BELLAIR VENTURES INC. ENTERS INTO DEFINITIVE AGREEMENT FOR PROPOSED QUALIFYING TRANSACTION WITH R. DIBATTISTA INVESTMENTS INC.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

TSX Venture Exchange Symbol: BVI.P

TORONTO, Feb. 3 /CNW/ - Bellair Ventures Inc. ("Bellair"), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange Inc.'s (the "Exchange") Corporate Finance Manual), is pleased to announce that it has entered into a definitive agreement (the "Agreement") dated February 1, 2011 with KNR Management Inc. ("KNR") and R. DiBattista Investments Inc. ("RDII"), the sole shareholder of KNR as at the date hereof, to acquire all of the issued and outstanding common shares (each, a "KNR Share") in the capital of KNR.  Such acquisition is proposed to constitute Bellair's Qualifying Transaction, as defined in the CPC Policy (the "Proposed Transaction").

The Proposed Transaction is to be effected, in part, by way of share exchange, whereby Bellair will acquire the KNR Shares from (a) RDII in exchange for 4,000,000 common shares in the capital of Bellair (the "Bellair Shares"), and (b) certain employees, consultants and/or other investors who will acquire KNR Shares prior to the closing of the Proposed Transaction, in exchange for approximately 200,000 Bellair Shares. In addition, a portion of the consideration for the Proposed Transaction will be the retirement of the Loan (as defined below) plus accrued interest thereon.

Bellair and RDII cooperated in structuring the Proposed Transaction, which may vary from the foregoing structure on the basis of tax, securities, corporate law and other advice in order to ensure the most efficient structure for the parties to the Agreement (the "Parties").

About RDII:

RDII was incorporated under the laws of the province of Ontario. RDII's head and registered office is located at 3875 Keele Street, Toronto, Ontario, M3J 1N6.

The sole shareholder of RDII is Romeo DiBattista Sr. of Toronto, Ontario.

About KNR:

KNR was incorporated under the laws of the province of Ontario under the name "KNR Management Inc."  KNR's head and registered office is located at 10525 Keele Street, Maple, Ontario, L6A 3Y9. 

KNR is (or will be prior to the closing of the Proposed Transaction (the "Closing")) the registered, legal and beneficial owner of all of the issued and outstanding shares of each of: The KNR Group Inc., Keele North Recycling Inc., KNR Equipment Inc., KNR Services Ltd., and 2260225 Ontario Inc. (collectively, the "Subsidiaries").  Upon Closing, KNR will be a diversified environmental services business operating through the Subsidiaries a waste transfer and recycling business, waste bin hauling and disposal business, demolition and remediation services and a safety monitoring systems business, with all operations conducted out of its facility in Vaughan, Ontario.

Terms of the Proposed Transaction:

The aggregate consideration payable by Bellair to RDII pursuant to the Agreement is approximately $5,250,000, subject to adjustment in accordance with the terms of the Agreement.  Bellair will acquire the KNR Shares from RDII in exchange for 4,000,000 Bellair Shares, the retirement of the Loan plus accrued interest, and assumption by Bellair in KNR of debt obligations totalling approximately $3,000,000

Prior to Closing, certain employees and consultants of KNR will receive KNR Shares as partial consideration for services provided to KNR and certain other persons may subscribe for KNR Shares pursuant to a private placement financing.  Bellair will also acquire such KNR Shares, with an aggregate value of approximately $100,000, in exchange for issuing to the holders of such KNR Shares an aggregate of approximately 200,000 Bellair Shares.

Upon Closing, KNR will be a wholly-owned subsidiary of Bellair (which, following the Closing, will be the "Resulting Issuer").  Bellair will serve as a public vehicle to raise capital and will provide strategic and financial advice and share capital for additional acquisitions. Bellair will not be involved in the day-to-day management of the operations of KNR and KNR will control any further acquisitions made under it.

The proforma consolidated revenues for KNR, reflecting the audited consolidated financial information for the year ended June 30, 2010, was $4,600,000 with an EBITDA of $822,000.

