(TSX: SCL.A, SCL.B)
TORONTO, March 1, 2013 /CNW/ - The Special Committee of the Board of
Directors of ShawCor Ltd. (the "Special Committee") is providing an
update today regarding the proposed elimination of ShawCor's dual class
share structure which will be the subject of a shareholder vote at a
special meeting scheduled for March 14, 2013 (the "Special Meeting").
Further information relating to the Special Meeting can be found in the
Company's Management Proxy Circular dated February 11, 2013 (which can
be viewed at www.sedar.com or on the ShawCor website).
The Special Committee is asking all ShawCor shareholders to complete
their proxies and/or to attend at the Special Meeting, and to vote in
favour of the elimination of ShawCor's dual class share structure for
the following reasons:
The reorganization transaction is expected to be accretive to ShawCor
from an earnings per share perspective.
The premium to the current trading price and resulting dilution to Class
A shareholders is within the range of precedents generally seen in
similar types of transactions.
The Special Committee has received a fairness opinion from TD Securities
that the consideration to be paid to the Class B shareholders pursuant
to the transaction is fair, from a financial point of view, to the
Class A and Class B shareholders, other than the controlling
The elimination of the Class B shares, which do not otherwise have a
"sunset" provision, may facilitate future change of control
transactions following the completion of the transaction, as "control"
will be transferred to the general market.
The transaction will result in a widely held single class share
structure, and is expected to diversify ShawCor's shareholder base, as
many investment mandates exclude investment in companies with dual
class share structures, and to increase liquidity and provide for
enhanced financing flexibility going forward.
After completion of the transaction, all remaining shareholders will
receive a $1.00 per share special dividend.
The proforma impact of the proposed transaction on ShawCor's financial
condition as at December 31, 2012, and assuming the transaction was
completed on that date, indicates a total debt to EBITDA ratio of 1.43
to 1, which is quite reasonable particularly given the outlook for
solid EBITDA growth and compared to our peers.
To support the transaction we will issue investment grade senior notes
at an attractive 3.65% interest rate with an average term of over 10
years. Our notes offering was oversubscribed, providing affirmation
that our capital structure, post transaction, is both appropriate and
After the transaction, our cash balances combined with available credit
lines in excess of $165 million will enable us to execute on our growth
Mr. Jack Petch, Chair of the Special Committee remarked, "ShawCor has
just announced record quarterly and annual revenue, EBITDA and net
income. We fully expect that our record backlog of $850 million at
year end, the high level of bid activity and strong industry
fundamentals will lead to continued strong financial performance in
2013. ShawCor's future is bright and the Special Committee strongly
encourages all ShawCor Class A and Class B shareholders to vote in
favour of the Arrangement."
Regardless of the number of shares you own, it is important that you
cast your vote today. If you require assistance with your proxy or
have any questions, please contact Kingsdale Shareholder Services Inc.
at 1-877-657-5859 or by email at email@example.com
This document includes certain statements that reflect management's
expectations and objectives for the Company's future performance,
opportunities and growth, which statements constitute forward-looking
information under applicable securities laws. Such statements, other
than statements of historical fact, are predictive in nature or depend
on future events or conditions. Forward-looking information involves
estimates, assumptions, judgments and uncertainties. These statements
may be identified by the use of forward-looking terminology such as
″may″, ″will″, ″should″, ″anticipate″, ″expect″, ″believe″, ″predict″,
″estimate″, ″continue″, ″intend″, ″plan″ and variations of these words
or other similar expressions.
Forward-looking information involves known and unknown risks and
uncertainties that could cause actual results to differ materially from
those predicted by the forward-looking information. We caution readers
not to place undue reliance on forward-looking information as a number
of factors could cause actual events, results and prospects to differ
materially from those expressed in or implied by the forward looking
information. These statements of forward-looking information are based
on assumptions, estimates and analysis made by management in light of
its experience and perception of trends, current conditions and
expected developments as well as other factors believed to be
reasonable and relevant in the circumstances. These assumptions
include finalization of the Arrangement and the Company's ability to
complete due diligence and to finalize and execute definitive
documentation with its lenders and prospective note holders. The
Company believes that the expectations reflected in the forward-looking
information are based on reasonable assumptions in light of currently
available information. However, should one or more risks materialize
or should any assumptions prove incorrect, the Company can give no
assurance that such expectations will be achieved.
When considering the forward looking information in making decisions
with respect to the Company, readers should carefully consider the
foregoing factors and other uncertainties and potential events. The
Company does not assume the obligation to revise or update forward
looking information after the date of this document or to revise it to
reflect the occurrence of future unanticipated events, except as may be
required under applicable securities laws.
SOURCE: ShawCor Ltd.
For further information:
Jack F. Petch
Chair of the ShawCor Special Committee
William P. Buckley
President & CEO
Gary S. Love
Vice President, Finance and CFO