TORONTO, July 16, 2013 /CNW/ - Jovian Capital Corporation ("Jovian") (TSX: JOV) today announced that it has entered into a definitive
arrangement agreement (the "Agreement") whereby Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance") would acquire all of the issued and outstanding common shares in the
capital of Jovian for $10.23 in cash per share (the "Cash Consideration") or 0.2386 of a common share of Industrial Alliance (the "Exchange Ratio"), or a combination thereof, subject to pro-ration based upon the
issuance of a maximum of 35% of the aggregate consideration payable in
Industrial Alliance common shares. The Cash Consideration represents a
premium of 46% to the closing price of Jovian's common shares on the
Toronto Stock Exchange ("TSX") on July 15, 2013 (the "Calculation Date") and a 46% premium based on the five-day volume weighted average
trading price ("VWAP") ending on the Calculation Date of Jovian's common shares. The
Exchange Ratio was calculated by dividing the amount of the Cash
Consideration by the five-day VWAP on the Calculation Date of
Industrial Alliance's common shares.
The acquisition will be completed pursuant to a statutory plan of
arrangement (the "Arrangement"). The Agreement contains customary representations, warranties and
covenants for an agreement of this nature provided by each party and is
conditional on the completion of a number of obligations and conditions
(including securityholder, regulatory and contractual approvals and
consents) to be satisfied by the parties up to and including the
closing date, which is anticipated to be on or about October 1, 2013.
The Agreement contains a termination fee of $4 million payable by
Jovian to Industrial Alliance in certain circumstances, including in
the event of Jovian's acceptance of a superior proposal prior to
closing. If the Agreement is terminated by either Jovian or Industrial
Alliance, in certain circumstances as set out in the Agreement, an
expense reimbursement will be payable to the other party in the amount
of $1.25 million in the case of termination by Jovian and $1.25 million
in the case of termination by Industrial Alliance.
"We are pleased to have reached this agreement with Industrial Alliance
which we believe is a good transaction for our shareholders," said Philip Armstrong, CEO of Jovian. "The purchase price represents a significant premium to the current
market price of our common shares, allowing our shareholders to harvest
the economic value of our enterprise."
"The Jovian operating companies each bring distinctive and unique
products and service expertise that complement our existing wealth
management platform," stated Yvon Charest, President and Chief Executive Officer of Industrial
Alliance, one of Canada's leading insurance and financial services
companies. "We look forward to working with them to expand our products and services
to current distribution partners as well as extending that offering to
broader distribution channels."
"We have a great portfolio of companies, with established brands," added Mark Arthur, President of Jovian. "Industrial Alliance recognizes the value of our strong, unique,
independent brands and intends to continue to operate the majority of
the Jovian companies as independent brands, while providing a national
distribution platform and the capital to allow these companies to
achieve their significant growth potential."
Jovian plans to convene a joint special meeting of its shareholders and
debentureholder to consider the Arrangement in September, and it is
anticipated that an information circular containing detailed disclosure
regarding the Arrangement will be mailed to Jovian's shareholders and
debentureholder in August. The Arrangement will require the approval of
662/3% of Jovian's shareholders, 662/3% of the holders of Jovian's Series A subordinated unsecured convertible
debentures due June 30, 2015 (the "Debentures") and a majority of votes cast by minority shareholders, in accordance
with the terms of the order(s) to be granted by the Ontario Superior
Court of Justice and pursuant to the Canada Business Corporations Act and Multilateral Instrument 61-101 "Protection of Minority Security
Holders in Special Transactions". The principal amount of the
Debentures that are issued and outstanding is $5 million. Strongwater
Investments Ltd., the major shareholder of Jovian (the "Major Shareholder"), owns all of the issued and outstanding Debentures.
The Major Shareholder and all of the directors and senior management of
Jovian holding, directly and indirectly, an aggregate of approximately
38% of the outstanding Jovian common shares, have signed voting support
agreements pursuant to which such persons will agree to vote in support
of the Arrangement, subject to certain terms and conditions.