DiBattista Industries Inc. ("DBI") and Bellair entered into a loan agreement dated January 15, 2009, as amended and restated on April 23, 2009 (the "Loan"), pursuant to which Bellair provided a secured loan in the principal amount of $225,000 to DBI in exchange for a demand promissory note from DBI. The Loan, which was made on customary commercial terms and conditions, was entered into in connection with a proposed Qualifying Transaction between DBI and Bellair, which proposed transaction was subsequently terminated. The Loan was used by DBI for expenses, including legal, accounting and audit fees, incurred by DBI in connection with the pursuit of the proposed Qualifying Transaction. The Loan matured on August 31, 2010, and DBI's obligations under the Loan will be assumed by RDII at Closing.  RDII and DBI are each beneficially owned and controlled by Romeo DiBattista Sr.

It is expected that following the Closing, the Resulting Issuer will be a Tier 2 issuer pursuant to the policies of the Exchange. As the Proposed Transaction is not a Non-Arm's Length Qualifying Transaction, as defined in the CPC Policy, it does not require shareholder approval.

Private Placement and Financing:

Concurrently with the Closing, Bellair will complete a brokered private placement (the "Private Placement") of up to 4,000,000 units (each a "Unit") at a subscription price of $0.50 per Unit, for aggregate gross proceeds of up to $2,000,000. Each Unit will be comprised of one Bellair Share and one half of a share purchase warrant (a "Warrant").  Each Warrant will entitle the holder thereof to acquire one Bellair Share at an exercise price of $0.75 per share, within 24 months from the date of issuance (such exercise price is subject to adjustment prior to completion of the Private Placement, with the prior approval of the Exchange).  The Private Placement will be on terms and conditions agreed to by the parties to it and shall be subject to the approval of the Exchange.  Canaccord Genuity Corp. has been engaged by Bellair to act as agent for the Private Placement pursuant to an engagement letter dated January 31, 2011.  The agent is entitled to receive as compensation a cash commission equal to ten percent (10%) of the gross proceeds, broker options equal to ten percent (10%) of the Units sold and a corporate finance fee of $50,000, as well as the reimbursement of its reasonable expenses.

Pursuant to the Agreement, KNR is required to obtain, prior to Closing, a commitment from a major Canadian bank to advance or make available financing of up to $2,250,000 (the "Financing").  The Financing will be secured against all assets and undertakings of KNR and/or its Subsidiaries, as applicable, and in any other manner acceptable and agreed to by the parties to the Financing.

The Parties anticipate that the proceeds from the Private Placement and Financing will be used towards:

  • financing ongoing working capital requirements and for general corporate purposes; and
  • repayment of debt held by KNR.

Share Capital:

The authorized capital of KNR consists of an unlimited number of KNR Shares, of which no more than 72,649 KNR Shares will be issued and outstanding as at the Closing. There are no outstanding securities of KNR convertible into or exercisable or exchangeable for KNR Shares, and no such securities are otherwise issuable. 

The authorized capital of Bellair consists of an unlimited number of Bellair Shares, of which 2,556,600 Bellair Shares are issued and outstanding. Other than in connection with the Transaction and the Private Placement, there are no outstanding securities of Bellair convertible into or exercisable or exchangeable for Bellair Shares, and no such securities are otherwise issuable, other than outstanding options to acquire an aggregate of 255,660 Bellair Shares (expiring on November 24, 2013).

Immediately following the Closing, it is expected that (i) there will be approximately 10,756,600 issued and outstanding common shares of the Resulting Issuer (the "Resulting Issuer Shares"), (ii) RDII will hold an aggregate of 4,000,000 Resulting Issuer Shares (or approximately 37% of the Resulting Issuer Shares), and (iii) certain KNR employees and consultants will hold, in the aggregate, approximately 200,000 Resulting Issuer Shares (or approximately 2% of the Resulting Issuer Shares). 

Sponsorship:

Sponsorship of the Qualifying Transaction of a capital pool company is required by the Exchange, unless an exemption is obtained in accordance with Exchange policies.  Bellair intends to comply with such policies and anticipates that it will be eligible to obtain the applicable exemptions in connection with sponsorship.

Proposed Directors, Officers and Insiders of the Resulting Issuer:

It is currently expected that following the Closing, the directors and officers of Bellair will be: Emlyn David as director, President, Chief Executive Officer and Corporate Secretary; Rajiv Rai as director; Keith Stein as director; and Michael Galloro as Chief Financial Officer. The directors and officers of KNR are expected to be: Emlyn David as director and Romeo DiBattista Jr. as director, President and Chief Executive Officer.

