ADS submits proposal to privatize the corporation to its shareholders



    SAINT-ELZEAR-DE-BEAUCE, QC, Jan. 12 /CNW Telbec/ - The Board of Directors
of ADS Inc. ("ADS") (TSX: AAL.A) announced today that ADS has concluded a
merger agreement (the "Merger Agreement") and an amalgamation agreement (the
"Amalgamation Agreement") with 7097697 Canada Inc. ("Newco") relating to the
amalgamation of ADS and Newco (the "Amalgamation").
    Newco is a recently incorporated corporation whose outstanding shares are
currently held by 4076508 Canada Inc., a corporation whose outstanding shares
are all held by management corporations controlled by Messrs. Paul Drouin, Guy
Drouin and René Drouin, all of whom are shareholders, directors and senior
officers of ADS.
    Under the terms and conditions of the Merger Agreement and the
Amalgamation Agreement, ADS will amalgamate with Newco and ADS shareholders,
except for dissenting shareholders, if any, and Newco, will receive a
redeemable preferred share of the corporation resulting from the Amalgamation
for each Class A Multiple Voting Share (the "ADS Shares") that he held
immediately before the Amalgamation. Each redeemable preferred share of the
corporation resulting from the Amalgamation will then be redeemed by the
corporation resulting from the Amalgamation on the first business day
following the Amalgamation through a payment of $0.90 in cash (the "Redemption
Price"). The Redemption Price represents a premium of 28.6% over the closing
price of $0.70 per ADS Share on the TSX on January 9, 2009 and also represents
a premium of 55.17% over the 20-day volume weighted average trading price of
about $0.58 per ADS Share on the TSX.
    The transaction will be completed by way of an amalgamation under the
Canada Business Corporations Act and will be subject to customary conditions
precedent, including approval of the Amalgamation by ADS and Newco
shareholders.
    The Caisse de dépôt et placement du Québec, Howson Tattersall Investment
Counsel Limited (a member of the Mackenzie Financial Corporation Group),
Foyston, Gordon & Payne Inc., Gestion Roger Simard Ltée and Mr. Roger Simard
who own, directly or indirectly, or exercise control or direction over 30.61%
of the issued and outstanding ADS Shares, have signed support and voting
agreements pursuant to which they have agreed, subject to certain conditions,
to exercise the voting rights attached to their ADS Shares in favour of the
Amalgamation.
    Messrs. Paul Drouin, René Drouin, Guy Drouin, Christian Bernard, Fernand
Bernard and Guy Bérubé who hold, directly or through management corporations
(collectively the "Interested Shareholders"), 46.89% of the issued and
outstanding ADS Shares, have also concluded a support and voting agreement
pursuant to which they have agreed to exercise the voting rights attached to
their ADS Shares in favour of the Amalgamation and to transfer to Newco, prior
to the Amalgamation, the aggregate of ADS shares that they hold in exchange
for voting and participating shares of Newco.
    After due consideration, the Board of Directors of ADS has unanimously
approved the Amalgamation (with interested directors abstaining from the vote
due to their interest in Newco) based on the report and the unanimous
favourable recommendation of an independent committee comprised of three
independent members of the Board of Directors of ADS, Messrs. Jean-Yves
Leblanc (committee chair), Gilles Laurin and Laurier Boivin (the "Independent
Committee"). In doing so, the Board of Directors of ADS found that the
Amalgamation is fair to ADS shareholders, other than the Interested
Shareholders (the "Public Shareholders"), and is in the best interests of ADS,
and has agreed to submit the Amalgamation for approval to ADS shareholders at
a special meeting to be held on February 20, 2009 (the "Special Meeting"). The
Board of Directors of ADS has also unanimously resolved (with the interested
directors abstaining from the vote) to recommend that the Public Shareholders
vote in favour of the Amalgamation.
    The Board of Directors of ADS and the Independent Committee have based
their respective decisions, among other things, on an opinion of Ernst & Young
LLP ("Ernst & Young"), the financial advisor retained by the Independent
Committee, which found, as at January 12, 2009 and subject to the limitations,
assumptions and qualifications set forth therein, that the Amalgamation is
fair, from a financial point of view, to the Public Shareholders. A copy of
Ernst & Young's fairness opinion that has been considered by the Board of
Directors of ADS and the Independent Committee as well as other material
information will be included in the Management Proxy Circular to be forwarded
to ADS shareholders regarding the Special Meeting.
    To be completed, the Amalgamation must be approved by way of a special
resolution (the "Special Resolution") of ADS and Newco shareholders whereby
the Amalgamation Agreement is adopted. As regards ADS, the Special Resolution
must be approved at the Special Meeting by: (i) the affirmative vote of at
least 66 2/3% of the votes cast by ADS shareholders and (ii) the simple
majority of the votes cast by the Public Shareholders, in each case, present
in person or represented by proxy and qualified to vote at this meeting.
    Subject to the necessary approvals of ADS and Newco shareholders being
obtained and subject to other customary conditions precedent being met, the
Amalgamation should be completed on or about February 23, 2009.
    In order to finance the Redemption Price, the Interested Shareholders
have received from the Solidarity Fund QFL (the "Fund") a letter of commitment
pursuant to which the Fund has agreed to subscribe Newco shares in the amount
of $3,600,000 and a debenture to be issued by Newco in the amount of
$5,400,000. The balance of the financing required to settle the Redemption
Price will be provided by credit facilities extended by two financial
institutions. Once the Amalgamation has been completed, it is anticipated that
the Interested Shareholders and the Fund own all of the voting and
participating shares issued and outstanding of the corporation resulting from
the Amalgamation on a pro rata basis of 69.06% and 30.94%, respectively.
    Once the Amalgamation has been completed, the corporation resulting from
the Amalgamation will own all of the property, rights and assets of ADS and
Newco and will assume all of their obligations. The corporation resulting from
the Amalgamation will be named "ADS Inc." and will have its head office at 485
des Erables, Saint-Elzéar-de-Beauce, Quebec, G0S 2J0.
    Copies of the Merger Agreement, the Amalgamation Agreement and the
support and voting agreements will be filed with Canadian securities
regulatory authorities and will be available for consultation on SEDAR's web
site, at www.sedar.com. The Management Proxy Circular relating to the Special
Meeting should be mailed to ADS shareholders in the weeks to come. This
circular will also be part of ADS' public documents available for consultation
at www.sedar.com.

