CALGARY, April 22 /CNW/ - Enerchem International Inc. ("Enerchem" or the "Corporation") announced today that that it has entered into a pre-acquisition agreement (the "Agreement") with a private Canadian company (the "Offeror") pursuant to which the Offeror will offer to acquire all of the issued and outstanding common shares ("Common Shares") of Enerchem (the "Offer") by way of a take-over bid. The consideration to be offered for each Common Share under the Offer will be $2.75 cash per Common Share, which represents a 47% premium over the closing price of Enerchem on April 21, 2010. The total purchase price offered by the Offeror will be approximately $41.6 million.
The Board of Directors of Enerchem (the "Board") has unanimously approved the Offer and has concluded that the transaction is in the best interests of Enerchem and recommends that Enerchem shareholders tender their shares in acceptance of the Offer.
Cormark Securities Inc. acted as financial advisor to Enerchem in connection with the Offer and has provided a verbal fairness opinion to the Board indicating that the cash consideration to be received by Enerchem shareholders under the Offer is fair from a financial point of view to the shareholders of Enerchem.
Pursuant to the Agreement the Board has agreed that neither the Corporation nor any of its directors, officers, employees, agents, financial advisors, legal advisors or other representatives shall, directly or indirectly solicit or initiate discussions or negotiations with any third party in respect of any matter or thing which is inconsistent with the successful completion of the Offer, including any business combination transaction involving Enerchem. Enerchem has granted the Offeror the right to match any subsequent offer and has agreed to pay the Offeror a non-completion fee of $1.75 million in certain circumstances.
The Offeror anticipates mailing the Offer to all registered Enerchem shareholders as soon as practicable and the Offer will expire approximately 35 days following such mailing date. The Offer will be subject to a number of conditions, including acceptance by holders of at least 662/3% of the outstanding Common Shares. All of the directors and officers and certain shareholders of Enerchem, collectively holding approximately 27.2% of the issued and outstanding Common Shares (on a fully-diluted basis), have entered into agreements to tender all of their Common Shares to the Offer, except in certain limited circumstances.
Raymond James Ltd. acted as financial advisor to the Offeror in connection with the Offer.
Enerchem treats, manufactures and distributes hydrocarbon drilling, fracturing, and solvents fluids designed to facilitate and enhance the production of upstream oil and gas companies. The Corporation is also engaged in energy marketing and, through its wholly-owned subsidiary Corporation, Millard Trucking Ltd., provides fluid transportation and other related oilfield services. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "ECH".
Forward Looking Information
This press release contains statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information includes, amongst other things, statements regarding: the Offer, the completion of the Offer and the outcome of the Offer and other expectations, beliefs, plans, objectives, assumptions, information and statements about possible future events, and conditions.
Various assumptions were used in drawing the conclusions contained in the forward-looking information contained in this press release. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Enerchem and described in the forward-looking information contained in this press release. Undue reliance should not be placed on forward-looking information. The material risk factors include, but are not limited to: failure to complete the Offer; the possibility that government policies or laws may change or governmental and/or regulatory approvals may be delayed or withheld; and changes in tax laws. Readers are cautioned that the foregoing list of risk factors is not exhaustive.
Forward-looking information is based on the estimates and opinions of Enerchem management at the time the information is released.
SOURCE ENERCHEM INTERNATIONAL INC.
For further information: For further information: Kenneth M. Bagan, President and Chief Executive Officer, Telephone: (403) 269-1500, Fax: (403) 269-1559, Email: firstname.lastname@example.org; Kim R. Hubick, Vice-President Finance & CFO, Telephone: (403) 269-1500, Fax: (403) 269-1559, Email: email@example.com