Emlyn David:

Emlyn J. David has had over 20 years of investment analysis and corporate financial management experience.  Since June 2006, Mr. David has been Managing Partner of Cangap Capital Corp., a niche merchant bank.  Mr. David has also acted as President of Fareport Capital Inc. and President and director of Chudleigh Ventures Inc., and has been actively involved in managing a portfolio of private equity investments in media, business aviation and transportation.  Mr. David initially began working as a Corporate Financial Manager with a large public real estate company, Cambridge Shopping Centers.  Subsequent to that, Mr. David co-founded a niche real estate investment banking group within a large national brokerage firm. 

Rajiv Rai:

Rajiv Rai has over 15 years of business experience with leadership and cross-functional expertise in sales, customer service and operations management in the mobile communications, internet video, computer animation and motion picture sectors. Mr. Rai began his career with Rogers Communications Inc.  Mr. Rai also successfully built Fastvibe, a video streaming business that was eventually sold to Rogers Communications Inc. He has also served in executive roles at C.O.R.E Feature Animation.  Mr. Rai is currently a member of the board of the OnexOne charitable foundation, Mint Technology Corp., Zoolander Corporation and I See Media Inc. 

Keith Stein:

Keith Stein has been a lawyer with Heenan Blaikie LLP since December 2008.  Prior to joining Heenan Blaikie LLP, Mr. Stein was an executive with Magna International Inc., where he continues to act as a consultant reporting to the Executive Vice-Chairman. Prior to this appointment, Mr. Stein held the positions of Vice-President, Corporate Affairs and Senior Vice President, Corporate Affairs for Magna International Inc.  Before joining Magna International Inc., Mr. Stein was Senior Corporate Counsel for Toyota Canada and Toyota Credit Canada. Mr. Stein graduated from the Osgoode Hall Law School in 1987, articled with a major law firm and was called the Bar of Upper Canada in 1989.

Michael Galloro:

Michael Galloro is a Chartered Accountant with over 15 years of experience having earned his designation while working for KPMG LLP.  While engaged as VP of Finance for a public company listed on the Toronto Stock Exchange, Mr. Galloro gained significant experience in finance and capital markets, corporate governance, human resources, and administration.  Mr. Galloro pursued a consulting career working on various projects in compliance, valuations, mergers and acquisitions and initial public offerings.  Mr. Galloro is a founding member of ALOE Financial Inc., a corporate finance and CFO solutions company focused on helping to bring private companies to the public markets. 

Romeo DiBattista Jr.:

Romeo DiBattista Jr. has over 15 years business experience operating, managing and overseeing many of his family's diverse operating and investment interests in diverse industries, including, meat processing, concrete forming and real estate development. Mr. DiBattista also founded and sold a construction/demolition and earth moving company to a Toronto Stock Exchange listed issuer in 2004.

Romeo DiBattista Sr.:

Romeo DiBattista Sr. is the principal shareholder of RDII, the vendor in the sale transaction with Bellair.  Mr. DiBattista is an established businessman, having founded, operated and sold various businesses for the past 50 years.  During his career, Mr. DiBattista has invested in, and operated businesses in a variety of industries, including, meat processing, concrete forming and real estate development.  He is a prominent member of the business community in Toronto.

Conditions to Closing:

The Closing is subject to satisfaction or waiver of terms and conditions, customary or otherwise, including but not limited to: (i) the satisfaction of all conditions precedent to the Private Placement, (ii) KNR obtaining the Financing, and (iii) acceptance by the Exchange of the Proposed Transaction and each party obtaining all necessary authorizations and regulatory approvals and third party consents. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval.  Where applicable, the transaction cannot close until the required shareholder approval is obtained.  There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon.  Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Certain information in this press release may contain forward-looking statements.  This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict.  Actual results may differ materially from results inferred or suggested in any forward-looking statements.  Bellair assumes no obligation to update the forward-looking statements, or to update the reasons why actual results may differ from those reflected in forward-looking statements unless and until required by applicable securities laws.  Additional information identifying risks and uncertainties is contained in Bellair's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Bellair Ventures Inc.

For further information:

Bellair Ventures Inc.
Emlyn J. David
President and Chief Executive Officer
(416) 840 5002

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