Pacific Safety Products Inc. Announces Offer to Purchase the Company
8:02 AM ET, May 13, 2010
KANATA, ONTARIO, May 13, 2010 (MARKETWIRE via COMTEX) -- Pacific Safety Products Inc. ("PSP") (PSP) today announced that it has received an offer from Revision Eyewear Inc. ("Revision") to purchase all the issued and outstanding shares of PSP at a price of Cdn $0.18 per share in an all-cash transaction.
Revision is a private company with corporate headquarters in Montreal and operational headquarters in Essex Junction, Vermont, USA which develops and delivers purpose-built eye protection solutions for military and tactical clients worldwide.
The purchase price represents a premium of 50% over the weighted average trading price of PSP's common shares on the TSX-V for the 30 trading days prior to March 4, 2010, the date on which the Company announced that it was in discussions with a possible purchaser and a 13 % premium over the weighted average trading price of the Company's shares for the nine month period prior to that announcement. The purchase price represents an aggregate transaction value of approximately $4.6 million, and is subject to downward adjustment in the event that PSP's transaction costs exceed $225,000.
The transaction, which is structured as a plan of arrangement, was unanimously approved by PSP's Board of Directors on May 12, 2010, following receipt of the recommendation of a special committee of the Board and a fairness opinion from Grant Thornton LLP concluding that the consideration under the transaction is fair, from a financial point of view, to shareholders of PSP. The directors and senior officers of PSP (who collectively hold approximately 2 per cent of the outstanding common shares of PSP) have agreed to vote their shares in favour of the transaction.
The transaction is subject to court approval and to the approval of at least two-thirds of the votes cast by PSP shareholders present in person or by proxy approval of shareholders of PSP at a meeting called for June 17, 2010. The transaction, which is also subject to all requisite approvals, third party consents and other conditions precedent, is expected to close on or around June 23, 2010. Following completion of the transaction, the common shares of PSP will be delisted from the TSX-V and no longer traded publicly.
Pursuant to the arrangement agreement, PSP has agreed not to solicit competing transactions, but is not prohibited from responding to unsolicited enquiries or competing offers which the directors of PSP reasonably believe are likely to result in a superior proposal. In the event that PSP terminates the arrangement agreement to endorse a superior proposal, PSP is required to pay a break fee to Revision of $350,000 and to reimburse Revision's transaction costs to a maximum of $150,000.
Details regarding these and other terms of the transaction are set out in the arrangement agreement and in a proxy circular that PSP will mail to holders of common shares in connection with the special meeting of shareholders to be held to approve the transaction. It is expected that these materials will be mailed out at the beginning of June, 2010. The arrangement agreement and the proxy circular will be available at www.sedar.com.
