The Arrangement is valued at approximately
Collectively,
Summary of the Arrangement
Under the terms of the Arrangement Agreement, each holder of Strad Shares (the 'Public Shareholders'), other than Ongoing Shareholders, will receive CDN
In conjunction with the completion of the Arrangement, subject to the approval of the
The Board of Directors of Strad (the 'Strad Board') formed a special committee of independent directors (the 'Special Committee') to, among other things, review and evaluate the terms of the proposal from AcquireCo, to obtain and supervise the preparation of a formal valuation of the fair market value of the Strad Shares, to obtain and supervise the preparation of a fairness opinion, to make a recommendation to the Strad Board in respect of the proposal and to negotiate the terms and conditions of the Arrangement Agreement and related matters.
The Arrangement was unanimously recommended by the Special Committee to the Strad Board. The voting members of the Strad Board (with interested directors and Ongoing Shareholders, Messrs. Pernal and Wood, abstaining), after receiving the unanimous recommendation of the Special Committee, have unanimously determined that the consideration to be received by the Public Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Public Shareholders and that the Arrangement is in the best interests of Strad and have unanimously approved the Arrangement and the Arrangement Agreement and have resolved to recommend that holders of Strad Shares vote in favour of the Arrangement.
All of the members of the Strad Board, Strad's executive officers and certain principal holders of Strad Shares, who collectively own directly or indirectly or exercise control or direction over approximately 21.6% of the outstanding Strad Shares, have entered into support agreements with AcquireCo and Strad pursuant to which they have agreed to vote their Strad Shares in favour of the Arrangement, subject to the provisions thereof.
The Arrangement is subject to customary TSX, court and regulatory approvals, and the following approvals at the Strad Meeting (as defined below): (a) the approval of not less than 662/3% of the votes cast by holders of Strad Shares; (b) in the event that all of the holders of Strad Options (other than Ongoing Incentiveholders) do not enter into Option Assignment Agreements, 662/3% of the votes cast by holders of Strad Shares and Strad Options, voting together as a single class and (c) 'majority of the minority' approval under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101'). For the purposes of the 'majority of the minority' approval requirement under MI 61-101, the votes cast by Ongoing Shareholders and their affiliates will be excluded.
A special meeting of the applicable Strad securityholders to consider the Arrangement is expected to be held in
Under the Arrangement Agreement, Strad has agreed that it will not solicit or initiate any discussions regarding any other acquisition proposals, subject to the fiduciary duty of the Strad Board in the event an unsolicited superior proposal is received by Strad. AcquireCo has been granted a five (5) business day right to match any competing superior proposal for Strad (as defined in the Arrangement Agreement) in the event such a proposal is made. Strad has also agreed to pay a termination fee of
Following completion of the Arrangement, it is expected that the Strad Shares will be de-listed from the TSX and Strad will cease to be a reporting issuer in
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About Strad
Strad specializes in industrial matting and equipment rentals for projects of any size, from a network of branches across
Strad is headquartered in
Forward-Looking Statements
This press release may contain forward-looking statements including anticipated completion of the Arrangement and timing of various matters relating to the completion of the transactions contemplated by the Arrangement Agreement. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual events to differ from those anticipated. These risks include, but are not limited to: risks inherent in the nature of the proposed Arrangement, including failure to realize the anticipated benefits thereof; incorrect assessment of the value of Strad and the Strad Shares; that AcquireCo will be unable to obtain the financing required for the Arrangement; that holders of Strad Shares will not support the Arrangement; the failure to obtain the required shareholder, court and other third party approvals as may be required in connection therewith and that any of the other conditions precedent to completion of the Arrangement will not be satisfied or waived (where permitted). In addition, if the Arrangement is not completed, and Strad continues as a publicly-traded entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources of Strad to the completion of the Arrangement could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have an adverse effect on its current and future operations, financial condition and prospects. Furthermore, the failure of Strad to comply with the terms of the Arrangement Agreement may, in certain circumstances, result in it being required to pay a fee to AcquireCo, the result of which could have an adverse effect on its financial position and results of operations and its ability to fund growth prospects and current operations. The press release also contains forward-looking information concerning the anticipated completion of the Arrangement and the anticipated timing thereof. Strad has provided these anticipated times in reliance on certain assumptions that it believes are reasonable, including assumptions as to the time required to prepare meeting materials, the timing of receipt of necessary regulatory, shareholder and court approvals and the satisfaction of and time necessary to satisfy the conditions to closing of the Arrangement (including timing of the Strad Meeting and de-listing of the Strad Shares). These dates may change for a number of reasons, including unforeseen delays in preparing materials, inability to secure necessary regulatory or court approvals in the time assumed or the need for additional time to satisfy the conditions to completion of the Arrangement. In addition, there are no assurances the Arrangement will be completed on the terms anticipated, or at all. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. The forward-looking statements contained in this news release are made as of the date of this news release and Strad does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
This release does not constitute an offer to purchase or a solicitation of an offer to sell securities. Shareholders are advised to review any documents that may be filed with securities regulatory authorities and any subsequent announcements because they will contain important information regarding the Arrangement and the terms and conditions thereof.
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