LONGUEUIL, QC, March 1, 2013 /CNW Telbec/ - Section Rouge Média Inc. ("Section Rouge Média") (TSX VENTURE: SRO), a company listed on the TSX Venture Exchange, is pleased to announce that it has entered into an arm's length letter agreement (the "Agreement") dated on March 1, 2013 with 9124-3204 Québec Inc. pursuant to which Section Rouge Média will, subject to a number of conditions, acquire all of the issued and outstanding securities of Les Emballages Cartex Inc. ("Cartex"). The transaction will constitute a reverse take-over (the "RTO") of Section Rouge Média under the policies of the TSX Venture Exchange (the "Exchange").
Cartex, a corporation incorporated on September 17, 1996 governed by the Business Corporations Act (Québec), offers a complete range of products and services in packaging. It manufactures display stand, stylized presentation box, transportation box, separations and protection corners and protections for transportation of plants and flowers, mainly in cardboard. It offers also a vast range of top quality wrapping paper. Cartex carries on its business in St-Pie, Province of Quebec since September 1996 and in Dorval, Province of Québec since the acquisition of its Imacor division in June 2010. For more information please visit www.emballagescartex.com. In its unaudited year-end unaudited statements dated March 31, 2012, Cartex showed a profit of $144,821 ($231,258 in 2011) on revenues of $6,408,549 ($5,705,510 in 2011). After the RTO, Section Rouge Média will continue to conduct its current activities which consists essentially in the edition of the publication "Ma revue de machineries et d'équipements agricoles" in addition to Cartex's.
Pursuant to the Agreement, Cartex will become a wholly-owned subsidiary of Section Rouge Média and the shareholder of Cartex, 9124 -3204 Québec Inc., will hold approximately 59% of the common shares of Section Rouge Média. The sole shareholder of 9124 -3204 Québec Inc. is Alain L'Heureux. After the closing of the RTO and the related transactions identified below, Alain L'Heureux will hold, via 9124 -3204 Québec Inc., approximately 59% of the total common shares of Section Rouge Média and no other person will hold 20% or more of Section Rouge Média. Mr. L'Heureux resides in St-Roch-de-Richelieu, Province of Quebec. There are no non arm's-length parties involved in this transaction.
As a condition of the transaction, Section Rouge Média will hold a meeting (the "Meeting") of its shareholders to approve the RTO pursuant to the rules and policies of the Exchange. The Section Rouge Média shareholders will also be asked to approve a consolidation (the "Share Consolidation") of the common shares of Section Rouge Média on a basis of five old shares for one new share (a "Consolidated Share"). If approved, the Share Consolidation will become effective prior to completion of the RTO. Section Rouge Média currently has 39,731,566 common shares outstanding, with the result that 7,949,313 Consolidated Shares will be outstanding just prior to the RTO. The former shareholder of Cartex will be issued 20,000,000 Consolidated Shares at an ascribed price of $0.10 each, reflecting a $2,000,000 valuation of Cartex.
In connection with the RTO, Section Rouge Média has agreed to pay a finder's fee consisting of 900,000 Consolidated Shares at a deemed price of $0.10 per share subject to the acceptance of the Exchange.
At the Meeting, Cartex will have the right to nominate up to five of the directors of the Section Rouge Média board of directors of Section Rouge Média comprised of six directors. The shareholders will also be asked to approve a new name for Section Rouge Média: Groupe Cartex-Imacor Inc.
The current board of directors of Section Rouge Média consists of Jean-Pierre Rancourt, Ronald Keenan, Luc Bergeron and Alain Grenier, with Jean-Pierre Rancourt being the current President and CEO and Martyne Simard, the Chief Financial Officer. It is the intention of the parties that, following the RTO, Alain L'Heureux will become President, CEO and a director of Section Rouge Média, and Pierre Denoncourt CPA, CA will be the Chief Financial Officer. Jean-Pierre Rancourt will remain director and the other directors will be determined at the Meeting.
Section Rouge Média will make a brokered private placement of a minimum 5,000,000 Consolidated Shares at $0.10 each, for minimum proceeds of $500,000, to close conditional upon and at the same time as closing of the RTO. The proceeds of this offering will be used for working capital needs of Section Rouge Média following the RTO. Section Rouge Média will identify a broker for the foregoing financing in due course.
Following the closing of the RTO and the foregoing transactions, Section Rouge Média will have approximately 33,846,313 Consolidated Shares issued and outstanding.
Completion of the RTO is conditional upon, among other things, due diligence by Section Rouge Média and Cartex and the negotiation and execution of definitive documentation.
Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Section Rouge Média should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: SECTION ROUGE MEDIA INC.
For further information:
Section Rouge Média Inc.
Jean-Pierre Rancourt, President and CEO
Tel: 450-677-2556 #222