CALGARY, March 3, 2020 /CNW/ - Further to the February 23, 2020 press release of Strad Inc. ("Strad"), Lyle Wood, on behalf of 2238399 Alberta Ltd. ("PurchaserCo") and the other Ongoing Shareholders (defined herein), reports that PurchaserCo entered into an arrangement agreement (the "Arrangement Agreement") with Strad, pursuant to which PurchaserCo will acquire all of the issued and outstanding Class "A" common shares (collectively, the "Strad Shares") of Strad and take Strad private pursuant to a series of steps under a plan of arrangement pursuant to the Business Corporations Act (Alberta) (the "Arrangement") for cash consideration of CDN$2.39 per share.
PurchaserCo was formed under the laws of Alberta as an acquisition vehicle for the Arrangement, at the control and direction of Lyle Wood, a director of Strad subject to early warning reporting requirements under applicable Canadian securities laws, Andrew Pernal, President and Chief Executive Officer and a director of Strad, Michael Donovan, Chief Financial Officer of Strad, Shane Hopkie, Chief Operating Officer of Strad, and certain other employees of Strad including Clint Crook, Eric Ducharme and Chris Allison and their respective affiliates (collectively, the "Ongoing Shareholders").
The Arrangement is valued at approximately CDN$130 million, excluding assumed debt and inclusive of the value of approximately 21.4% of the outstanding Strad Shares held directly or indirectly or over which control and direction is exercised by the Ongoing Shareholders. PurchaserCo has obtained binding commitments, subject to certain customary conditions, from financial partners to complete the Arrangement and the Arrangement is not subject to any financing condition.
The Arrangement is subject to customary Toronto Stock Exchange, court and regulatory approvals, as well as "majority of the minority" approval under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). For the purposes of the "majority of the minority" approval requirement under MI 61-101, the votes cast by Ongoing Shareholders and their affiliates will be excluded.
Early Warning Requirements
Both immediately prior to and after the execution of the Arrangement Agreement, Lyle Wood held or controlled, directly or indirectly, an aggregate of 8,556,997 Strad Shares, representing approximately 15.7% of the total number of issued and outstanding Strad Shares. Collectively, the Ongoing Shareholders own or exercise control or direction over 11,625,434 Strad Shares, representing in aggregate approximately 21.4% of the currently issued and outstanding Strad Shares.
Together with Lyle Wood, each of the other Ongoing Shareholders have confirmed their interest in pursuing the Arrangement. In connection with the Arrangement, the Ongoing Shareholders have agreed to rollover certain Strad Shares held by them and to enter into certain post-closing governance arrangements, all conditioned on the completion of the Arrangement.
Upon closing of the Arrangement, it is expected that Strad will amalgamate with PurchaserCo and ownership of the resulting entity will remain with the Ongoing Shareholders and certain other current employees. PurchaserCo intends to cause the Strad Shares to cease to be listed on the Toronto Stock Exchange and to cause Strad to submit an application to cease to be a reporting issuer under applicable Canadian securities laws and to otherwise terminate Strad's public reporting requirements.
Strad's head office is located at Suite 1200, 440 – 2 Avenue SW, Calgary, Alberta T2P 5E9.
An early warning report will be filed by Lyle Wood in accordance with applicable Canadian securities regulatory authorities.
FOR FURTHER INFORMATION OR TO OBTAIN A COPY OF THE EARLY WARNING REPORT FILED IN CONNECTION WITH THIS MATTER, PLEASE CONTACT:
Mr. Lyle Wood
31087 Swift Creek Terrace
Calgary, Alberta T3Z 0B7
Tel: (587) 350-3184
Suite 1200, 440 – 2nd Avenue SW
Calgary, Alberta T2P 5E9
Attention: Andy Pernal, President and Chief Executive Officer
Tel: (403) 775-9202
This press release may contain forward-looking statements including anticipated completion of the Arrangement and various matters relating to the completion of the transactions contemplated by the Arrangement Agreement. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual events to differ from those anticipated. These risks include, but are not limited to: risks inherent in the nature of the proposed Arrangement, including failure to realize the anticipated benefits thereof; incorrect assessment of the value of Strad and the Strad Shares; that PurchaserCo will be unable to obtain the financing required for the Arrangement; that holders of Strad Shares will not support the Arrangement; the failure to obtain the required shareholder, court and other third party approvals as may be required in connection therewith; and that any of the other conditions precedent to completion of the Arrangement will not be satisfied or waived (where permitted). There are no assurances the Arrangement will be completed on the terms anticipated, or at all. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. The forward-looking statements contained in this news release are made as of the date of this news release and Lyle Wood does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
SOURCE Strad Inc.