/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
HALIFAX, Feb. 20 /CNW Telbec/ - (TSXV: KUT.P) RediShred Capital Corp.
("RediShred" or the "Corporation"), a capital pool company listed on the TSX
Venture Exchange (the "TSXV") has agreed to acquire the Proshred U.S
franchising business (the "Acquisition") for an aggregate purchase price of
approximately $5.3 million (subject to customary adjustments). The purchase
price for Proshred will be paid with a combination of cash and common shares
from treasury of RediShred, to be determined upon finalization of the private
placement described below. The Acquisition is intended to serve as the
Corporation's Qualifying Transaction pursuant to the policies of the TSXV and
remains subject to the approval of the TSXV. The closing of the Qualifying
Transaction is expected to occur during the current quarter. The Corporation
intends to list on the TSXV as a Tier 2 industrial issuer upon completion of
the Qualifying Transaction.
Proshred franchises the right in the United States and internationally
outside of Canada to sell on-site services for the destruction and disposal of
documents and other sensitive and confidential materials under the trademark
PROSHRED(R). Its customers are primarily businesses and other organizations
that need to maintain the confidentiality of their proprietary information,
whether for competitive reasons, to comply with legal requirements or
otherwise. Proshred allows business customers and individual customers to
witness the destruction of their selected paper documents, computer disks and
other media that contain sensitive and confidential proprietary information.
Following closing, RediShred also intends to seek out additional shredding
businesses for acquisition or investment. It is intended that additional
shredding businesses would be re-branded with the Proshred name.
In order to partially finance the purchase price, RediShred is conducting
a private placement (the "Offering") of common shares of the Corporation. The
price and aggregate amount of the Offering is currently being negotiated.
Canaccord Capital Corporation has agreed to act as agent in Canada under the
Offering, on a best efforts basis. Certain insiders of the Corporation may
purchase, in the aggregate, less than 25% of the common shares sold under the
The acquisition agreement was originally dated November 28, 2007, and is
subject to further amendments which the parties have agreed in principle. The
vendor of Proshred under the agreement is Professional Shredding Partnership,
a partnership established under the laws of Ontario. Pursuant to the
Acquisition, RediShred will acquire from the vendor all of the outstanding
shares of Professional Shredding Corporation, a corporation formed in Ontario,
Canada. Professional Shredding Corporation owns all of the outstanding shares
of Proshred Franchising Corp., a Delaware corporation which currently carries
on the Proshred franchise business, and will acquire certain assets from
Professional Shredding Partnership immediately prior to closing. RediShred
will also hire certain employees who provide services to Proshred from Heron
Capital Corporation, a partner of Professional Shredding Partnership. Neither
Professional Shredding Corporation nor Proshred Franchising Corp. has any
No insiders of the Corporation have any beneficial interest in or control
over the vendor and the Acquisition is therefore an arm's length transaction.
Brad Foster is a director and a 5% shareholder of RediShred and a director and
officer of Heron Capital Corporation but does not directly or indirectly own
any shares of Heron Capital Corporation and does not have any equity interest
in the vendor. Hugh Heron is a technical consultant and a 5% shareholder of
RediShred and an officer and director of Heron Capital Corporation and
indirectly has approximately a 21% beneficial equity interest in the vendor
and indirectly has a one-third controlling interest in the vendor. John
Prittie is a technical consultant and a 7.5% shareholder of RediShred and an
officer and director of Heron Capital Corporation and is an indirect minority
shareholder of the vendor with approximately a 7% non-controlling beneficial
Proshred currently has 17 franchisees offering service in 16 states. The
following table sets out certain financial information for the Proshred
12 Months 6 Months
September 30, March 31, March 31, March 31,
2007 2007 2006 2005
-------------- -------------- ------------- ------------
Total Revenues $386,494 $851,983 $318,954 $88,797
Net Income (Loss) ($328,737) ($656,714) ($950,006) ($453,677)
Total Assets (1) $383,039 $583,587 $346,697 $356,344
(1) As at the last day of the applicable period.
As a result of the Qualifying Transaction, the following persons will be
added as directors and/or officers of RediShred:
John Prittie will become a director and the new President and Chief
Executive Officer of RediShred. Mr. Prittie has been President of Proshred
Franchising Corp. and of PSP Corporation since September 2004. Since July
1997, he has been President and Chief Executive Officer of Heron Capital
Corporation and since November 2004 he has been President of PMP Corporation
and TMT Franchising Corp., other franchising business which are controlled by
Heron Capital Corporation. He is responsible for the overall operations of
these companies, all of which are located in Toronto, Ontario. Mr. Prittie
served as Director of Mini-Tankers USA, Inc. from June 1999 to January 2003,
and as President of Mini-Tankers USA, Inc. from June 1999 to June 2003. He was
Vice President of Franchise Development for Shred-it from April 1993 to May
1997. Mr. Prittie is currently a consultant to RediShred and owns
approximately 840,000 or 8.4% of the outstanding RedShred shares as well as
100,000 options to acquire additional RediShred shares.
