Look Communications Announces Proposed Change of Business and Concurrent Private Placement


TORONTO, March 26, 2013 /CNW/ - Look Communications Inc. ("Look") (NEX: LOK.H and LOK.K) announced today it has entered into a securities purchase agreement (the "Purchase Agreement") pursuant to which Look has agreed to acquire all of the outstanding shares of Sunwave Gas & Power Inc. ("Sunwave"), a privately-held provider of innovative energy commodity products and services based in Toronto, for aggregate consideration of $1 million.  It is anticipated that consideration for the transaction will be satisfied through the issuance of 3,382,974 multiple voting shares and 3,759,883 subordinate voting shares in the capital of Look, each valued at $0.14 per share (the "Acquisition").  Concurrently with the execution of the Purchase Agreement, Look has entered into subscription agreements (the "Subscription Agreements") with a group of sophisticated arm's length investors pursuant to which the investors will subscribe, on a private placement basis, for an aggregate of 30,446,767 multiple voting shares and 33,838,947 subordinate voting shares in the capital of Look at a price of $0.14 per share for aggregate subscription proceeds of $9,000,000 (the "Private Placement" and, together with the Acquisition, the "Transactions").  The multiple voting shares and subordinate voting shares intended to be issued pursuant to the Transactions will be issued in the same proportion as the number of multiple and subordinate voting shares currently outstanding, and all such shares will be subject to a hold period expiring four months and one day after closing of the Transactions.  The shares issued as consideration for the Acquisition may be subject to escrow in accordance with the policies of the TSX Venture Exchange (the "Exchange").

"This transaction is the culmination of a process of assessing all available options for maximizing value for shareholders that has been ongoing since the current board took office in July of 2010", said Lawrence Silber, an independent director of Look.  "With approximately $26.5 million in cash and a board and management team with significant experience and expertise in the industry, the board believes that the combined company will be well-positioned for growth and that this transaction represents the best available opportunity to maximize returns for Look's shareholders over the long term" continued Mr. Silber.

"Sunwave is excited to be joining forces with Look, creating a platform on which to build Sunwave's growing retail energy business for the benefit of both existing and new Look shareholders" said Rob Weir, President of Sunwave.

Look has not carried on an active business since the sale of its wireless spectrum business in 2009.  Accordingly, on November 11, 2011, Look's shares were transferred to the NEX board of the Exchange.  The Acquisition constitutes a "change of business" within the meaning of the policies of the Exchange and, accordingly, Look has applied to the Exchange for reactivation and graduation to the Exchange as an Industrial issuer upon completion of the Transactions.  The proceeds of the Private Placement will be used to fund the working capital requirements of Sunwave, for organic and inorganic growth opportunities, and for general corporate purposes.

Contemporaneously with the completion of the Transactions, Mark J. Lewis, Chief Executive Officer of OZZ Clean Energy Inc. ("OZZ"), the parent company of Sunwave, will be appointed Chief Executive Officer of Look, and Robert Weir, President of Sunwave, will be appointed Chief Operating Office of Look.  In addition, Stanley H. Hartt and Stephen J.J. Letwin will be appointed to the Look board as independent directors and two of Look's existing independent directors will continue as directors.  Biographies for Messrs. Lewis, Weir, Hartt and Letwin are provided below.  It is anticipated that C. Fraser Elliot, Look's Chief Financial Officer, will continue in his role following completion of the Transaction.

Each of the Acquisition and the Private Placement is conditional upon the completion of the other.  Completion of the Transactions is subject to a number of conditions, including Exchange acceptance, the approval of Look's shareholders in accordance with the policies of the Exchange and other customary conditions.  The transaction is also conditional upon Look's shareholders either approving Look's existing dual class share structure or voting to collapse the dual class share structure into a single class of common shares, in each case in accordance with applicable laws and the rules of the Exchange.  If Look's shareholders vote to collapse the dual class share structure, Look will issue a number of common shares pursuant to the Acquisition and the Private Placement that is economically equivalent to the number of multiple and subordinate voting shares described above.  Subject to the satisfaction or waiver (where permitted) of all applicable conditions, it is anticipated that the closing of the Transactions will occur late in or about June, 2013.  Look intends to seek an exemption from the Exchange's sponsorship requirements in connection with the Acquisition.  If the Exchange does not grant an exemption, completion of the Transactions will also be conditional upon Look obtaining a sponsorship report from a qualified brokerage firm satisfactory to the Exchange.