The Board of Directors of Jovian (the "Board"), after reviewing, among other things, the recommendation of the
Special Committee of the Board and the advice of its legal and
financial advisors, has unanimously determined that the Arrangement is
in the best interests of Jovian and is fair to its shareholders. The
Special Committee and Board engaged TD Securities Inc. ("TD Securities") to act as its financial advisors and Cassels Brock & Blackwell LLP as
its legal counsel in connection with the transaction. TD Securities has
provided an opinion to the Board that, based upon and subject to the
assumptions, limitations and other considerations, in such opinion, the
consideration to be received by the holders of Jovian common shares
(other than the Major Shareholder and its affiliate) is fair, from a
financial point of view, to such holders.
The Agreement and information circular will be filed and available for
public download at www.sedar.com.
About Industrial Alliance Insurance and Financial Services Inc.
Founded in 1892, Industrial Alliance Insurance and Financial Services
Inc. is a life and health insurance company with operations in all
regions of Canada as well as in the United States. The Company offers a
wide range of life and health insurance products, savings and
retirement plans, RRSPs, mutual and segregated funds, securities, auto
and home insurance, mortgage loans and other financial products and
services for both individuals and groups. The fourth largest life and
health insurance company in Canada, Industrial Alliance contributes to
the financial security of over three million Canadians, employs 4,300
people and has assets under management and administration of more than
$87 billion. Industrial Alliance stock is listed on the Toronto Stock
Exchange under the ticker symbol IAG.
About Jovian Capital Corporation
Jovian acquires, creates and grows financial services companies
specializing in two primary market segments: wealth management and
asset management. The Jovian group of companies (MGI Securities Inc.,
MGI Securities (USA) Inc., T.E. Wealth, Leon Frazer & Associates Inc.,
HAHN Investment Stewards & Company Inc., JovFinancial Solutions Inc.
and Fit Private Investment Counsel Inc.) oversees approximately $6.9
billion of client assets ($5.4 billion in client assets managed or
advised and $1.5 billion in assets under administration). Additional
information is available at www.joviancapital.com and www.sedar.com.
This press release contains "forward-looking statements" within the
meaning of applicable securities laws that are intended to be covered
by the safe harbours created by those laws, including statements that
use forward-looking terminology such as "will", "anticipate",
"believe", "continue", "potential", or the negative thereof or other
variations thereof or comparable terminology. Such forward-looking
statements may include, without limitation, statements regarding the
completion of the proposed transaction and other statements that are
not historical facts. While such forward-looking statements are
expressed by Jovian, as stated in this release, in good faith and
believed by Jovian to have a reasonable basis, they are subject to
important risks and uncertainties including, without limitation,
satisfying the terms and conditions of the Arrangement including the
approval of the Arrangement by Jovian securityholders, court approval
of the Arrangement, the receipt of required governmental and regulatory
approvals and consents, and the satisfaction of conditions, which could
cause actual results to differ materially from future results
expressed, projected or implied by the forward-looking statements. As a
result of these risks and uncertainties, the proposed transaction could
be modified, restructured or not be completed, and the results or
events predicted in these forward-looking statements may differ
materially from actual results or events. These forward-looking
statements are not guarantees of future performance, given that they
involve risks and uncertainties. Jovian is not affirming or adopting
any statements made by any other person in respect of the proposed
transaction and expressly disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except in accordance with
applicable securities or to comment on expectations of, or statements
made by any other person in respect of the proposed transaction.
Investors should not assume that any lack of update to a previously
issued forward-looking statement constitutes a reaffirmation of that
statement. Reliance on forward-looking statements is at investors' own
SOURCE: Jovian Capital Corporation
For further information:
Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or
Mark Arthur, President, Jovian Capital Corporation, (416) 933-5754.