China Advanced Construction Materials Group, Inc. ("China ACM" or
the "Company") (NASDAQ: CADC), a leading provider of ready-mix
concrete and related technical services in China, today announced
that it has entered into a definitive agreement and plan of merger
with Novel Gain Holdings Limited, a British Virgin Islands company
("Novel Gain"), CACMG Acquisition, Inc., a Delaware corporation and
a wholly owned, direct subsidiary of Novel Gain ("Merger Sub"), Mr.
Xianfu Han and Mr. Weili He, pursuant to which Merger Sub will
merge with and into the Company with the Company continuing as the
surviving corporation and a wholly owned subsidiary of Novel Gain.
Mr. Han is the Company's Chief Executive Officer and the Chairman
of the Company's Board of Directors and beneficially owns
approximately 32.5% of the Company's outstanding shares of common
stock, $0.001 par value per share (the "Company Common Stock"). Mr.
He is the Company's Chief Operating Officer and Vice-Chairman of
the Company's Board of Directors and beneficially owns
approximately 17.0% of the outstanding Company Common Stock.
Under the terms of the merger agreement, each share of the
Company Common Stock issued and outstanding immediately prior to
the effective time of the merger will be converted into the right
to receive $2.65 in cash without interest, except for (i) shares in
respect of which appraisal rights have been properly exercised
under Delaware law, and (ii) shares owned by Novel Gain and Merger
Sub (including shares to be contributed to Novel Gain by Messrs.
Han and He (the "Rollover Investors") pursuant to a rollover
agreement between Novel Gain and the Rollover Investors (the
"Rollover Agreement") immediately prior to the effective time of
the merger), which shares will be cancelled without the Rollover
Investors receiving any consideration. The offer represents a 43.2%
premium over the closing price as quoted by Bloomberg L.P. on
October 21, 2011 and a 37.7% premium over the 90-day volume
weighted average price as quoted by Bloomberg L.P. as of the same
date, on October 21, 2011.
The Company's Board of Directors, acting upon the unanimous
recommendation of the Special Committee formed by the Board of
Directors, approved the merger agreement and resolved to recommend
that the Company's stockholders vote to adopt the merger agreement.
The Special Committee, which is composed solely of independent
directors unrelated to Novel Gain, Merger Sub or any of the
management members of the Company, negotiated the terms of the
merger agreement.
The merger contemplated by the merger agreement is subject to
customary closing conditions, including, but not limited to, (i)
adoption of the merger agreement by the Company's stockholders,
(ii) the absence of any order or injunction prohibiting the
consummation of the merger and (iii) the truth and correctness of
each party's representations and warranties at closing. The merger
agreement may be terminated under certain circumstances, including,
among others, (i) termination by mutual agreement of the parties,
(ii) termination by either party if the merger is not consummated
on or before June 30, 2012, (iii) termination by the Company if the
Company enters into an agreement with respect to a Superior
Proposal (as defined in the merger agreement) or an agreement or
transaction relating to an Alternative Transaction Proposal (as
defined in the merger agreement), (iv) termination by the Company
after certain breaches by Novel Gain or Merger Sub and (v)
termination by the Company prior to Novel Gain's execution of a
Facility Agreement (as defined in the merger agreement). The
Company will call a meeting of its stockholders for the purpose of
voting on the adoption of the merger agreement as soon as
practicable. If completed, the merger would, under the laws of the
State of Delaware, result in the Company becoming a privately held
company and the Company Common Stock would no longer be listed on
the NASDAQ Global Market.
Pillsbury Winthrop Shaw Pittman LLP is serving as U.S. legal
advisor to the Company. Skadden, Arps, Slate, Meagher & Flom
LLP is serving as U.S. legal advisor to the Special Committee.
Squire, Sanders & Dempsey LLP is serving as U.S. legal advisor
to Messrs. Han and He. William Blair & Company is serving as
financial advisor to the Special Committee.
Additional Information about the
Transaction
The Company will furnish to the Securities and Exchange
Commission (the "SEC") a current report on Form 8-K regarding the
transaction, which will include the merger agreement and related
documents. All parties desiring details regarding the transaction
are urged to review these documents, which are available at the
SEC's website (http://www.sec.gov).
