TORONTO, Nov. 20 /CNW/ - Student Transportation of America Ltd. ("STA")
announced today that it has entered into a definitive support agreement
("Support Agreement") pursuant to which STA will offer to acquire (the
"Offer") all of the outstanding common shares ("Common Shares") of Canadex
Resources Limited ("Canadex") for cash consideration of $5.72 per Common Share
and all of the outstanding Class A preferred shares ("Preferred Shares") of
Canadex for cash consideration of $1.00 per Preferred Share.
Canadex is a transportation and energy company consisting of two distinct
and separately managed business segments. The school bus division is one of
the largest independent school bus operators in Ontario and its energy
division holds non operating positions in oil & gas investments in the U.S.
The consideration under the Offer represents a 35% premium over the
market price of the Common Shares as of April 27, 2007, the day prior to the
announcement of the strategic review process by Canadex, and a 12% premium
over the market price of the Common Shares as of the close on November 19,
2007. The cash consideration under the Offer will be financed with cash
balances on hand at the time of closing and STA's existing credit facility.
Commenting on the offer, Chairman and CEO of STA, Denis J. Gallagher
said, "This is a strategic acquisition for STA and our largest investment in
Canada. Once the deal is closed, it will increase our Canadian revenues by 67%
and our subsidiary Student Transportation of Canada (STC) will have over $40
million of revenues in Canada and will be the country's third largest provider
of school transportation services. We expect the deal to be accretive post-
The board of directors of Canadex, based on the recommendation of its
special committee of independent directors, has unanimously resolved to
recommend that holders of Common Shares and Preferred Shares of Canadex accept
the Offer. Sun Pac Foods Limited and John Riddell, who collectively hold 35%
of the outstanding Common Shares and 70% of the outstanding Preferred Shares,
have agreed to tender all Common Shares and Preferred Shares that they own to
the Offer. KPMG Corporate Finance is acting as financial advisor to Canadex
and has provided the board of directors with a fairness opinion that the
consideration to be received by holders of the Common Shares and Preferred
Shares pursuant to the Offer is fair from a financial point of view.
The Support Agreement provides for the payment by Canadex of a break fee
equal to $1.4 million under certain circumstances, and reimbursement by
Canadex of STA's expenses up to $500,000 under certain circumstances. The
Support Agreement also provides for reimbursement by STA of Canadex's expenses
up to $500,000 under certain circumstances. In addition, the Support Agreement
also includes a non-solicitation covenant on the part of Canadex and a right
in favour of STA to match any competing offers.
The Offer will be conditional upon acceptance by holders of not less than
66 2/3% of the Common Shares and Preferred Shares as well as receipt of all
necessary regulatory approvals and other customary conditions, including the
entering into of non-competition and/or employment agreements with certain
members of management. A take-over-bid circular containing the terms of the
Offer will be mailed to the holders of Common Shares and Preferred Shares,
together with a directors' circular and other related documents, on or before
December 11, 2007. The Offer, unless extended, will expire 36 days from its
commencement, subject to receipt of any required regulatory approvals.
Acquisition Counsel and Financing
BMO Capital Markets acted as financial advisors to STA on the
transaction. Goodmans LLP of Toronto and Patton Boggs of Dallas, Texas,
provided legal counsel in connection with the offer and Alluence Capital
Advisors of Mississauga assisted in the due diligence.
Student Transportation of America Ltd. Profile
Student Transportation is the fourth-largest provider of school bus
transportation services in North America, conducting operations through local
operating subsidiaries. Student Transportation has become a leading school
transportation and management company by aggregating operations through the
consolidation of existing providers and conversion of in-house operations. The
company currently operates more than 5,000 school vehicles in North America.
For more information, please visit www.sta-ips.com.
This news release contains "forward-looking statements" within the
meaning of applicable securities laws, which reflects the expectations of
management regarding STA's results of operations, expense levels, cost of
capital, financial leverage, seasonality, cash flows, performance, liquidity,
borrowing availability, financial ratios, ability to execute the STA's growth
strategy and cash distributions. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "track", "targeted", "estimate", "anticipate", "believe",
"should", "plans" or "continue" or similar expressions suggesting future
outcomes or events. These forward looking statements reflect STA's current
expectations regarding anticipated future events, results, circumstances,
performance or expectations, which are not historical facts. Forward looking
statements involve significant risks and uncertainties, and should not be read
as guarantees of future performance or results, and will not necessarily be
accurate indications of whether or not or the times at which or by the
performance or results will be achieved. A number of factors could cause our
actual results to differ materially from the results discussed, expressed or
implied in any forward-looking statement made by us or on our behalf,
including, but not limited to the factors discussed under "Risk Factors" in
our Annual Information Form. These forward looking statements are made as of
the date of this news release and, except as required by applicable law, we
undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
For further information:
For further information: Denis J. Gallagher, Chairman and Chief
Executive Officer, Phone: (732) 280-4200, Fax: (732) 280-4213; Patrick J.
Walker, Chief Financial Officer, Phone (732) 280-4200, Fax: (732) 280-4213;
Keith P. Engelbert, Director of Investor Relations, Phone: (732) 280-4200,
Fax: (732) 280-4213, email@example.com