Listing: TSX Venture Exchange
LINCOLN, England, Jan. 18, 2019 /CNW/ - Dynex Power Inc. (TSXV: DNX), a leading, high power semiconductor company whose operations are in the United Kingdom, announced today that it has signed a definitive Arrangement Agreement with Zhuzhou CRRC Times Electric Co., Ltd., whereby CRRC Times Electric, or one of its affiliates, will acquire all the Company's common shares that it does not already own for $0.65 per share in cash. CRRC Times Electric currently holds approximately 75% of the issued and outstanding common shares in the capital of the Company.
A spokesman for Dynex said that, over the past six months, all the options for Dynex's future as well as the Company's 5-year plan were very carefully considered by a Special Committee of the Board of Directors. This Special Committee was composed of individuals who are independent, and was formed to conduct a comprehensive strategic review of the Company and, eventually, to review and assess the way forward to privatization. To support its strong recommendation of accepting CRRC Times Electric's offer, the Special Committee delivered evidence to the Board of Directors that 59.91% of the minority shareholders, those shareholders other than CRRC Times Electric, had executed commitments to vote for the approval of the privatization transaction and to sell their shares to CRRC Times Electric for $0.65 a share.
The purchase price represents an approximate 160% premium over the last trading price of the common shares on the TSX Venture Exchange on January 17, 2019 (immediately prior to the initial announcement of the offer), and an approximate 158% premium over the 20-trading day volume-weighted average share price prior to the initial announcement.
In the course of its work, the Special Committee engaged WelchGroup Consulting Inc. as an independent financial advisor to provide to the Special Committee an opinion of the fairness of the privatization transaction. WelchGroup concluded that as of the date of their opinion and based upon and subject to the information provided to WelchGroup: the consideration to be paid to the minority shareholders pursuant to the Arrangement is fair, from a financial point of view, to the minority shareholders. The full text of the Fairness Opinion and the various factors considered by the Special Committee and the Board of Directors in their determination to approve the transaction as well as other relevant background information will be contained in the Company's information circular which will be provided to shareholders of the Company in connection with the Extraordinary General Meeting.
Based on the recommendation of the Special Committee, among other things, the Board of Directors of the Company has, with interested directors abstaining, unanimously: (i) determined that the Arrangement is fair to the minority shareholders and that privatization is in the best interests of the Company; and (ii) recommended that shareholders vote in favor of the Arrangement. The Company intends to call an EGM of its shareholders to be held in March 2019 to seek formal approval for the Arrangement. A record date and notice of the EGM will also be announced.
The transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act which is subject to, among other things, customary conditions, including approval of a special resolution with respect to the Arrangement by (i) at least 66⅔% of the votes cast by shareholders of the Company present in person or represented by proxy at the EGM, and (ii) a simple majority of the votes cast by the minority shareholders present in person or represented by proxy at the EGM (excluding shareholders whose votes are required to be excluded pursuant to MI 61 - 101), and the receipt of approval of the Ontario Superior Court of Justice of (Commercial List) with respect to the Arrangement. The Arrangement is not subject to a financing condition.
Following this press release, Dynex will soon seek an interim order from the Ontario Superior Court of Justice of (Commercial List) to proceed with the privatization transaction. A Record Date and notice of an Extraordinary General Meeting called to vote on the transaction will also be announced.
David Banks and Daniel Owen representing the Special Committee of the Board said, "This is a red-letter day for Dynex. We have been extremely fortunate to have CRRC Times Electric as the controlling shareholder. CRRC Times Electric has defined the very best of ethical and supportive commercial partnership. They have contributed personnel of the highest caliber to work with Dynex. They have made a very positive and impressive contribution to the business, to the Company and indeed to Canada. From our first meeting with our Chinese colleagues, they have honored every commitment made."
Debbie Weinstein, long standing corporate counsel and corporate secretary said, "Privatization is the logical conclusion of the great support and leadership that CRRC Times Electric has provided Dynex. The Company has great potential under the full ownership by CRRC Times Electric. However, I embrace this good news with some sadness, as I will no longer have the opportunity to work with Dynex and with CRRC Times Electric."
Clive Vacher, President and Chief Executive Officer, commented, "This is an exciting development for Dynex and is positive for the Company and its employees. For over a decade, CRRC Times Electric has been an exceptional majority owner, providing first-class support and guidance. As we go forward as a wholly-owned subsidiary, the future is bright."
Alan Lyons, Dynex Chief Financial Officer stated, "I add my support to this key strategic decision. The new full ownership of Dynex will provide even greater synergies and a simplified structure. Going forward, I will continue to focus on the objectives of Dynex and look forward to working in an even more integrated fashion."
Liu Ke'an, the Chairman of Dynex and General Manager of Zhuzhou CRRC Times Electric Company, added, "This is the dawning of an exciting time for Dynex. There are very fine people working in Lincoln. We have worked very hard to support Dynex. It has been important to CRRC Times Electric for the people in Lincoln to appreciate CRRC Times Electric's strong support. It seems that our great respect for them is reciprocated. The potential in the UK is very bright and exciting, and we look forward to our future there."
In commenting on its expectations, the Company cautioned existing and potential shareholders about relying on the Company's expectations in that the Company's expectations contain forward looking statements and assumptions which are subject to the risks and uncertainties of the markets and the future, which could cause actual results to differ materially from expectations, and which are each difficult and subjective to forecast. Certain of those risks and uncertainties are discussed in the Management's Discussion and Analysis for the quarter ended September 30th , 2018 and include, among other things, risks and uncertainties relating to: the level of worldwide demand for power semiconductors and power semiconductor assemblies; the level of investment in power electronic equipment, electrification of transport systems, alternative power generation and high quality power transmission and distribution; and fluctuations in exchange rates between Canadian Dollars, Sterling, US dollars and Euros. As a consequence of these and other risks and uncertainties, shareholders and potential investors must make their own independent judgments about the accuracy and reliability of the Company's expectations. Dynex disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.
About the Company
Dynex designs and manufactures high power semiconductors, transistor modules and other electronic assemblies and components. The company's power products are used worldwide in power electronic applications including electric power transmission and distribution, renewable and distributed energy, marine and rail traction motor drives, aerospace, electric vehicles, industrial automation and controls and power supplies. Dynex Semiconductor Ltd. is its only operating business and is based in Lincoln, England. In 2008, a majority of the shares of Dynex were acquired by Zhuzhou CSR Times Electric Co., Ltd. In April 2016 this company changed its name to Zhuzhou CRRC Times Electric Co., Ltd.
Zhuzhou CRRC Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China. It is listed on the Hong Kong Stock Exchange. CRRC Times Electric is mainly engaged in the research, development, manufacture and sales of locomotive train power converters, control systems and other train-borne electrical systems, as well as the development, manufacturing and sales of urban railway train electrical systems. In addition, CRRC Times Electric is also engaged in the design, manufacturing and sales of electric components including power semiconductor devices for the railway industry, urban railway industry and non-railway purposes.
Further information on CRRC Times Electric can be found at www.tec.crrczic.cc/en.
All monetary values expressed in this release are in Canadian Dollars unless stated otherwise.
Neither 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 release.
SOURCE Dynex Power Inc.
For further information: Clive Vacher, President and Chief Executive Officer; Alan Lyons, Chief Financial Officer, Dynex Power Inc., Tel: +44 1522 500 500, Email: email@example.com