MONTRÉAL, March 24, 2016 /CNW Telbec/ - Logistec Corporation (TSX: LGT.A LGT.B), a marine and environmental services provider, today announced that it has completed a transaction with the minority shareholders of Sanexen Environmental Services Inc. ("Sanexen"), a subsidiary of Logistec, to acquire the remaining 29.8% equity interest that it does not already own in Sanexen for an aggregate price of approximately $43.8 million. Sanexen is a leading Montréal-based environmental solutions provider, specialized in site remediation and water main rehabilitation using its proprietary Aqua-Pipe technology.
As part of the transaction, the minority shareholders of Sanexen, consisting of 12 management team members, exchanged their common shares in the capital of Sanexen for preferred shares of Sanexen having an aggregate value of approximately $43.76 million, resulting in Logistec holding 100% of the common shares in the capital of Sanexen. The preferred shares issued to the minority shareholders of Sanexen do not carry any voting or dividend right.
Immediately following the share exchange, Logistec and the minority shareholders of Sanexen have entered into a put and call option agreement pursuant to which Logistec was granted call options, exercisable in whole or in part at any time, to acquire from the minority shareholders approximately $15.92 million of preferred shares of a first class for cash, and to acquire from the minority shareholders approximately $27.84 million of preferred shares of a second class in exchange for a fixed number of Class B subordinate voting shares in the capital of Logistec (754,015 shares in total). Pursuant to the agreement, each minority shareholder of Sanexen was granted a put option to sell to Logistec his preferred shares of the first class upon certain events, including termination of employment, and a put option to sell to Logistec his preferred shares of the second class as to 1/5 on each of the first five anniversaries of the signature of the agreement, at the same price as the call options granted to Logistec. A discount may be applied to the purchase price in certain circumstances.
It is contemplated that these minority shareholders will remain employed by Sanexen or its subsidiaries in their current functions following the transaction, and Logistec does not anticipate any significant effect on its business or affairs as a result of the transaction.
The transaction has been unanimously approved by the board of directors of Logistec. Among the factors considered by the board of directors of Logistec in approving the transaction was a fairness opinion received from PricewaterhouseCoopers LLP to the effect that the consideration to be paid for the transaction is fair, from a financial point of view, to Logistec.
"Over the years, Sanexen has developed innovative methods to resolve environmental challenges and is now capitalizing on its excellent reputation as a solutions provider in North America and internationally," said Madeleine Paquin, President and CEO of Logistec. "Sanexen has a solid track record of healthy growth and innovation, a dedicated leadership team, expert scientists and technicians, as well as an expanding global portfolio of clients. These exceptional attributes, along with favorable growth prospects in its industry, made it very timely for us to complete this transaction and we are excited to have Sanexen's leadership team on board as shareholders of Logistec."
Over the last five years, Sanexen has achieved a revenue compounded annual growth rate of 15.82%.
"Our industrial, municipal and governmental customers are faced with a wide range of environmental challenges. With this transaction, Logistec is clearly demonstrating its commitment to further developing its leadership in the environmental sector," added Ms. Paquin. "Our expertise and proprietary technologies offer substantial growth opportunities. Of equal importance, Sanexen and Logistec share the same culture of customer service excellence, understanding the marketplace, and developing opportunities based on real customer needs."
Sanexen's portfolio includes site remediation affiliates in Québec, the Canadian Arctic and France. Its made-to-measure technologies remove contaminants and restore land for new developments, notably for industrial and commercial use.
Sanexen has also developed a proprietary technology for the trenchless rehabilitation of water mains, commercialized under the name Aqua-Pipe. Approximately 1,000 kilometres have been successfully installed so far across North America, including New York, Boston, Toronto, and Montréal, as well as in New Zealand. Upgrading drinking water systems require substantial investments and Aqua-Pipe is the ideal solution to meet this demand. Furthermore, Niedner Inc., which manufactures Aqua-Pipe, is owned by Sanexen. The plant located in Coaticook, Québec, also manufactures fire hoses for the U.S. Forest Service.
The transaction is a "related party transaction" under Multilateral Instrument 61-101. Since the transaction did not require the approval of the shareholders of Logistec under applicable laws and the rules of the Toronto Stock Exchange, Logistec determined that it was not necessary to provide for a period of 21 days between the filing of a material change report and the completion of the transaction.
Logistec Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in over 30 ports and terminals in eastern North America. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, and marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial, municipal and other governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and woven-hose manufacturing.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, Logistec's shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company's website at www.logistec.com.
Sanexen Environmental Services Inc. provides trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation (soil, groundwater, buildings, lagoons and underground tanks), risk assessment, and woven-hose manufacturing. Sanexen owns Aqua-Pipe technology, a process involving structural lining with minimal excavation, which creates a new structural pipe made of composite materials within aging pipes that have reached the end of their useful life. Sanexen also owns Niedner Inc., which manufactures the structural lining and resin used in the Aqua-Pipe process, as well as large-diameter woven hoses. More information can be obtained on Sanexen's website at www.sanexen.com.
This press release contains forward-looking information within the meaning of applicable securities legislation. This forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "contemplate", "plan", "foresee" or "believe", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Without limiting the generality of the foregoing, statements with respect to the anticipated effect of the transaction on Logistec's business or affairs constitute forward-looking information. This forward-looking information expresses, as of the date of this press release, the estimates, predictions, projections, expectations or opinions of Logistec about future events or results. Although Logistec believes that the expectations produced by this forward-looking information are founded on valid and reasonable bases and assumptions, this forward-looking information is inherently subject to important uncertainties and contingencies, many of which are beyond Logistec's control. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed include the "Performance Factors" and the risks examined under "Business Risks" in Logistec's annual report. The reader of this press release is thus cautioned not to place undue reliance on this forward-looking information. Logistec undertakes no obligation to update or revise this forward-looking information, except as required by law.
Logistec and logo are registered trademarks in Canada and in the USA
Aqua-Pipe is a registered trademark in Canada and in the USA
SOURCE Logistec Corporation
For further information: Jean-Claude Dugas, CPA, CA, Vice-President, Finance, Logistec Corporation, [email protected], (514) 985-2345