Hugh Heron will become a director of RediShred. Mr. Heron has been
Chairman of the Board of Proshred Franchising Corp. and PSP Corporation since
May 2006. From October 2004 until May 2006, Mr. Heron was Vice Chairman of the
Board of Proshred Franchising Corp. and PSP Corporation. Mr. Heron is also
President of Heron / Heathwood Homes, a position he has held since 1979. He
holds and has held each of these positions in Toronto, Ontario. Mr. Heron is
on the Board of Viceroy Homes Limited (TSX VHL.A). He is currently a
consultant to RediShred and owns approximately 590,000 or 5.9% of the
outstanding RedShred shares as well as 100,000 options to acquire additional
Jeffrey Hasham will become the new Chief Financial Officer of RediShred.
Mr. Hasham became the Vice President of Finance of Proshred Franchising Corp.
in March 2005. From 2004 to 2005, Mr. Hasham was Vice President of Finance at
World Vintners Inc., in Markham, Ontario, Canada. From 2002 to 2004,
Mr. Hasham was the Chief Financial Officer at Mini-Tankers USA, Inc. in
Mississauga, Ontario, Canada. Mr. Hasham received his MBA degree from McMaster
University in 1996 and his CA designation in 1999. He owns or exercises
control or direction over approximately 135,000 or 1.35% of the outstanding
Tim Tibbs will become the new Chief Operating Officer of RediShred.
Mr. Tibbs is Executive Vice-President Operations for Proshred Franchising
Corp. and has been affiliated with The Heron Group of Companies since October
1999. Mr. Tibbs was previously Director of Business Development for
Mini-Tankers USA, Inc. from September, 1999 to April, 2004. Prior to joining
The Heron Group of Companies, Mr. Tibbs was Director of Operations for
Shred-it from April, 1994 to September, 1999. Mr. Tibbs also has industry
experience in the following franchise systems: Firestone Tire & Automotive,
Shred-It and Mini-Tankers. Mr. Tibbs received an Honours Bachelor of Business
Administration (BBA) from Wilfred Laurier University.
Mark MacMillan, currently the President and Chief Executive Officer of
RediShred, will become the Executive Vice President for RediShred. Other
directors of RediShred are Robert M. Crozier, Brad E. Foster, Philip D.
Fraser, Phillip H. Gaunce, James C. Lawley, Mark J. MacMillan and Robert G.
Richardson. The background of each of these persons is contained in the
initial public offering prospectus of the Corporation dated August 21, 2007,
which is available on the SEDAR website at www.sedar.com.
RediShred Capital Corp.
RediShred is a capital pool company listed on the TSXV. The principal
business of the Corporation is the identification and evaluation of assets or
businesses with a view to completing a Qualifying Transaction. The Corporation
has not commenced commercial operations and has no assets other than cash.
This press release contains forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of words such
as "plans", "expects" or "does not expect", "is expected", "estimates",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Corporation to be materially different from
any future results, performance or achievements expressed or implied by the
forward-looking statements. Examples of such statements include the intention
to complete the Acquisition, the Offering and the Qualifying Transaction of
the Corporation. Actual results and developments are likely to differ, and may
differ materially, from those expressed or implied by the forward-looking
statements contained in this press release. Such forward-looking statements
are based on a number of assumptions which may prove to be incorrect,
including, but not limited to: the ability of the Corporation to obtain
necessary financing; satisfy conditions under the Acquisition agreement;
satisfy the requirements of the TSXV with respect to the Acquisition, the
Offering, the Qualifying Transaction; the level of activity in the shredding
business and the economy generally; consumer interest in the Corporation's
services and products; competition; and anticipated and unanticipated costs.
While the Corporation anticipates that subsequent events and developments may
cause the Corporation's views to change, the Corporation specifically
disclaims any obligation to update these forward-looking statements. These
forward-looking statements should not be relied upon as representing
Corporation's views as of any date subsequent to the date of this press
release. Although the Corporation has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The factors identified
above are not intended to represent a complete list of the factors that could
affect the Corporation. Additional factors are noted under "Risk Factors" in
the Corporation's initial public offering prospectus dated August 21, 2007, a
copy of which may be obtained on the SEDAR website at www.sedar.com.
Completion of the Qualifying Transaction is subject to a number of
conditions, including but not limited to, TSXV acceptance and, if applicable
pursuant to TSXV requirements, majority of the minority shareholder approval.
Where applicable, the Qualifying 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
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.
For further information:
For further information: Mark J. MacMillan, Chief Executive Officer,
RediShred Capital Corp., (902) 406-3347