    ABOUT ADS

    ADS, whose head office is based in Beauce, near Quebec City, is a
corporation active primarily in the manufacturing sector through subsidiaries
operating in the technical textiles field. For more information about ADS,
please visit the corporation's web site at www.adsinc.ca.

    ABOUT THE FUND

    With net assets of $6.2 billion as at November 30, 2008, the Fund is a
development capital company that through its RRSP channels the savings of
Quebecers into investments in all sectors of the economy to help create and
maintain jobs and to further Québec's economic growth. The Fund is a partner,
either directly or through its network members, in 1,881 companies. It
currently has more than 571,000 shareholders and has helped, on its own or
with other financial partners, to create, maintain and protect over 126,000
jobs. For more information, visit www.fondsftq.com.

    FORWARD-LOOKING STATEMENTS

    This press release contains "forward-looking statements" within the
meaning of the applicable securities legislation regarding the proposal to
privatize ADS, including the statement regarding the terms of the proposed
transaction. Therefore, readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of ADS to be materially different from
any future results, performance or achievements expressed or implied by the
forward-looking statements in this press release. These risks and
uncertainties include, but are not limited to, the satisfaction of the
conditions to consummate the Amalgamation, including the approval of the
Special Resolution by the shareholders, the occurrence of any event, change or
other circumstances that could give rise to termination of the Merger
Agreement and Amalgamation Agreement, a delay in the consummation of the
Amalgamation or failure to complete the Amalgamation for any other reason, the
amount of the costs, fees, expenses and charges related to the Amalgamation,
and the risks associated with general economic conditions. The forward-looking
statements in this press release are made as of the date of this press release
and, except as required by law, ADS disclaims any obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information or future events.




For further information:

For further information: Mr. Paul Drouin, Chairman of the Board; Mr. Guy
Drouin, President and Chief Executive Officer, (418) 387-3383; Source: ADS
Inc.

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ADS Inc.

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