SEAMARK, GrowthWorks to form new Canadian asset management company
"This has the full support of our portfolio management team and is great news for our clients," said
GrowthWorks President and CEO
Under the agreement, GrowthWorks and SEAMARK will become subsidiaries of Matrix. "Matrix will immediately have a national platform to deliver a diverse suite of investment services and products with top quartile performances in several asset classes" said
SEAMARK (SM:TSX), founded in 1982, will maintain its headquarters in
GrowthWorks, founded in 1998 by
Matrix will have AUM of approximately
The agreement contemplates the exchange of SEAMARK common shares for Matrix common shares on a 1 for 1 basis, followed by the acquisition of all of the outstanding common shares of GrowthWorks in exchange for common shares of Matrix (the "Acquisition Shares"). SEAMARK shareholders are expected to have the option to treat the exchange of SEAMARK common shares for Matrix common shares as a tax free rollover or to elect to treat the exchange as a disposition giving rise to a capital gain or loss.
Assuming all common shares of GrowthWorks are tendered to the share exchange offer or otherwise acquired, the Acquisition Shares will represent 75% of Matrix's issued common share capital on completion of the business combination. The Acquisition Shares will generally be subject to an escrow of four years, during which a maximum of 25% of the shares issued will be released from escrow each year.
Holders of more than 53% of the outstanding common shares of SEAMARK have signed Support Agreements under which they have agreed to vote their shares in favour of the business combination. Holders of more than 74% of the outstanding common shares of GrowthWorks have signed Support Agreements under which they have agreed to tender their shares to the share exchange offer.
Following the completion of the business combination, Matrix is expected to:
- generate significantly greater revenues over a broader range of investment services than SEAMARK operating alone, with the pro forma revenues for the combined companies for the first six months of 2009 being approximately $19.0 million compared to $3.6 million for SEAMARK (unaudited); - generate earnings per share that are significantly greater than could be achieved by SEAMARK in the absence of the transaction; - generate growth in assets under management that are greater than could be achieved by SEAMARK in the absence of the transaction; and - be in a position to initiate a regular quarterly dividend in 2010, subject to approval by the board of directors of Matrix.
The business combination is subject to a number of conditions, including approvals by SEAMARK shareholders, the TSX and securities regulators, and at least 90.1% of the outstanding GrowthWorks common shares being tendered to the share exchange offer. The agreement includes, among other provisions, customary non-solicitation covenants by both parties, and is subject to "fiduciary out" provisions that allow a party to accept an unsolicited superior proposal that is not matched by the other party. If the offer does not close, a party may be entitled to be reimbursed by the other party for costs incurred in connection with the transaction.
SEAMARK shareholders will be asked to approve the transaction at a special meeting of shareholders expected to be held in
The share exchange offer will be distributed to GrowthWorks shareholders on or about
CIBC World Markets Inc. is acting as financial advisor to SEAMARK in connection with the transaction. McInnes Cooper is acting as legal counsel to SEAMARK in connection with the business combination.
Forward-looking Statements
This news release contains certain "forward-looking statements" and "forward-looking information" which include but are not limited to statements in respect of SEAMARK's, GrowthWorks' and (assuming the approval of the business combination) Matrix's future financial position, results of operations, performance, business prospects and opportunities. Words like "believe", "may", "expect", "will", and other similar expressions are intended to identify forward-looking statements. A number of factors could cause actual results to differ materially from those projected in our forward-looking statements, including:
- the ability of SEAMARK and GrowthWorks to satisfy all of the closing conditions and otherwise complete the transaction, including obtaining all necessary shareholder and regulatory approvals; and - other risk factors identified from time to time in SEAMARK's (and, assuming the approval of the business combination, Matrix's) securities regulatory filings which may be viewed at www.sedar.com and are incorporated by reference herein.
These factors should not be considered exhaustive. Although the forward-looking statements contained in this news release are based on what management of SEAMARK and GrowthWorks consider reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. Given the risks and uncertainties to which forward-looking statements are subject, actual results may differ materially from those expressed or implied in such statements and readers are cautioned that undue reliance should not be placed on these forward-looking statements.
The forward-looking statements and financial outlook contained in this news release are based on certain key expectations and assumptions made by SEAMARK and GrowthWorks, including but not limited to expectations and assumptions concerning prevailing economic and market conditions and the impact of market conditions and other factors on AUM levels and growth of the combined business, the performance of existing operating divisions, the levels of capital raised and retained by managed funds, the continuation of portfolio and fund management and advisory engagements, cost savings realized through the business combination, tax rates and laws, absence of extraordinary or one time expenses, and the timely receipt of regulatory, shareholder and third party approvals for the business combination. No assurance can be given that that such expectations and assumptions will prove to be correct. The forward-looking statements and financial outlook provided in this news release are also subject to risks inherent in the nature of the businesses of SEAMARK and GrowthWorks, including but not limited to risks associated with the asset management and investment fund management sectors generally, changes to regulatory requirements and tax laws, competition in the sectors in which the companies operate, loss of key management personnel and accessing needed capital resources from internal and external sources, together with risks specific to the business combination, including but not limited to the failure to realize anticipated synergies and cost savings, risks regarding integration of the operations, and managing growth.
All forward-looking statements are qualified in their entirety by the above cautionary statements and are made as at the date of this news release. Neither SEAMARK nor GrowthWorks undertakes any obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.
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For further information: Hugh Fraser, (902) 491-2553, mobile phone: (902) 471-8087, [email protected]
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