Kelso & Company to make an all-cash offer for all the common shares of
EACOM for C$0.38 per common share, representing a premium of
approximately 46.2% to the closing price of the shares on March 21, 2013 and a premium of
63.7% to the 30-day volume weighted average price ("VWAP").
EACOM's Board of Directors unanimously recommends that shareholders
accept the Kelso offer.
EACOM directors, senior executive officers and certain significant
shareholders have entered into lock-up agreements, representing
approximately 44% of the fully-diluted shares, with Kelso and have
agreed to tender all of their common shares to the Kelso offer.
MONTREAL and VANCOUVER, March 22, 2013 /CNW Telbec/ - EACOM Timber
Corporation (TSXV: ETR) ("EACOM", or the "Company") and Kelso & Company
jointly announce that Kelso & Company, through a wholly owned
subsidiary ("Kelso") has agreed, subject to certain conditions, to make
a take-over bid to acquire all of the common shares of EACOM for C$0.38
in cash per common share (the "Offer"). EACOM and Kelso have entered
into a support agreement (the "Support Agreement") in connection with
The Offer represents a premium of 46.2% to EACOM's closing share price
of C$0.26 on the TSX Venture Exchange on March 21, 2013 and a premium of 63.7% to the VWAP of the EACOM common shares for the 30-day period ending on
"We are pleased with Kelso's offer, which recognizes the Company's
inherent value. Kelso is extremely well capitalized and is in a
position to provide the capital to implement EACOM's long term growth
and mill modernization plan. We believe that the Offer is in the best
interests of the Company and its stakeholders, including its
shareholders and employees", said Terry Lyons, Chair of the Special
Committee of the Board of Directors of EACOM.
The Special Committee of the Board of Directors of EACOM, following
review of the terms and conditions of the Offer and consideration of a
number of factors unanimously recommended the Offer to EACOM's Board of
Directors. The Special Committee and the Board of Directors have
received an opinion from each of Canaccord Genuity Corp. and Sanabe &
Associates LLC that as of the date of the opinion and subject to the
assumptions outlined therein, the consideration payable to EACOM
shareholders under the transaction is fair, from a financial point of
EACOM's Board of Directors, after receiving the recommendation of the
Special Committee, has unanimously determined that the Offer is in the
best interests of EACOM and its shareholders and unanimously recommends
that shareholders accept the Offer.
The directors and senior executive officers of EACOM, as well as certain
significant securityholders of EACOM, have entered into lock-up
agreements with Kelso and have agreed to tender all of their common
shares (including common shares issuable upon the exercise of options
and warrants) to the Offer. Common shares representing approximately
44% of the issued and outstanding EACOM common shares on a fully
diluted basis are subject to the lock up agreements.
The Support Agreement provides that the Board of Directors of EACOM may
under certain circumstances terminate the Support Agreement in favour
of an unsolicited superior proposal, subject to the payment of a break
fee of C$7.0 million and subject to a right by Kelso to match such
Full details of the Offer will be included in a take-over bid circular
that is expected to be mailed to EACOM shareholders in the first week
of April. The Offer will be open for a period of not less than 35 days
and the Offer will be subject to certain customary conditions,
including there having been validly deposited and not withdrawn at the
expiry time of the Offer that number of EACOM common shares that
constitutes at least 66⅔ per cent of the outstanding common shares of
EACOM on a fully diluted basis and receipt of all required regulatory
approvals. The Offer is not subject to any financing condition.
EACOM Timber Corporation is a TSX-V listed company. The business
activities of EACOM consist of the manufacturing, marketing and
distribution of lumber, wood chips and woodbased value-added products,
and the management of forest resources. EACOM owns eight sawmills, all
located in Eastern Canada, and related tenures. The mills are Timmins,
Nairn Centre, Gogama, Elk Lake and Ear Falls in Ontario, and Val-d'Or,
Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario and
Ste-Marie, Quebec are currently idled. As a result of improved market
conditions, operations in Val-d'Or and Matagami which had been
temporarily shut down in 2011 resumed during the third quarter of 2012.
The mill in Timmins was seriously damaged by fire in January 2012 and
remains shut down. EACOM also owns a lumber remanufacturing facility in
Val-d'Or, Quebec, and a 50% interest in an "I" joist plant in Sault
Kelso & Company is one of the oldest and most established firms
specializing in private equity. Since 1980, Kelso has invested in over
115 companies in a broad range of industry sectors with aggregate
initial capitalization at closing of over $40 billion. The firm is
currently investing its eighth investment partnership, Kelso Investment
Associates VIII, L.P., with $5.1 billion of committed capital. For
more information, please visit www.kelso.com.
The TSX Venture Exchange has neither approved nor disapproved the
content of this press release. All director and officer appointments
are subject to TSX Venture Exchange approval.
All statements in this news release that are not based on historical
facts are "forward-looking statements". In this news release, such
forward-looking statements include statements regarding the ability of
Kelso to complete the take-over bid, the anticipated benefits of the
take-over bid, the anticipated benefits to EACOM shareholders of the
take-over bid, the timing of the take-over bid and the anticipated
receipt of regulatory approvals for the take-over bid. While management
has based any forward-looking statements contained herein on its
current expectations, the information on which such expectations were
based may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties and other factors, many of which are beyond our
control and could cause actual results to materially differ from such
statements. Such risks, uncertainties and other factors include, but
are not necessarily limited to, those set forth under "RISKS AND
UNCERTAINTIES" in the Company's current MD&A, and under "RISK FACTORS"
in the Company's Filing Statement dated January 8, 2010.
Additional information relating to EACOM is available at www.eacom.ca and on SEDAR at www.sedar.com.
For further information:
Executive Vice-President and Chief Financial Officer
(514) 395-0375 ext. 259