C2C Industrial Properties Inc. Announces Conditional Acquisition and Private Placement


Conditional Acquisition

TORONTO, Sept. 21, 2011 /CNW/ - C2C Industrial Properties Inc. ("C2C" or the "Company") (TSXV - "CCH") announced today that an affiliate of the Company (the "Purchaser") has acquired the right pursuant to a conditional purchase agreement to acquire a portfolio of properties located in Eastern Canada from an arm's length vendor (the "Acquisition"). The portfolio consists of multi-tenant industrial buildings totalling more than 600 million square feet. As an investment, the subject portfolio aligns with the strategic plan of C2C.  The properties within the portfolio are stabilized, income-producing assets located within close proximity to one another in a targeted primary market.  The portfolio provides a base of cash flow and tenants necessary to develop and acquire growth opportunities within the market.

The Purchaser's obligation to complete the Acquisition is subject to a number of conditions precedent, including satisfactory completion of due diligence and approval by the TSX Venture Exchange. If all of the outstanding conditions are satisfied or waived in accordance with their terms, the Company expects that the Acquisition will be completed in the fourth quarter of 2011.

Private Placement

The Company also announced today that it has entered into an agreement with a syndicate of agents co-led by GMP Securities L.P. and Desjardins Securities Inc. to sell approximately CDN$30.0 million of subscription receipts (the "Subscription Receipts") of the Company (the "Offering"), together with an over-allotment option of up to 5% of the Offering exercisable 48 hours prior to closing. The Subscription Receipts will be offered on a private placement, best efforts agency, basis at a price to be determined in the context of the market.

Upon closing of the Offering, the proceeds from the sale of the Subscription Receipts, less the costs and expenses of the agents (the "Net Escrowed Funds"), will be deposited into escrow with a third party escrow agent to be held pending completion of the Acquisition and the satisfaction of other escrow release conditions, including approval by shareholders of certain amendments to the Asset Management Agreement between the Company and Strathallen Capital Corp. Provided that closing of the Acquisition and satisfaction of the escrow release conditions occurs on or before November 18, 2011 unless such date is extended (the "Release Date"), each Subscription Receipt will be automatically exercised for one common share of the Company, and the Net Escrowed Funds, less the agents' commission, will be released to the Company.  If the escrow release conditions are not satisfied on or prior to the Release Date, the Net Escrowed Funds shall be distributed to the holders of Subscription Receipts on a pro rata basis, and the Company will make up any shortfall such that each holder will receive an amount equal to the issue price for each Subscription Receipt.

Pursuant to applicable Canadian securities laws, the securities issued under the Offering will be subject to a four-month hold period from the time of closing of the Offering.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and applicable securities regulatory authorities and satisfactory completion of due diligence by the agents.

This press release is not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements.

Asset Management Amendments

It is a condition of the release of the Net Escrowed Funds that the asset management agreement (the "Asset Management Agreement") dated May 16, 2011 between the Company and Strathallen Capital Corp. (the "Asset Manager") be amended (the "Proposed Amendments").

The Proposed Amendments are a requirement of the Private Placement and include amendments to the fee arrangements and internalization of the asset management functions. The fee arrangements include:

(a)   acquisition fees calculated as a percentage of the purchase price paid for a property, including the value of any non-cash consideration; and
(b)   asset management fees calculated on an annual basis as a percentage of the market value of the assets of the Company and payable quarterly.

The Company intends to pay up to 50% of the acquisition and asset management fees in common shares in the capital of the Company at a price not to exceed the "discounted market price" as set out in the policies of the TSX Venture Exchange. Any common shares issued by the Company shall be delivered to an escrow agent to be held pursuant to the terms of an escrow agreement on behalf of the Asset Manager and released on the basis of 1/3 on the Termination Date (as defined below) and 1/3 on each of the next two anniversaries of the Termination Date.

The Company intends to terminate the Asset Management Agreement on the first date that the market value of the assets of the Company equal or are greater than $500,000,000 (the "Termination Date"), at which time the Company intends to internalize the asset management functions with no fees payable to the Asset Manager.

The principals of the Asset Manager and related parties are obliged as part of the Private Placement to invest $1,000,000 in the aggregate in the Company including amounts previously invested by them.

Share Consolidation

The Company may consolidate the issued and outstanding Common Shares in the capital of the Company on the basis of up to five existing Common Shares for one new Common Share or on such other basis as deemed appropriate by the Board (the "Share Consolidation"). The purpose of the Share Consolidation is to reduce the number of outstanding Common Shares and to facilitate the Private Placement.

Special Meeting

A special meeting of shareholders will be held on November 3, 2011. Shareholders will be asked at the meeting to approve the Proposed Amendments and Share Consolidation. The Proposed Amendments require approval by a majority of the disinterested shareholders and the Share Consolidation requires approval by a special resolution of the Shareholders. The Company will not proceed with the Proposed Amendments and Share Consolidation if the Acquisition is not completed.

About C2C Industrial Properties Inc.

C2C is a real property company that recently completed its Qualifying Transaction on the TSX Venture Exchange. C2C's principal objective is to acquire, own and operate industrial properties across Canada. More information about C2C (CCH: TSX-V) is available at www.sedar.com.

Forward Looking Statements

This document contains forward-looking statements within the meaning of applicable securities laws relating to C2C and the environment in which it operates and its strategy, action plans and investments, which may involve estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond C2C's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in this press release and other public filings. Consequently, readers should not place any undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this press release. C2C is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. All forward-looking statements attributable to C2C are expressly qualified by these cautionary statements.

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

SOURCE C2C Industrial Properties Inc.

For further information:

C2C Industrial Properties Inc.
Christopher Ross, President
(416) 646-7353

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C2C Industrial Properties Inc.

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