- Offer of
$18.50 in cash plus one contingent value right of$0.61 per share - Board has unanimously agreed to support and recommends that minority shareholders approve the transaction
The cash portion of the consideration payable under the Arrangement Agreement and the combined cash and CVR consideration (assuming the full payment of the CVR) represent premiums of approximately 52.6% and 57.7%, respectively, to the closing price of
Today's announcement is the culmination of the negotiations that took place following the announcement of PCP's initial proposal on
"The Transaction Committee is pleased to be able to provide minority shareholders with this offer," said
"We are pleased that the Transaction Committee has unanimously agreed to support this enhanced offer, which provides a fair and attractive return to Neighbourly's public shareholders," said
The transaction will be funded through a combination of debt and equity. PCP has received debt commitments for a fully underwritten credit facility in an amount of up to
"We are pleased to partner with PCP and Neighbourly and look forward to supporting the Company's next phase of growth as it continues to deliver critical healthcare services to Canadian communities," commented
Pursuant to the Arrangement Agreement, the Purchaser would acquire all of the Common Shares in the capital of Neighbourly, other than those Common Shares already owned by PCP or its affiliates, for
Each CVR is a direct obligation of the Purchaser. The CVRs will not be listed on any market or exchange, and may not be sold, assigned, transferred, pledged or encumbered in any manner, other than in the limited circumstances set out in the Arrangement Agreement. The CVRs will not represent any equity or ownership interest in the Company, Purchaser or any affiliate thereof (or any other person) and will not be represented by any certificates or other instruments. The CVRs will not have any voting or dividend rights, and no interest will accrue on any amounts payable on the CVRs to any holder thereof.
The Arrangement Agreement contains customary non-solicitation provisions prohibiting Neighbourly from soliciting competing acquisition proposals, as well as "right to match" provisions in favor of the Purchaser. The Arrangement Agreement provides for a
The Arrangement Agreement also prohibits Neighbourly to pay any dividends (including the historical quarterly dividend of
The transaction will be completed pursuant to a court-approved plan of arrangement under section 192 of the Canada Business Corporations Act and is subject to satisfaction of customary closing conditions, including (without limitation) court approval and the approval of the shareholders of Neighbourly as further set out below. After completion of the transaction, the Company expects to no longer be subject to the reporting requirements of applicable Canadian securities legislation, and its Common Shares will be delisted from the TSX.
Completion of the transaction will be subject to various closing conditions, including the approval of at least (i) two-thirds (66 2/3%) of the votes cast by shareholders present in person or represented by proxy at the special meeting of the shareholders scheduled to be called to approve the transaction (the "Special Meeting"), voting as a single class (each holder of Common Shares being entitled to one vote per Common Shares) and (ii) the approval of the majority of the holders of Common Shares present in person or represented by proxy at the Special Meeting, excluding the votes of PCP and its affiliates, and any other shareholders whose votes are required to be excluded for the purposes of "minority approval" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") in the context of a "business combination" (the "Minority Shareholders"). Further details regarding the applicable voting requirements will be contained in a management information circular to be filed and mailed to Neighbourly shareholders in connection with the Special Meeting to approve the transaction.
The transaction is expected to close by
Copies of the definitive Arrangement Agreement and of the management information circular for the Special Meeting will be filed with Canadian securities regulators and will be available on the SEDAR+ profile of Neighbourly at www.sedarplus.com. Neighbourly's shareholders are urged to read those and other relevant materials when they become available.
The Transaction Committee has unanimously recommended that the Board approve the Arrangement Agreement and unanimously recommends that the Minority Shareholders vote in favour of the special resolution to approve the transaction (the "Arrangement Resolution") at the Special Meeting. The Board, after receiving the unanimous recommendation of the Transaction Committee, has unanimously (with
PCP, together with its affiliates, currently beneficially owns or has control or direction over, directly or indirectly, 22,454,629 Common Shares, representing approximately 50.05% of the currently issued and outstanding Common Shares. Following completion of the transaction, PCP will own or have control or direction over, directly or indirectly, 100% of the Common Shares in the capital of Neighbourly.
PCP has its principal office located in
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This news release makes reference to "Pro-Forma Adjusted EBITDA", which means the Corporation's consolidated net income (determined in accordance with the International Financial Reporting Standards) as adjusted in accordance with the adjustments provided in Schedule F of the Arrangement Agreement. In order to determine "Pro-Forma Adjusted EBITDA", the EBITDA of any business that has been subject of an acquisition during a fiscal year shall be included in the EBITDA of the Corporation for such fiscal year on a pro forma normalized basis for the previous thirteen (13) fiscal periods ended on the last day of such fiscal year, as if such acquisition occurred on the first day of the fiscal year for which the EBITDA of the Corporation is calculated. Refer to the definition of "EBITDA" provided in the definitive Arrangement Agreement which will be available on the SEDAR+ profile of Neighbourly at www.sedarplus.com.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "estimates", "outlook", "forecasts", "projection", "prospects", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking information in this news release include, among other things, statements relating to Neighbourly's business in general; statements relating to the transaction, the ability to complete the transactions contemplated by the Arrangement Agreement and the timing thereof, including the parties' ability to satisfy the conditions to the consummation of the transaction, the receipt of the required shareholder approval and court approval and other customary closing conditions, the possibility of any termination of the Arrangement Agreement in accordance with its terms, the achievement of EBITDA Target and the payout of additional amounts to holders of CVRs under the Arrangement Agreement, and the expected benefits to the Company and its shareholders of the proposed transaction; and statements relating to PCP's financing, PCP's ability to finalize the terms and conditions and enter into definitive agreements with the counterparties involved, and the ability of PCP to satisfy the closing conditions thereunder and timing thereof.
Risks and uncertainties related to the transactions contemplated by the Arrangement Agreement include, but are not limited to: the possibility that the transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required regulatory, shareholder and Court approvals and other conditions to the closing of the transaction or for other reasons; the risk that competing offers or acquisition proposals will be made; the negative impact that the failure to complete the transaction for any reason could have on the price of the Common Shares or on the business of the Company; the failure of PCP to enter into definitive agreements with respect to the debt commitment or the equity commitment, or PCP's failure to satisfy the closing conditions thereunder in a timely manner or at all; the Purchaser's failure to pay the cash consideration at closing of the transaction; the ability of the Purchaser to pay any expense fee under the Arrangement Agreement, should such fee become payable, as its obligations are not guaranteed; the absence of a reverse break fee in favour of the Company; the business of Neighbourly may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk of regulatory changes that may materially impact the business or the operations of Neighbourly; the risk that legal proceedings may be instituted against Neighbourly; and risks related to the diversion of management's attention from Neighbourly's ongoing business operations while the transaction is pending; and other risks and uncertainties affecting Neighbourly, including those described in in the Company's annual information form for the year ended
Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company's expectations as of the date of this news release (or as the date they are otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in
This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell, or an offer to sell or a solicitation of an offer to buy, Neighbourly Common Shares.
Neighbourly is
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