All of the terms and conditions of the Transactions are set forth in the Purchase Agreement and the Subscription Agreements, copies of which will be available under Look's profile at www.sedar.com.  Additional information regarding the Transactions and the businesses of Look and Sunwave, will be included in an information circular to be prepared by Look in accordance with the policies of the Exchange and applicable securities laws, a copy of which will also be available under Look's profile at www.sedar.com.

Prior to the execution of the Purchase Agreement and the Subscription Agreements, Look terminated the support agreement entered into with Messrs. Robert Ulicki and Jeff Gavarkovs dated December 18, 2012.  Look's board of directors determined that the Transactions constitute a "superior proposal" (as defined in the support agreement) and, accordingly, has paid the termination payment of $225,000 to Messrs Ulicki and Gavarkovs.

Look continues to vigorously pursue recovery of the approximately $20 million of sale awards paid in 2009 pursuant to the statement of claim issued by Look in July, 2011 and CBCA motion materials filed in August, 2011.

Mark J. Lewis

Mark Lewis brings more than 20 years of executive leadership and management experience in the energy industry in both operating and investing roles. Mr. Lewis currently serves as the President and CEO of OZZ, a leading energy services provider based in Toronto. Prior to joining OZZ, Mr. Lewis was a Partner and Managing Director with MissionPoint Capital Partners, a private investment firm investing in the transition to a lower carbon economy. Mr. Lewis co‐led the firm's overall investment strategy and was a member of the investment committee. Previously, he was with General Electric Company ("GE") in a number of roles in Europe and North America, including leading the global business development activities of GE's largest industrial business, GE Energy. Mr. Lewis began his career with Credit Suisse in its energy and mergers and acquisitions advisory businesses. Mr. Lewis holds an MBA from the Kellogg School of Management at Northwestern University and a B.A. (Hons. with distinction) from the University of Western Ontario. Mr. Lewis also serves on the boards of Trilliant Inc., a global smart grid solutions provider, and UpWind Solutions Inc., the largest independent provider of operations and maintenance services to the North American wind power industry.

Robert Weir

Mr. Weir has more than 20 years of international and domestic business development and executive management experience in the energy sector. Mr. Weir is currently the President of Sunwave and is responsible for all operations of the business. Prior to joining Sunwave, Mr. Weir was President of Zoom Energy, a private energy advisory and consulting company. His previous experience includes large scale cogeneration development in Australia and Canada. He led the launch of Constellation New Energy's electric retail business in Ontario. Subsequently he moved on to manage Constellation New Energy's commodity retail businesses in New York and New Jersey, based out of New York City.

Stanley H. Hartt, O.C., Q.C.

Stanley H. Hartt is Counsel at Norton Rose Canada LLP and has decades of leadership experience in business, law and public policy. Immediately prior to joining Norton Rose in 2013, Mr. Hartt was chairman of Macquarie Capital Markets Canada Ltd. Called to the Quebec Bar in 1965, he worked for Stikeman Elliott for 20 years and from 1985 to 1988, was Deputy Minister of the Department of Finance, Canada. From 1989 to 1990, Mr. Hartt was Chief of Staff in the Office of Prime Minister Brian Mulroney and from 1990 to 1996 he was Chairman, President and CEO of Campeau Corporation. In 1996, Mr. Hartt became Chairman of Salomon Brothers Canada Inc., later renamed Citigroup Global Markets Canada Inc., until 2008. He continued his public service as Chair of the Advisory Committee on Financing, established by the Minister of Finance during the Global Financial Crisis. He was also a member of the Canadian Task Force on Social Finance which reported in December 2010. Mr. Hartt has a great deal of U.S. cross‐border and international experience and participated actively in negotiating the Canada‐U.S. Free Trade Agreement.

