Arbor Memorial Services Inc. Announces Board-Supported All Cash Offer of $32.00 Per Share


TORONTO, Sept. 11, 2012 /CNW/ - Arbor Memorial Services Inc. (TSX: ABO.A, ABO.B) ("Arbor") announced today that it has entered into an arrangement agreement with a company (the "Purchaser") sponsored by a group (the "Purchaser Group") of existing shareholders of Arbor, comprised of Scanfield Holdings Ltd., Fairfax Financial Holdings Limited and JC Clark Ltd. (or their respective affiliates), pursuant to which the Purchaser has agreed to acquire all of the outstanding Class A voting shares and Class B non-voting shares of Arbor (other than certain shares owned by members of the Purchaser Group) for $32.00 per share in cash. The $32.00 per share purchase price represents a premium of 42% and 48% to the closing prices of the Class A shares and Class B shares, respectively, on the Toronto Stock Exchange (the "TSX") on September 10, 2012, and a premium of 38% and 45% for the Class A shares and Class B shares, respectively, based on their respective volume weighted average trading prices on the TSX for the 30 day period ending on September 10, 2012. The transaction values Arbor at approximately $375 million and Arbor's minority-held shares at approximately $71.4 million.

Arbor's board of directors, based upon the unanimous recommendation of a Special Committee comprised entirely of independent directors and the advice of legal counsel, has unanimously approved the transaction and unanimously recommends that Arbor's shareholders vote in favor of the transaction. TD Securities Inc. ("TD Securities"), the Special Committee's independent valuator, has delivered a valuation to the Special Committee which concludes that, as of September 10, 2012, the fair market value of each Class A share and each Class B share is in the range of $32.00 to $38.00. TD Securities has also provided the Special Committee with its opinion that, as of September 10, 2012, the consideration to be received by holders of Class A shares and Class B shares, other than the Purchaser Group and their related parties, is fair, from a financial point of view, to such shareholders.

The Purchaser Group currently owns approximately 83.8% of the outstanding Class A shares and 76.1% of the outstanding Class B shares of Arbor. Under the transaction, each of the members of the Purchaser Group (other than Scanfield) will monetize a portion of their investment in Arbor on the same terms as Arbor's other shareholders and, following completion of the transaction, will retain an interest in Arbor that is expected to be monetized over time as Arbor's finances permit. Additional details regarding the Purchaser, the members of the Purchaser Group and their respective interests in the transaction will be set forth in a management information circular that will be mailed to Arbor's shareholders prior to a special meeting to consider the transaction.

"We believe this transaction represents an excellent opportunity for Arbor's public shareholders to monetize their holdings for cash consideration and eliminates stock liquidity challenges related to the small market capitalization of Arbor" commented Mr. David Scanlan, Chairman of Scanfield and Arbor. "The transaction allows for the continued commitment of the Scanlan family to the success of Arbor for the very long term. In the meantime, it will be business as usual at Arbor."

"We are pleased to present this opportunity to the minority shareholders of Arbor to monetize 100% of their investment in Arbor at a cash price that represents fair market value for their shares and a significant premium to the trading price of Arbor's shares" added Mr. Robert Rose, Chairman of the Special Committee of Arbor. "After careful deliberation, Arbor's Board of Directors and Special Committee have unanimously concluded that the transaction is in the best interests of Arbor and is fair to Arbor's public shareholders".

"We are pleased to support this transaction to take Arbor private at a price that delivers fair value to all shareholders", continued Paul Rivett, Vice President, Operations of Fairfax. "We intend to provide preferred share financing to make this liquidity event possible and look forward to continuing our relationship with Scanfield and Arbor as a private company for a number of years".

"This transaction presents a compelling opportunity for JC Clark to monetize a substantial portion of its successful investment in Arbor" added Colin Stewart, Chief Executive Officer of JC Clark. "Based on our extensive history as industry investors, we believe this transaction represents excellent value for shareholders. After more than a decade-long involvement with Arbor, we look forward to continuing our relationship with Arbor and Scanfield."

The transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Ontario). Shareholders will be asked to vote on the transaction at a special meeting to be held on or prior to November 30, 2012. A management information circular will be mailed to shareholders over the coming weeks that will include, among other things, the terms of the transaction, the recommendations to shareholders of Arbor's board of directors and the Special Committee and the written formal valuation prepared by TD Securities. The transaction is subject to customary conditions, including shareholder, regulatory and court approvals (and in the case of shareholder approval, the approval of the majority of the minority for each class), finalization of transaction and financing documentation, as well as the absence of a material adverse change in the business of Arbor prior to closing.

BMO Capital Markets is acting as financial advisor to the Purchaser and BMO Bank of Montreal Corporate Finance Group is acting as lead arranger of debt financing for the Purchaser. Goodmans LLP is acting as legal advisor to the Purchaser and Scanfield. Gowling Lafleur Henderson LLP is acting as legal advisor to the Special Committee. Torys LLP is acting as legal advisor to Fairfax. Norton Rose Canada LLP is acting as legal advisor to JC Clark.

About Arbor

Arbor Memorial Services Inc. owns 41 cemeteries, 27 crematoria, 8 reception centres located on cemetery premises and 83 funeral homes in eight provinces of Canada.

Cautionary statement regarding forward looking statements and information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities laws, including statements regarding the completion of the transaction, the holding of a shareholder meeting and other information that is not historical facts. Such forward-looking information is subject to important risks and uncertainties including, without limitation, approval of applicable governmental authorities, required Arbor shareholder approval, necessary court approvals, necessary regulatory approvals and satisfaction of other customary conditions. As a result of these risks and uncertainties, the transaction could be modified, restructured or not be completed, and the results or events expressed or implied in any forward-looking information may differ materially from actual results or events. Forward-looking information is not a guarantee of future performance, given that it involves risks and uncertainties. Except as required by law, Arbor does not assume and expressly renounces any obligation to update any forward-looking information, which are only applicable on the date on which they were made. Additionally, Arbor undertakes no obligation to comment on expectations of, or statements made by, third parties in respect of the transaction.

SOURCE: Arbor Memorial Services Inc.

For further information:

Brian D. Snowdon, President and Chief Executive Officer
Telephone: (416) 763-4531

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