- Chemtrade offers $1.50 in cash per Canexus common share.
- Offer represents a significant 21% premium to the closing price of the Canexus common shares on September 13, 2016.
- Chemtrade presents Offer directly to shareholders after the Canexus board of directors repeatedly refuses to engage.
TORONTO, Oct. 4, 2016 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) ("Chemtrade" or "We" or "Us" or the "Fund") announced today that an indirect wholly-owned subsidiary of the Fund (the "Offeror") has commenced its previously announced offer (the "Offer") to acquire all of the issued and outstanding common shares (the "Common Shares") of Canexus Corporation (TSX:CUS) ("Canexus"). The Offer will remain open until 5:00 p.m. (Calgary time) on January 18, 2017 unless extended, accelerated or withdrawn by Chemtrade in accordance with the terms of the Offer.
Under the terms of the Offer, Chemtrade proposes to acquire all of the issued and outstanding Common Shares of Canexus for $1.50 in cash per Common Share. This represents a significant 21% premium to the closing price of the Canexus Common Shares on the TSX on September 13, 2016 (the last trading day prior to the public announcement by Chemtrade of its initial proposal to the Canexus board of directors). The Offer values Canexus at an enterprise value of approximately $884 million, which implies a multiple of 8.4x the mid-point of Canexus' 2016 Adjusted Cash Operating Profit ("ACOP") guidance range of $100 to $110 million.
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "In the absence of constructive engagement from the Canexus board, we have made an attractive offer directly to Canexus shareholders. We believe our all-cash proposal to Canexus shareholders presents them with a valuable opportunity for liquidity and certainty of value."
The Offeror will file the Offer and take-over bid circular and related documents with Canadian securities regulatory authorities on SEDAR. Copies of the Offer, take-over bid circular and related documents, as well as a presentation summarizing the benefits of the Offer, will be available online today at www.sedar.com and www.CanexusOffer.com.
Chemtrade encourages Canexus shareholders to read the full details of the Offer set forth in the formal Offer and take-over bid circular, which contains the full terms and conditions of the Offer as well as detailed instructions on how Canexus shareholders can deposit their common shares to the Offer.
For assistance in depositing Canexus shares to the Offer, Canexus shareholders should contact Evolution Proxy, Inc., the information agent for the Offer, at 1-844-226-3222 (North American Toll Free Number) or +1-416-855-0238 (Outside North America), or by email at firstname.lastname@example.org.
Chemtrade will hold a live audio webcast on October 4, 2016 at 8:30 a.m. EST to review the offer. To access the live audio webcast, including slide presentation, visit www.CanexusOffer.com or www.newswire.ca.
The audio webcast will be archived for 150 days and can be found at www.CanexusOffer.com or www.newswire.ca.
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, sodium chlorate, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
This news release does not constitute an offer to buy or the solicitation of an offer to sell any of the securities of Chemtrade or Canexus.
Non-IFRS and Non-U.S. GAAP Measures
This news release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of operations from management's perspective. Accordingly, non-IFRS measures should never be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. Specifically, this press release discloses Adjusted Cash Operating Profit, which is a non-IFRS measure used by Canexus. Canexus defines Cash Operating Profit (Loss) as Operating Profit (Loss) before depreciation and amortization (which is included in cost of sales and general and administrative expense) and non–cash share–based compensation expense (recovery) (which is included in cost of sales, distribution, selling and marketing expense, and general and administrative expense). Cash Operating Profit (Loss) represents the cash contribution of product sales and service revenues after taking into consideration direct costs to produce products and deliver services, distribution, selling and marketing expense and general and administrative expense. Adjusted Cash Operating Profit is a non-IFRS measure used by Canexus that adjusts Cash Operating Profit (Loss) for certain items which have not been disclosed.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking information can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the benefits of the Offer, the results, effects and timing of the Offer and the expected liquidity and certainty of value for Canexus shareholders . Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation: the ultimate outcome of any possible transaction between Chemtrade and Canexus, including the possibility that Canexus will not accept a transaction with Chemtrade or enter into discussions regarding a possible transaction, that the conditions of the Offer may not be satisfied or waived by Chemtrade at the expiry of the Offer period, the ultimate outcome and results of integrating the operations of Chemtrade and Canexus if a transaction is consummated, the ability to obtain regulatory approvals and meet other closing conditions to any possible transaction, including any necessary shareholder approvals, potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the Offer transaction or any subsequent transaction, competitive responses to the announcement or completion of the Offer, costs and difficulties related to the integration of Canexus' businesses and operations with Chemtrade's businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from the proposed transaction, uncertainties as to the impact of the completion of the Offer or any alternative or subsequent transaction on Chemtrade's earnings or cash flows that it expects, unexpected costs, liabilities, charges or expenses resulting from the proposed transaction, litigation relating to the proposed transaction, the inability to retain key personnel, any changes in general economic and/or industry-specific conditions, as well as the risks and uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual Information Form and the "Risks and Uncertainties" section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.
The Fund disclaims any intention or obligation to update any forward-looking information even if new information becomes available, as a result of future events or for any other reason, except as required by law. The forward-looking information contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund
For further information: Mark Davis, President and CEO, Tel: (416) 496-4176; Rohit Bhardwaj, Vice-President, Finance & CFO, Tel: (416) 496-4177; Shareholder Contact: Evolution Proxy, Inc., 1-844-226-3222 (North American Toll Free Number), +1-416-855-0238 (outside North America), email@example.com, www.CanexusOffer.com; Media Contact: Bayfield Strategy, Inc., Riyaz Lalani, +1-416-907-9365, firstname.lastname@example.org