Stephen J. J. Letwin

One of Canada's premier business leaders, Steve Letwin is President and Chief Executive Officer of IAMGOLD Corporation, a multi-billion dollar senior gold producer listed on the Toronto Stock Exchange. Specializing in corporate finance, operational management, and merger and acquisitions, Mr. Letwin brings over 30 years of experience from the highly competitive resource sector. Mr. Letwin was previously with Enbridge Inc. in Houston, Texas, as Executive Vice President, Gas Transportation & International. He was responsible for natural gas operations including overall responsibility for Enbridge Energy Partners as Managing Director. In 1999, Mr. Letwin joined Enbridge as President and COO, Energy Services, based in Toronto, Canada. Before Enbridge, he was President & CEO of TransCanada Energy and CFO, TransCanada Pipelines, Numac (Westcoast Energy) and Encor Energy. Mr. Letwin holds an MBA from the University of Windsor, is a Certified General Accountant, a graduate of McMaster University (B.Sc., Honours), and a graduate of the Harvard Advanced Management Program.

About Sunwave Gas & Power Inc.

Sunwave is a private provider of innovative energy commodity products and services based in Toronto, Ontario.  Founded in 2011, Sunwave is a licenced retailer of energy commodity products to the residential and commercial customer segments in the Ontario market.  Sunwave offers consumers the choice to purchase their natural gas and electricity at fixed or variable rates for terms of 1 to 5 years. Sunwave currently serves or will serve, based on executed customer contracts, 425 customer accounts represented by 25 large commercial customers and 377 residential accounts. This represents approximately 2,800 residential customer equivalents (a standard industry measure of the annual consumption of an average residential customer, which equates to 10,000 kWh/yr for electricity and 2,815 m3 for natural gas). Sunwave is licensed by the Ontario Energy Board for both natural gas and electricity sales through to 2017.  Sunwave is incorporated under the Canada Business Corporations Act.

Sunwave's first full year of operations was in 2012, during which Sunwave generated gross revenue of approximately $330,000 from the sale of natural gas deliveries in Ontario, resulting in gross margin of approximately $81,000.  During 2012, Sunwave incurred a net loss of approximately $1,998,000, primarily resulting from expenses associated with investment in Sunwave's back office systems and sales processes.  The foregoing summary financial information is derived from Sunwave's unaudited financial statements for the fiscal year ended December 31, 2012.

Sunwave is a wholly-owned subsidiary of OZZ, a corporation incorporated under the laws of Canada.  OZZ is indirectly controlled by Steve Muzzo, a businessman resident in the Province of Ontario. Sunwave's website may be found at www.sunwavegas.com.

About Look Communications Inc.

Look's shares are currently listed on the NEX under the symbols "LOK.H" for Multiple Voting Shares and "LOK.K" for Subordinate Voting Shares. Look's website may be found at www.grouplook.ca.

Cautionary Statements

Completion of the Transactions is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Transactions cannot close until the required shareholder approval is obtained. There can be no assurance that the Transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the information circular to be prepared in connection with the Transactions, any information released or received with respect to the Transactions may not be accurate or complete and should not be relied upon. Trading in the securities of Look should be considered highly speculative.

The Exchange has in no way passed upon the merits of the proposed Transactions and has neither approved nor disapproved the contents of this news release.

The information contained in this release includes forward-looking statements regarding future events and the future performance of Look and Sunwave, including the completion of the Transactions, that involve risks and uncertainties, including the ability of Look and Sunwave to obtain Exchange approval and shareholder approval, that could cause actual events or results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by Look and Sunwave at the time of preparation, may prove to be incorrect. The actual events or results achieved may vary from the information provided herein and the variations may be material. Consequently, there is no representation by Look or Sunwave that actual events or results achieved will be the same in whole or in part as those forecast.

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

SOURCE: Look Communications Inc.

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