All amounts expressed in CAD$
MONTREAL and WOODSTOCK, ON, July 24, 2014 /CNW Telbec/ - TransForce Inc. (TSX: TFI) (OTCQX: TFIFF), a North American leader in the transportation and logistics industry, and Contrans Group Inc. (TSX: CSS), a diverse provider of specialized transportation services, today announced that they have entered into a Support Agreement for the acquisition by TransForce, for $14.60 in cash per share, of all of the issued and outstanding Class A subordinate voting shares and Class B multiple voting shares of Contrans by way of a friendly, Board-approved take-over bid (the "Offer"). The total equity purchase price is approximately $495 million.
The Support Agreement provides that if all conditions of the Offer have been satisfied or are waived by TransForce, Contrans will declare a special dividend of $0.40 per share in respect of the recent sale of its Waste Transportation segment. Together with the $14.60 per share Offer price, the total consideration of $15.00 represents a premium of approximately 16.7% to the 52-week volume weighted average trading price of Contrans' Class A shares on the Toronto Stock Exchange and a premium of approximately 5.1% to the volume weighted average trading price of Contrans' Class A shares for the ten trading days ended July 24, 2014. The special dividend will be paid to Contrans shareholders of record immediately prior to TransForce taking-up and paying for tendered shares under the Offer. As a result, Contrans shareholders who tender their shares to the Offer will receive the special dividend, if paid.
The Board of Directors of Contrans, after consultation with its financial and legal advisors, has unanimously approved entering into the Support Agreement and unanimously recommends that Contrans shareholders tender their shares to the Offer. Cormark Securities Inc., the financial advisor to Contrans, has provided a fairness opinion to the effect that, as of the date of the opinion and subject to the limitations and qualifications therein, the consideration of $14.60 in cash per share to be received by Contrans shareholders is fair, from a financial point of view, to the Contrans shareholders.
All of Contrans' directors and executive officers, holding in the aggregate 100% of Contrans' Class B shares and approximately 14.1% of its Class A shares, have entered into "soft" lock-up agreements with TransForce, pursuant to which they have agreed to tender all of their Contrans shares to the Offer.
"I have admired the progress of Contrans for some time. Contrans has a culture similar to that of TransForce, strategically acquiring companies that add value for its shareholders. Contrans has a history of profitability, is financially sound and has seen steady growth over the years. From transportation facilities located mostly in Canada, Contrans offers customers a wide array of specialized services. This acquisition provides exciting potential for TransForce, adding strong resources, an excellent client base, and importantly, very strong management," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.
"TransForce has a significant market presence that will benefit our operations and possesses many of the same values that have allowed Contrans to operate successfully. I believe the entrepreneurial culture of Contrans will fit in well with TransForce. I am proud of Contrans' management's accomplishments over the past 25 years and look forward to seeing the team continue to flourish as part of the TransForce organization," said Stan Dunford, Chairman and Chief Executive Officer of Contrans.
The Offer is not subject to any financing condition. TransForce has entered into a commitment letter with National Bank of Canada and Royal Bank of Canada to ensure that the required funds will be available to make full payment to complete the Contrans acquisition pursuant to the Offer.
The Support Agreement contains customary deal protection provisions in favour of TransForce for a transaction of this kind.
The Offer is expected to commence on or about August 21, 2014. TransForce will mail a take-over bid circular and related documents, and Contrans will mail a directors' circular, to Contrans shareholders in accordance with the Support Agreement and applicable laws. The Offer will be open for acceptance for a period of not less than 35 days and will be conditional upon, among other things, there being validly deposited or tendered and not withdrawn, a number of Contrans shares that represents at least 662/3% of the outstanding Class A shares and at least 662/3% of the outstanding Class B shares, and at least a majority of the outstanding Class A shares, the votes of which would be included in any minority approval of a subsequent acquisition transaction by TransForce, pursuant to applicable securities regulations. The Offer will be subject to certain customary conditions, including receipt of relevant regulatory approvals and the absence of any material adverse changes with respect to Contrans. Once the minimum acceptance level for the Offer is achieved, TransForce intends to take steps available to it under applicable law to acquire all other outstanding shares of Contrans.
Following successful completion of the Offer, TransForce intends to nominate Stan Dunford, Chairman and Chief Executive Officer of Contrans, for election to the TransForce Board of Directors at the next annual meeting of TransForce's shareholders, expected to be held in April 2015.
National Bank Financial Inc. is acting as financial advisor and Fasken Martineau DuMoulin LLP is acting as legal counsel to TransForce in connection with the Offer. Cormark Securities Inc. is acting as financial advisor and Cassels Brock & Blackwell LLP is acting as legal counsel to Contrans.
| TRANSFORCE CONFERENCE CALL
Friday, July 25, 2014 at 9:00 a.m., Eastern time
Dial-in number: 1-888-231-8191
A presentation is also available at www.transforcecompany.com
A recording of the call will be available until midnight on August 1, 2014 by dialing 1-855-859-2056 or 416-849-0833 and entering passcode 63452988.
TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned, operating subsidiaries. Under the TransForce umbrella, companies benefit from corporate financial and operational resources to build their businesses and increase their efficiency. TransForce companies service the following segments:
- Package and Courier;
- Truckload, which includes specialized truckload and dedicated services;
- Specialized Services, which includes waste management, logistics services and rig moving services.
Contrans has been providing freight transportation services as a publicly-listed company since 1985. With approximately 1,400 power units and 2,600 trailers under management, Contrans is one of the largest freight transportation companies in Canada.
No stock exchange, securities commission or other regulatory authority has approved or disapproved of the information contained herein.
This press release contains "forward-looking statements" within the meaning of applicable securities laws that are intended to be covered by the safe harbours created by those laws, including statements that use forward-looking terminology such as "may", "will", "expect", "anticipate", "believe", "continue", "potential", or the negative thereof or other variations thereof or comparable terminology. Such forward-looking statements may include, without limitation, statements regarding the completion of the proposed transaction and other statements that are not historical facts. While such forward-looking statements are expressed by Contrans and TransForce in good faith and believed by Contrans and TransForce to have a reasonable basis, they are subject to important risks and uncertainties including, without limitation, approval of applicable governmental authorities, the satisfaction or waiver of certain other conditions contemplated by the Support Agreement, and changes in applicable laws or regulations.
Forward-looking statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results. The timing and completion of the proposed acquisition of Contrans is subject to certain conditions, termination rights and other risks and uncertainties. Accordingly, there can be no assurance that the proposed acquisition of Contrans will occur, or that it will occur on the timetable or on the terms and conditions contemplated. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Reliance on forward-looking statements is at investors' own risk.
SOURCE: TransForce Inc.
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