Marsulex Inc. and Chemtrade Logistics Income Fund Enter into Arrangement Agreement

TORONTO, May 5 /CNW/ - Marsulex Inc. (TSX: MLX) is pleased to announce that it has entered into an Arrangement Agreement with Chemtrade Logistics Income Fund (TSX: CHE.UN) which will result in the acquisition by Chemtrade of 100% of the outstanding common shares of Marsulex by way of a plan of arrangement under the Canada Business Corporations Act.

Pursuant to the arrangement, Marsulex shareholders will have the option to receive per Marsulex share either: (i) CAD $13.80 cash, or (ii) CAD $10.50 in cash and a common share of Investis U.S., Inc. which will hold Marsulex's Marsulex Environmental Technologies business ("MET").  The Board has made a determination that the fair market value of an Investis common share as at today's date is CAD $3.30.  Upon completion of the arrangement, the Marsulex shareholders who elect to receive Investis Common Shares will own through Investis 100% of MET.

The transaction has been structured in this way to allow all Marsulex Shareholders the choice between an all cash option and an option which would include cash and the right to participate in the future value of MET through ownership of the Investis common shares. The Marsulex Board of Directors has asked its two largest shareholder groups, Birch Hill Equity Partners and TD Capital (with aggregate holdings of approximately 60%) to decline the all cash option and both have agreed to do so, thereby allowing all other shareholders to receive the all cash option if they so elect.

"Today's announcement marks the culmination of a comprehensive process to maximize value for Marsulex shareholders," said Marsulex CEO Laurie Tugman. "We believe this transaction provides the best alternative for Marsulex shareholders to receive attractive value and liquidity for their shares."

Fairness Opinion and Unanimous Board Approval

Prior to executing the Arrangement Agreement, the board of directors of Marsulex obtained an opinion from GMP Securities L.P., that the consideration to be received by Marsulex shareholders pursuant to the Transaction is fair, from a financial point of view, to the Marsulex shareholders.

The board of directors of Marsulex has unanimously approved the transaction and recommends that shareholders vote to accept the offer. The Company's two largest shareholder groups, Birch Hill Equity Partners and TD Capital, who collectively hold approximately 60% of the issued and outstanding shares of Marsulex, have entered into support agreements with Chemtrade and have agreed to vote their shares in favour of the Transaction at the special meeting of Marsulex shareholders subject to the Arrangement Agreement having not been terminated in accordance with its terms.

Arrangement Matters

The Transaction is subject to the approval of at least two-thirds of the votes cast by Marsulex shareholders at a special meeting of Marsulex shareholders, which is expected to be held in late June, 2011.  Completion of the Transaction is also subject to the approval of the Ontario Superior Court of Justice, the receipt of all other necessary regulatory and third party approvals, and other customary conditions.  The Arrangement Agreement includes a fiduciary out for Marsulex where a superior proposal has been received subject to Chemtrade's right to match.  The Arrangement Agreement contains customary deal protections for Chemtrade including the payment by Marsulex of a break-up fee of $17.5 million in certain circumstances.  It also contains a payment by Chemtrade of a reverse break-up fee of $17.5 million if Chemtrade's financing condition is not met.  Full details of the Transaction, including additional disclosure on MET, will be included in the management information circular of Marsulex to be mailed to Marsulex securityholders in due course. Shareholders are urged to read the management information circular once it is available.  The full text of the Arrangement Agreement will be available at


TD Securities Inc., CIBC World Markets Inc. and Houlihan Lokey acted as financial advisors to Marsulex. GMP Securities Inc. acted as financial advisor to the board of Marsulex and provided a fairness opinion. Stikeman Elliott LLP acted as legal counsel to Marsulex.

About Marsulex

Marsulex is a leading provider of industrial services, primarily environmental compliance solutions for air quality control and hazardous waste streams produced in petroleum refineries and petrochemical plants, and a leading producer and marketer of sulphur-based industrial and water treatment chemicals. Marsulex's products and services are provided to a broad base of customers in a wide range of industries but with a major focus in the petroleum extraction, petroleum refining, pulp and paper, and chemical industries. Increasingly stringent environmental compliance regulations have created opportunities for Marsulex to apply its core competency of operating small to medium size chemical plants efficiently and safely.

About Investis

Investis, incorporated under the General Corporation Law of the State of Delaware, is a wholly owned subsidiary of Marsulex. Investis holds all of the issued and outstanding shares of Marsulex's Marsulex Environmental Technologies operations.

MET provides environmental systems and services, primarily air quality compliance, to electric utilities, petrochemical and general industrial customers worldwide that combust sulphur bearing fossil fuels or otherwise create sulphur oxide pollutants in their operating plants' processes. MET's systems and services enable them to cost effectively remove these and other pollutants from their air emissions to meet environmental regulations as well as achieve fuel flexibility and access to the savings of using lower cost, high-sulphur fuels and derive revenues from the sale of by-products such as commercial quality calcium sulphate (gypsum) and ammonium sulphate fertilizer.

Caution Concerning Forward-Looking Statements

This news release contains forward-looking statements relating to the proposed acquisition of Marsulex Inc., including statements regarding the completion of the proposed transaction and other statements that are not historical facts. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking statements.

The completion of the proposed transaction is subject to a number of terms and conditions, including, without limitation: (i) applicable governmental authorities approvals, (ii) required Marsulex shareholder approval, (iii) necessary court approvals, and (iv) certain termination rights available to the parties under the Arrangement Agreement. These approvals may not be obtained, the other conditions to the transaction may not be satisfied in accordance with their terms, and/or the parties to the Arrangement Agreement may exercise their termination rights, in which case the proposed transaction could be modified, restructured or terminated, as applicable.

The forward-looking statements contained in this news release are made as of the date of this release. We disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, we undertake no obligation to comment on expectations of, or statements made by, third parties in respect of the proposed transaction. For additional information with respect to certain of these and other assumptions and risks, please refer to the related material change report and the Arrangement Agreement to be filed by Marsulex Inc. with the Canadian securities commissions (available at

SOURCE Marsulex Inc.

For further information:

Laurie Tugman  or  William Martin

President and CEO   Chief Financial Officer

Tel: (416) 496-4157   Tel: (416) 496-4164

Profil de l'entreprise

Marsulex Inc.

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