QUÉBEC CITY, Dec. 20, 2013 /CNW Telbec/ - Novik Inc. ("Novik") (TSXV: NVK) is pleased to announce that, further to the announcement, on November 18, 2013, of the signature of a non-binding letter of intent with Clearview Capital LLC, Novik has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Clearview Capital Fund III, LP ("Clearview") and a newly constituted entity, 9293-3985 Québec Inc. (the "Purchaser"), pursuant to which the Purchaser will acquire all of the issued and outstanding common shares (the "Shares") of Novik (the "Transaction"), including the Shares issuable upon the conversion of stock options of Novik, for a cash consideration of $0.85 per Share (the "Purchase Price"), representing an aggregate purchase price of approximately $45,000,000, plus the assumption of certain debt and debt-like items for an enterprise value of approximately $47,000,000.
The Purchase Price represents a premium of approximately 21.9% to the 30-day volume-weighted average trading price of the Shares ("VWAP") for the period ending on November 18, 2013 and a premium of approximately 35.2% to the 90-day VWAP for the period ending on November 18, 2013.
The Transaction has been unanimously approved by the Board of Directors of Novik (the "Board") following the unanimous recommendation of a special committee of independent directors of Novik (the "Special Committee"). The Board also unanimously recommends that shareholders vote in favour of the Transaction at the special meeting of shareholders to be called to approve the Transaction.
Michel Gaudreau, the Chairman of the Board and President and Chief Executive Officer of Novik and the holder, directly or indirectly, of 19,425,000 Shares and options to purchase 750,000 common shares of Novik, and all officers and directors of Novik holding 463,000 Shares and options to purchase 2,850,000 common shares of Novik, collectively representing approximately 40.4% of the outstanding Shares (on a non-diluted basis), have signed irrevocable lock-up agreements with Clearview (the "Lock-Up Agreements") pursuant to which they have undertaken, among other matters, to vote in favour of the Transaction and against any alternative acquisition proposal. The Lock-Up Agreements also grant a proxy in favour of Clearview to exercise the voting rights attached to the Shares held, directly or indirectly, by Mr. Gaudreau and the officers and directors of Novik. The Lock-Up Agreements automatically terminate on such date that is the earlier of (i) the date upon which Novik and Clearview have mutually agreed in writing to terminate the Arrangement Agreement, (ii) the termination of the Arrangement Agreement resulting from a breach by Clearview and the Purchaser, (iv) four (4) months following the termination of the Arrangement Agreement for any other reason, and (v) the closing of the Transaction.
Clearview Capital LLC and Clearview have also entered into voting agreements with other holders of Shares representing approximately 15% of the outstanding Shares (on a non-diluted basis) who have agreed to support and vote their Shares in favour of the Transaction, subject to certain conditions.
Upon closing of the Transaction, each issued and outstanding stock option of Novik shall be transferred to Novik in exchange for a cash payment equal to the excess, if any, of the Purchase Price over the applicable exercise price of such stock option, after which the stock option plan of Novik shall be cancelled.
PricewaterhouseCoopers LLP has provided an opinion to the Special Committee and the Board that, subject to the assumptions, qualifications and limitations provided therein, the Purchase Price is fair, from a financial point of view, to the shareholders of Novik.
The Transaction will be structured as a court approved plan of arrangement pursuant to the Business Corporations Act (Québec) and will be subject to the approval of not less than 66 2/3% of the votes cast by shareholders present in person or by proxy at the special meeting of shareholders of Novik. Full details of the Transaction will be included in the Novik management information circular which is expected to be mailed to its shareholders in January 2014 in view of a special meeting of shareholders expected to be held in February 2014. The Transaction is also subject to customary closing conditions, and is expected to close in February 2014. The Transaction is not subject to any financing condition.
The Arrangement Agreement provides for, among other things, a non-solicitation covenant on the part of Novik subject to customary fiduciary out provisions. The Arrangement Agreement also provides Clearview with a "right to match" and requires Novik to pay a termination fee in the amount of $1.8 million to Clearview under certain circumstances, including in the event that the Board accepts any unsolicited superior proposal. Clearview has agreed to pay Novik a termination fee of $1.8 million under certain circumstances, including if the Transaction is not completed as a result of a breach of representations or covenants by Clearview. In the event of any unsolicited superior proposal, Novik will still be required to convene a special meeting of shareholders to approve the Transaction, subject to certain conditions.
PricewaterhouseCoopers Corporate Finance Inc. is acting as financial advisor and McCarthy Tétrault LLP is acting as legal advisor to Novik. Blake, Cassels & Graydon LLP is acting as legal advisor to Clearview.
Novik (NVK) is a leader in the design, manufacture and distribution of innovative polymer exterior siding, roofing coverings and accessories that replace traditional materials such as stone, brick or wood shingles. These products target the world-wide residential and commercial construction industry.
Clearview Capital, LLC is a private investment firm based in Old Greenwich, CT that invests in and develops mid-sized, North American companies in partnership with management. The firm has a long history of assisting strong management teams in the execution of their growth strategies. Clearview Capital LLC has formed Clearview, an institutionally‐backed private equity fund focused primarily on the acquisition and development of high-potential manufacturing and service businesses located in the United States and Canada.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This news release contains forward-looking information, as such term is defined in applicable securities laws. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate and similar expressions, or are those which, by their nature, refer to future events. Forward-looking information includes, without limitation, the outcome of the proposed Transaction and other similar information concerning anticipated future events, conditions or results that are not historical facts. This press release also contains forward-looking statements and information concerning the anticipated timing and completion of the Transaction. Novik provided these anticipated times in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare meeting materials for mailing, the timing of receipt of the necessary regulatory and court approvals, and the satisfaction of and time necessary to satisfy the conditions to the closing of the Transaction. These dates may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary regulatory or court approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the Transaction. In addition, the Transaction is subject to a number of conditions which are typical for transactions of this nature. Failure to satisfy any of these conditions may result in the termination of the definitive Arrangement Agreement and the Transaction may not be completed. Readers are cautioned that the foregoing list of factors is not exhaustive. Novik cautions readers that all forward-looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Novik's control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and Novik assumes no obligation to update or alter any forward-looking information unless required by applicable laws.
Neither the 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: Novik Inc.
For further information:
Chairman of the Board and
President and Chief Executive Officer
Tel. : (418) 878-6161
E-mail : [email protected]
EVP & General Manager and
Interim Chief Financial Officer
Tel. : (418) 878-6161
E-mail : [email protected]
Clearview Capital LLC
James G. Andersen
Co-Founder & Co-Managing Partner
1445 East Putnam Ave.
Old Greenwich, Connecticut
Tel.: (203) 698-2777
E-mail: [email protected]