In connection with the proposed merger, the Company will prepare
and mail a proxy statement to its stockholders. In addition,
certain participants in the proposed transaction will prepare and
mail to the Company's stockholders a Schedule 13E-3 transaction
statement. These documents will be filed with, or furnished to, the
SEC. INVESTORS AND STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN
THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR
FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT NOVEL GAIN, THE COMPANY, THE
PROPOSED MERGER, THE PERSONS SOLICITING PROXIES IN CONNECTION WITH
THE PROPOSED MERGER ON BEHALF OF THE COMPANY AND THE INTERESTS OF
THOSE PERSONS IN THE PROPOSED MERGER AND RELATED MATTERS. In
addition to receiving the proxy statement and Schedule 13E-3
transaction statement by mail, stockholders also will be able to
obtain these documents, as well as other filings containing
information about the Company, the proposed merger and related
matters from the SEC's website (http://www.sec.gov) or at the SEC's
public reference room at 100 F Street, NE, Room 1580, Washington,
D.C. 20549. In addition, these documents can be obtained, without
charge, by contacting the Company at China Advanced Construction
Materials Group, Inc., 9 North West Fourth Ring Road, Yingu Mansion
Suite 1708, Haidian District, Beijing, People's Republic of China,
100190, telephone: +86 10 82525361.
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be "participants" in the solicitation of proxies from the
Company's stockholders with respect to the proposed merger.
Information regarding the persons who may be considered
"participants" in the solicitation of proxies will be set forth in
the proxy statement and Schedule 13E-3 transaction statement
relating to the proposed merger when it is filed with the SEC.
Additional information regarding the interests of such potential
participants will be included in the proxy statement and Schedule
13E-3 transaction statement and the other relevant documents filed
with the SEC when they become available.
This announcement is neither a solicitation of a proxy, an offer
to purchase nor a solicitation of an offer to sell any securities
and it is not a substitute for any proxy statement or other filings
that may be made with the SEC should the proposed merger go
forward.
About China ACM
China ACM is a leading producer of advanced, certified
eco-friendly ready-mix concrete (RMC) and related technical
services for large scale, high-speed rail (HSR) and other complex
infrastructure projects. Leveraging its proprietary technology and
value-add engineering services model, the Company has won work on
numerous high profile projects including the 30,000 km China HSR
expansion, the Olympic Stadium Bird's Nest, Beijing South Railway
Station, Beijing International Airport, National Centre for
Performing Arts, CCTV Headquarters, Beijing Yintai Building and
U.S. and French embassies.
Founded in 2002, Beijing-based China ACM provides its materials
and services through its network of fixed ready-mix concrete plants
covering the Beijing metropolitan area. It also has technical
consulting services and preferred procurement agreements with other
independently owned plants across China. Additionally, the Company
owns numerous portable plants deployed in various provinces across
China primarily in major high speed rail projects. More information
about the Company is available at www.china-acm.com.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Such statements include, among others, those concerning
expected benefits and costs of the proposed merger; management
plans relating to the merger; the expected timing of the completion
of the merger; the parties' ability to complete the merger
considering the various closing conditions, including any
conditions related to regulatory approvals, as well as all
assumptions, expectations, predictions, intentions or beliefs about
future events. Forward-looking statements can be identified by the
use of forward-looking terminology such as "will," "believes,"
"expects" or similar expressions. Such information is based upon
expectations of our management that were reasonable when made but
may prove to be incorrect. All of such assumptions are inherently
subject to uncertainties and contingencies beyond our control and
based upon premises with respect to future business decisions,
which are subject to change. We do not undertake to update the
forward-looking statements contained in this press release. For a
description of the risks and uncertainties that may cause actual
results to differ from the forward-looking statements contained in
this press release, see our most recent Annual Report on Form 10-K
filed with the SEC, and our subsequent SEC filings. Copies of
filings made with the SEC are available through the SEC's
electronic data gathering analysis retrieval system at
http://www.sec.gov.
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Contact: Financial Profiles Tricia Ross (916) 939-7285
tross@finprofiles.com Financial Profiles Moira Conlon Tel: (310)
478-2700 x11 mconlon@finprofiles.com
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