TORONTO, July 5, 2019 /CNW/ - James Meekison announces that, on July 4, 2019, CMH Acquisition Corp. ("CMH Acquisition" or the "Purchaser"), an entity controlled by Mr. Meekison and Terry Holland, entered into an arrangement agreement (the "Arrangement Agreement") with Carmanah Technologies Corporation ("Carmanah"), JDM Investment Holdings Inc. ("JDM") and TMH Capital Limited Partnership ("TMH", and together with JDM, the "Guarantors") pursuant to which CMH Acquisition agreed to acquire all of the issued and outstanding common shares in the capital of Carmanah ("Carmanah Shares"), other than those Carmanah Shares already owned by the Purchaser prior to the completion of the Arrangement, pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the "Arrangement"), subject to the terms of the Arrangement Agreement. All currency is stated in Canadian dollars.
As contemplated in the Arrangement Agreement, prior to the completion of the Arrangement, Mr. Meekison and Mr. Holland, or entities controlled by them, and John Simmons (collectively, the "Rollover Shareholders"), have agreed to transfer certain Carmanah Shares (the "Rollover Shares") they own to the Purchaser in exchange for shares of the Purchaser, pursuant to support, voting and rollover agreements entered into with the Purchaser (the "Rollover Agreements"). Accordingly, if the Arrangement is completed, Mr. Meekison, Mr. Holland and Mr. Simmons would, directly or indirectly, solely own the Purchaser and the Purchaser would own all of the outstanding Carmanah Shares. Completion of the Arrangement is subject to a number of conditions as set out in the Arrangement Agreement.
Prior to entering into the arrangement agreement, Mr. Meekison, Mr. Holland and Mr. Simmons collectively owned or controlled a total of 6,336,534 Carmanah Shares, and 707,546 options to acquire Carmanah Shares (the "Carmanah Options") representing in aggregate approximately 36.3% of the issued and outstanding shares of Carmanah and 40.3% assuming exercise of such Carmanah Options as follows:
Mr. Meekison owned or controlled 4,217,104 Carmanah Shares, which will all be Rollover Shares, through the following entities, and 100,000 Carmanah Options, representing 24.16% of the issued and outstanding Carmanah Shares and 24.74% assuming exercise of such Carmanah Options:
- JDM – 1,772,512 Carmanah Shares representing 10.15% of the issued and outstanding Carmanah Shares; and
- Trimin Capital Corp. – 2,444,592 Carmanah Shares representing 14.01% of the issued and outstanding Carmanah Shares.
Mr. Holland owned or controlled 1,492,800 Carmanah Shares, which will all be Rollover Shares, through TMH Capital Limited Partnership and 100,000 Carmanah Options, representing 8.55% of the issued and outstanding Carmanah Shares and 9.12% assuming exercise of such Carmanah Options.
John Simmons owned or controlled 626,630 Carmanah Shares, of which 45,567 will be Rollover Shares, and 507,546 Carmanah Options, representing 3.59% of the issued and outstanding Carmanah Shares and 6.5% assuming exercise of such Carmanah Options.
Under the Arrangement, the Purchaser would pay to Carmanah shareholders $7.35 in cash for each Carmanah Share (other than the Rollover Shares) they own (the "Consideration"), less applicable withholdings. Holders of options to acquire Carmanah Shares ("Carmanah Options") would receive a cash payment equal to the difference (if any) between the Consideration ($7.35 per Common Share) and the applicable exercise price for each Carmanah Option held as of the date the Arrangement becomes effective, less applicable withholdings.
Carmanah's head office is located at 250 Bay Street, Victoria, BC Canada V9A 3K5 . An early warning report has been filed with the applicable securities regulators with respect to the foregoing matters pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues of the Canadian Securities Administrators. A copy of the early warning report will be available on Carmanah's issuer profile on SEDAR at www.sedar.com.
SOURCE Carmanah Technologies Corporation