCL.B
TORONTO, May 26 /CNW/ - SHAWCOR LTD. (TSX: SCL.A, SCL.B) (ShawCor) and
FLEXPIPE SYSTEMS INC. (Flexpipe) today jointly announced that they have
entered into a definitive arrangement agreement whereby ShawCor will acquire
all of the outstanding shares of Flexpipe for a total consideration of
approximately $130 million. Flexpipe is a leading manufacturer of spoolable
composite line pipe which is used by oil and gas producers in applications
that benefit from the product's ease and speed of installation and its
pressure and corrosion resistance capabilities.
The transaction will be effected by means of a court approved plan of
arrangement. Under the terms of the arrangement, shareholders of Flexpipe will
receive a cash payment of $7.75 per share of Flexpipe. Holders of options or
warrants to acquire shares of Flexpipe which are not exercised prior to the
effective date of the plan of arrangement will receive a cash payment equal to
the difference between $7.75 and the exercise price of the option or warrant.
The board of directors of Flexpipe has considered the plan of arrangement
and has determined that it is in the best interests of Flexpipe and its
securityholders. Completion of the plan of arrangement is subject to
regulatory approval, court approval, approval of the securityholders of
Flexpipe and to other customary conditions. Flexpipe securityholders will be
asked to approve the transaction at a special meeting of securityholders to be
scheduled in June 2008. The transaction will require the affirmative approval
by holders of two-thirds of the Flexpipe shares, options and warrants, voting
together as a single class, that vote in person or by proxy at such meeting.
Flexpipe is expected to mail a management proxy circular to its
securityholders in early June in respect of the meeting. This circular will
contain important information regarding this proposed transaction.
Flexpipe engaged Tristone Capital Inc. (Tristone) as its financial
advisor to assist in the sale process. Tristone has provided an opinion to the
board of directors of Flexpipe that the consideration offered to
securityholders of Flexpipe under this proposed transaction is fair, from a
financial point of view, to the Flexpipe securityholders. A copy of the
opinion will be included in the management proxy circular to be mailed to the
shareholders of Flexpipe.
Mr. Bill Buckley, President and CEO of ShawCor stated that: "The
management and employees of Flexpipe have done a great job establishing a
leadership position in the Canadian market for flexible composite pipe for oil
and gas gathering systems, water injection lines and other applications. The
combination with ShawCor will accelerate Flexpipe's recent entry into the
United States and into other selected international markets. ShawCor will also
provide support and resources for Flexpipe's product development and growth
programs. In addition, through the combination, Flexpipe will achieve several
cost efficiencies in material procurement and international expansion.
Flexpipe's product advantages, which include corrosion resistance, ease of
installation, durability, operational and cost effectiveness, provide ShawCor
with an attractive new product line to address a growing opportunity that is
emerging within the pipeline industry."
Mr. Regan Davis, President and CEO of Flexpipe stated that: "The Flexpipe
team is enthusiastic about becoming part of the ShawCor family. We recognize
that this transaction will provide exciting opportunities for Flexpipe
employees as the company's growth continues within ShawCor. Our combination
with ShawCor will provide Flexpipe with the critical infrastructure and
support necessary to expand the sale of our products internationally, which
will allow Flexpipe to continue providing valuable products and services to
our customers on a new global scale."
Subject to receipt of all required approvals, the transaction is expected
to be completed within the next two months.
ShawCor Ltd. is an energy service company specializing in products and
services for the pipeline and pipe services and the petrochemical and
industrial segments of the oil and gas industry. The company operates through
six divisions with over sixty manufacturing and service facilities located
around the world.
Flexpipe Systems Inc. is a Calgary-based, privately-owned company that
manufactures and sells a proprietary non-metallic, corrosion-resistant
pipeline product marketed primarily to oil and natural gas producers in Canada
and the United States.
This news release contains forward-looking information within the meaning
of applicable securities laws. Words such as "may", "will", "should",
anticipate", "plan", "expect", "believe", "predict", "estimate" or similar
terminology are used to identify forward-looking information. This
forward-looking information is based on assumptions, estimates and analysis
made in the light of the company's experience and its perception of trends,
current conditions and expected developments, as well as other factors that
are believed by the company to be reasonable and relevant in the
circumstances. Forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from those predicted, expressed or
implied by the forward-looking information. The risks and uncertainties
include, among other things, changes in global economic activity and changes
in energy supply and demand which impact on the level of drilling activity and
pipeline construction; political, economic and other risks arising from
international operations; compliance with environmental, trade and other laws;
liability claims; fluctuations in foreign exchange rates and fluctuations in
raw material prices, as well as other risks and uncertainties that are more
fully described in the ShawCor Annual Information Form, annual and quarterly
reports and in other reports and filings made with securities regulatory
authorities and available at www.sedar.com.
For further information: ShawCor Ltd., Gary Love, Vice President,
Finance and CFO, Telephone: (416) 744-5818, E-mail: glove@shawcor.com;
Flexpipe Systems Inc., Regan Davis, President & CEO, Telephone: (403)
503-0548, E-mail: r.davis@flexpipesystems.com
