TORONTO, May 5 /CNW/ - Marsulex Inc. (TSX: MLX) is pleased to announce
that it has entered into an Arrangement Agreement with Chemtrade
Logistics Income Fund (TSX: CHE.UN) which will result in the
acquisition by Chemtrade of 100% of the outstanding common shares of
Marsulex by way of a plan of arrangement under the Canada Business Corporations Act.
Pursuant to the arrangement, Marsulex shareholders will have the option
to receive per Marsulex share either: (i) CAD $13.80 cash, or (ii) CAD
$10.50 in cash and a common share of Investis U.S., Inc. which will
hold Marsulex's Marsulex Environmental Technologies business ("MET").
The Board has made a determination that the fair market value of an
Investis common share as at today's date is CAD $3.30. Upon completion
of the arrangement, the Marsulex shareholders who elect to receive
Investis Common Shares will own through Investis 100% of MET.
The transaction has been structured in this way to allow all Marsulex
Shareholders the choice between an all cash option and an option which
would include cash and the right to participate in the future value of
MET through ownership of the Investis common shares. The Marsulex Board
of Directors has asked its two largest shareholder groups, Birch Hill
Equity Partners and TD Capital (with aggregate holdings of
approximately 60%) to decline the all cash option and both have agreed
to do so, thereby allowing all other shareholders to receive the all
cash option if they so elect.
"Today's announcement marks the culmination of a comprehensive process
to maximize value for Marsulex shareholders," said Marsulex CEO Laurie
Tugman. "We believe this transaction provides the best alternative for
Marsulex shareholders to receive attractive value and liquidity for
Fairness Opinion and Unanimous Board Approval
Prior to executing the Arrangement Agreement, the board of directors of
Marsulex obtained an opinion from GMP Securities L.P., that the
consideration to be received by Marsulex shareholders pursuant to the
Transaction is fair, from a financial point of view, to the Marsulex
The board of directors of Marsulex has unanimously approved the
transaction and recommends that shareholders vote to accept the offer.
The Company's two largest shareholder groups, Birch Hill Equity
Partners and TD Capital, who collectively hold approximately 60% of the
issued and outstanding shares of Marsulex, have entered into support
agreements with Chemtrade and have agreed to vote their shares in
favour of the Transaction at the special meeting of Marsulex
shareholders subject to the Arrangement Agreement having not been
terminated in accordance with its terms.
The Transaction is subject to the approval of at least two-thirds of the
votes cast by Marsulex shareholders at a special meeting of Marsulex
shareholders, which is expected to be held in late June, 2011.
Completion of the Transaction is also subject to the approval of the
Ontario Superior Court of Justice, the receipt of all other necessary
regulatory and third party approvals, and other customary conditions.
The Arrangement Agreement includes a fiduciary out for Marsulex where a
superior proposal has been received subject to Chemtrade's right to
match. The Arrangement Agreement contains customary deal protections
for Chemtrade including the payment by Marsulex of a break-up fee of
$17.5 million in certain circumstances. It also contains a payment by
Chemtrade of a reverse break-up fee of $17.5 million if Chemtrade's
financing condition is not met. Full details of the Transaction,
including additional disclosure on MET, will be included in the
management information circular of Marsulex to be mailed to Marsulex
securityholders in due course. Shareholders are urged to read the
management information circular once it is available. The full text of
the Arrangement Agreement will be available at www.sedar.com.
TD Securities Inc., CIBC World Markets Inc. and Houlihan Lokey acted as
financial advisors to Marsulex. GMP Securities Inc. acted as financial
advisor to the board of Marsulex and provided a fairness opinion.
Stikeman Elliott LLP acted as legal counsel to Marsulex.
Marsulex is a leading provider of industrial services, primarily
environmental compliance solutions for air quality control and
hazardous waste streams produced in petroleum refineries and
petrochemical plants, and a leading producer and marketer of
sulphur-based industrial and water treatment chemicals. Marsulex's
products and services are provided to a broad base of customers in a
wide range of industries but with a major focus in the petroleum
extraction, petroleum refining, pulp and paper, and chemical
industries. Increasingly stringent environmental compliance regulations
have created opportunities for Marsulex to apply its core competency of
operating small to medium size chemical plants efficiently and safely.
Investis, incorporated under the General Corporation Law of the State of
Delaware, is a wholly owned subsidiary of Marsulex. Investis holds all
of the issued and outstanding shares of Marsulex's Marsulex
Environmental Technologies operations.
MET provides environmental systems and services, primarily air quality
compliance, to electric utilities, petrochemical and general industrial
customers worldwide that combust sulphur bearing fossil fuels or
otherwise create sulphur oxide pollutants in their operating plants'
processes. MET's systems and services enable them to cost effectively
remove these and other pollutants from their air emissions to meet
environmental regulations as well as achieve fuel flexibility and
access to the savings of using lower cost, high-sulphur fuels and
derive revenues from the sale of by-products such as commercial quality
calcium sulphate (gypsum) and ammonium sulphate fertilizer.
Caution Concerning Forward-Looking Statements
This news release contains forward-looking statements relating to the
proposed acquisition of Marsulex Inc., including statements regarding
the completion of the proposed transaction and other statements that
are not historical facts. Such forward-looking statements are subject
to important risks, uncertainties and assumptions. The results or
events predicted in these forward-looking statements may differ
materially from actual results or events. As a result, you are
cautioned not to place undue reliance on these forward-looking
The completion of the proposed transaction is subject to a number of
terms and conditions, including, without limitation: (i) applicable
governmental authorities approvals, (ii) required Marsulex shareholder
approval, (iii) necessary court approvals, and (iv) certain termination
rights available to the parties under the Arrangement Agreement. These
approvals may not be obtained, the other conditions to the transaction
may not be satisfied in accordance with their terms, and/or the parties
to the Arrangement Agreement may exercise their termination rights, in
which case the proposed transaction could be modified, restructured or
terminated, as applicable.
The forward-looking statements contained in this news release are made
as of the date of this release. We disclaim any intention and assume no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
Additionally, we undertake no obligation to comment on expectations of,
or statements made by, third parties in respect of the proposed
transaction. For additional information with respect to certain of
these and other assumptions and risks, please refer to the related
material change report and the Arrangement Agreement to be filed by
Marsulex Inc. with the Canadian securities commissions (available at www.sedar.com).
SOURCE Marsulex Inc.
For further information:
Laurie Tugman or William Martin
President and CEO Chief Financial Officer
Tel: (416) 496-4157 Tel: (416) 496-4164