WATERLOO, ON, July 14 /CNW/ - The Board of Directors of Virtek Vision
International Inc. (TSX: VRK) ("Virtek") today unanimously recommended that
Shareholders reject an unsolicited take-over offer from StockerYale Waterloo
Acquisition Inc., a wholly owned subsidiary of StockerYale, Inc. (NASDAQ:
STKR) ("StockerYale') and not tender their shares to the offer. The Directors'
Circular will be mailed to Virtek Shareholders beginning on July 14, 2008.
The Board of Directors has carefully reviewed and fully considered the
StockerYale offer and the recommendations made by Virtek's Special Committee.
The Special Committee recommended to the Board of Directors that Virtek
Shareholders reject the StockerYale offer and not tender their shares to
StockerYale. Virtek's financial advisor, Genuity Capital Markets, has provided
an opinion that the consideration offered to Virtek Shareholders by
StockerYale is inadequate from a financial point of view. The full text of
this opinion is included in the Directors' Circular.
Reasons for the Recommendation
The Board of Directors believes Virtek is well-positioned to deliver
substantial value to Shareholders in the future. It cited several reasons for
its recommendation that Virtek Shareholders reject the StockerYale offer:
- The StockerYale offer is inadequate from a financial point of view.
The consideration offered by StockerYale does not reflect the
underlying value of Virtek's assets and business and provides
inadequate value to the holders of Common Shares. On July 11, 2008,
Genuity Capital Markets provided an opinion to the Special Committee
and the Board of Directors (the "Opinion") to the effect that, as of
that date and subject to the assumptions, limitations, and
qualifications set out therein, the consideration offered to
Shareholders pursuant to the StockerYale Offer is inadequate, from a
financial point of view, to Shareholders other than StockerYale.
In addition, the StockerYale offer implies an enterprise value of
approximately $14.5 million, which is a multiple of only 2.1 times
based on the segmented EBITDA of $7.1 million (before loss of foreign
exchange) for the 2008 fiscal year for the Imaging and Templating
- The StockerYale offer is opportunistically timed to capitalize on
declines in stock markets generally and Virtek's common shares in
particular. The Board of Directors believe that the StockerYale offer
is opportunistically timed to take advantage of a recent period of
general decline in stock market values coupled with the fact that the
shares of Virtek have been trading at a ten (10) year low on marginal
volume and do not accurately reflect the long term potential of the
- The StockerYale offer does not reflect the value of Virtek's recent
initiatives. The Board of Directors believes the StockerYale offer
does not reflect the value of the Common Shares, as it fails to take
into account several strategic initiatives launched by Virtek's new
Chief Executive Officer, Stephen J. Sorocky. Shareholder interests
will be best served by continuing to aggressively implement this
strategic and operational turnaround.
- Superior proposals delivering greater value for Shareholders may
emerge. Virtek and its advisors are actively engaged in discussions
with a number of parties who have expressed an interest in considering
alternative transactions involving Virtek and/or its subsidiaries that
may offer greater value for Shareholders. The Board of Directors is
pursuing all such initiatives with the objective of maximizing value
to all Shareholders.
- The StockerYale offer is not a "permitted bid" under Virtek's
Shareholder Rights Plan. StockerYale could have structured its offer
as a "permitted bid" under Virtek's Shareholder Rights Plan, which is
designed to provide the Board of Directors and Shareholders with
sufficient time to properly consider any take-over bid made for Virtek
and to allow enough time for competing bids and alternative proposals
to emerge. However, StockerYale chose not to do so and is seeking to
limit the ability of the Board of Directors and its advisors to
consider and develop alternatives to the StockerYale offer so as to
maximize Shareholder value.
- The StockerYale offer is highly conditional and not a firm offer. The
undefined and subjective nature of many of the conditions effectively
give StockerYale the option not to proceed with the offer.
- All of Virtek's directors and officers have rejected the StockerYale
offer. None of the directors or officers of Virtek, each of whom is a
Shareholder, has accepted or intends to accept the StockerYale offer.
- The timing of the StockerYale offer is prejudicial. The StockerYale
Offer, which is open for thirty-five (35) days from June 27, 2008, was
made near national holidays in Canada and the United States and during
the summer holidays so as to hinder the process of quickly accessing
potential competing bidders on a timely basis. This limits the time
available for the Board of Directors and its advisors to consider and
develop alternatives to the StockerYale Offer so as to maximize
- A significant number of Virtek's largest Shareholders have indicated
to Virtek that they do not intend to accept the StockerYale offer.
Subsequent to the StockerYale offer, a significant number of Virtek's
largest Shareholders have indicated their intention to not tender
their shares to the StockerYale Offer.
A complete list of the reasons for the Board of Director's recommendation
as well as a full discussion of each one is provided in the Directors'
Circular. The Board of Directors encourages Shareholders to read the reasons
in their entirety.
"We believe StockerYale's offer is financially inadequate, opportunistic
and fails to recognize the full value of Virtek," said D. Brian Harrison,
Chairman of Virtek's Board of Directors. "For these and other reasons detailed
in the Directors' Circular, the Board of Directors unanimously recommends that
Virtek Shareholders reject the offer and not tender their shares to the
Availability of Directors' Circular
Shareholders are urged to read the Directors' Circular in its entirety.
The document will be available free of charge on SEDAR at www.sedar.com.
Copies of the Directors' Circular are being mailed to all Virtek Shareholders.
How to withdraw your shares from the StockerYale offer
Shareholders wishing to withdraw their shares from the StockerYale offer
are encouraged to contact Kingsdale Shareholder Services Inc., toll free at
About Virtek Vision International Inc.
Virtek Vision International Inc. is a leading provider of high value
industrial laser solutions focused on the needs of the global manufacturing
sector, providing templating, inspection, marking and engraving products.
Virtek serves customers in the prefabricated construction, transportation,
metalworking, tool and die and mold making industries worldwide. Virtek is a
full service provider, with services including manufacturing, development,
integration, training, after sales support and installation. The Company
delivers high value to its customers, including feature-rich systems with a
quick payback, productivity enhancements and total turnkey solutions. The
majority of Virtek's sales are in the United States and Europe. Virtek
maintains offices in Waterloo, Ontario, Canada; Boston, Massachusetts, United
States; Ludenscheid and Nurnberg, Germany; and Busto Arsizio, Italy. Please
visit www.virtek.ca for more information.
Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of the Company. These 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 the Company's 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
For further information:
For further information: about Virtek Vision International Inc. please
visit www.virtek.ca or contact: Peter Monsberger, VP Finance and CFO, Tel:
(519) 746-7190, Fax: (519) 746-3383, e-mail: email@example.com;
Stephen Sorocky, President and CEO, Tel. (519) 746-7190, Fax. (519) 746-3383,
e-mail: firstname.lastname@example.org; Investor Relations Contact: Jo Mira
Clodman, Clodman Hecht Communications Inc., (416) 787-3773, e-mail:
email@example.com; Kingsdale Shareholder Services Inc., 1-866-581-1571,