UPDATE - In a transaction at $7.87 per share in cash: Mill Road Capital to
Privatize Cossette in Partnership with Management - Fully Endorses Management
Leadership and Strategic Vision
KOS (TSX)
QUÉBEC CITY,
Under the terms of the Agreement, Mill Road will acquire all of the issued and outstanding subordinate voting shares of the Company (the "Shares") for a consideration of
The all-cash consideration of
"We are very pleased with this transaction for many reasons: it better reflects Cossette's true value and exemplifies our commitment to maximize value for all our shareholders," commented
As a private company, Cossette will continue to be led by
Management Commitment
Senior Management Shareholders (as defined below) and other officers of Cossette, representing approximately 30% of the Shares, have each entered into a support and voting agreement pursuant to which they have agreed, subject to certain conditions, to vote their Shares in favour of the Transaction (collectively, the "Support and Voting Agreements").
The key senior management shareholders of Cossette (the "Senior Management Shareholders"), including Messrs.
Transaction Process
The Transaction will be effected by way of a statutory amalgamation of Cossette with a wholly-owned subsidiary of Mill Road under Part 1A of the Companies Act (Québec), requiring the approval of (i) two-thirds of the votes cast by holders of Shares and (ii) a simple majority of the votes cast by shareholders other than the Senior Management Shareholders (the "Public Shareholders"). A special meeting of shareholders will be held to consider the Transaction on or about
Subject to receiving the required Cossette shareholder and regulatory approvals, if any, and the satisfaction of the other customary conditions, it is anticipated that this transaction would close before the end of 2009.
Other Transaction Terms
Cossette has agreed not to solicit competing acquisition proposals for the Company but has retained the ability to consider a competing acquisition proposal not solicited by it which the Board believes, in the exercise of its fiduciary duties, represents a superior proposal and to terminate the Agreement in the event of such superior proposal, subject to Mill Road's right to match or being paid a termination fee of
Board Approves Unanimously
Cossette's strategic review process was led by the special committee (the "Special Committee") of the Board of Directors (the "Board") of the Company comprised of four independent directors, namely: Messrs. Jean Lavigueur (Chairman),
BMO Capital Markets acted as exclusive financial advisor to Cossette through the Company's strategic review process. In reviewing the Transaction, the Special Committee received an opinion from RBC Capital Markets and the Special Committee and the Board received an opinion from BMO Capital Markets that the consideration to be received pursuant to the Transaction is fair from a financial point of view to the Public Shareholders. A copy of the fairness opinions, factors considered by the Special Committee and the Board and other relevant background information will be included in the management information circular that will be sent to Cossette shareholders in connection with the special meeting to consider the Transaction.
Speaking on behalf of the Special Committee, Jean Lavigueur said: "In the past three months, Cossette, through its financial advisor, has sought interest from a wide variety of parties with respect to a potential sale of the Company. Through an extensive sale process, the Company contacted approximately 125 potential strategic and financial buyers from across
A copy of the Agreement, the Support and Voting Agreements, the fairness opinions and certain related documents will be filed with Canadian securities regulators and will be available at the Canadian SEDAR website at www.sedar.com in due course. The management information circular in connection with the special meeting of shareholders to consider the Transaction is expected to be mailed to shareholders over the coming weeks.
Cossette's Recommendation to Reject the Cosmos Offer
Cossette further announced today that its Board unanimously approved, following the report and unanimous recommendation of the Special Committee, to recommend to shareholders that they reject the unsolicited offer by Cosmos to acquire all of the Shares for
Cossette Updates on its Shareholder Rights Plan
Cossette also announced that its Board has resolved, in accordance with Cossette's shareholder rights plan dated
The Rights Plan was adopted on
About Cossette
Cossette Inc. offers a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world. A customer-driven organization built around highly specialized business units, Cossette also offers Convergent Communications(TM), a unique working method that brings added value to the client by integrating various services offered by the Group, including strategic planning and research, advertising, media buying and channel planning, sales promotion, direct response, database and direct marketing, customer relationship management, interactive marketing and technology solutions, public relations, organizational communication and change management, sponsorship and alliance marketing, branding and design, ethnic marketing, business-to-business communications (B2B practices) and print and video production. Cossette has approximately 1,485 employees and offices in
About Mill Road Capital
Mill Road Capital is a Greenwich, Connecticut-based investment firm formed by a core group of former professionals from The Blackstone Group. Mill Road focuses exclusively on investing in outstanding small publicly-traded companies. It invests on behalf of a prominent international group of limited partners including public pension funds, foundations, endowments and insurance companies. Mill Road has flexible capital with the ability to purchase shares in the open market, buy large block positions from existing shareholders, provide capital for growth or acquisition opportunities, or partner with management and sponsor going-private transactions.
%SEDAR: 00012070EF
For further information: For further information: Financial Analysts only: Martin Faucher, Vice-President and Chief Financial Officer, (418) 521-3784; Investors: Francis Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633; Medias: Sylvie Isabelle, Optimum Public Relations, (418) 521-3184; Source: Cossette Inc., www.cossette.com
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