QUÉBEC CITY, Dec. 20,
2013 /CNW Telbec/ - Novik Inc. ("Novik") (TSXV: NVK)
is pleased to announce that, further to the announcement, on
November 18, 2013, of the signature
of a non-binding letter of intent with Clearview Capital LLC, Novik
has entered into a definitive arrangement agreement
(the "Arrangement Agreement") with Clearview Capital
Fund III, LP ("Clearview")
and a newly constituted entity, 9293-3985 Québec Inc.
(the "Purchaser"), pursuant to which the Purchaser will
acquire all of the issued and outstanding common shares (the
"Shares") of Novik (the "Transaction"), including the
Shares issuable upon the conversion of stock options of Novik, for
a cash consideration of $0.85 per
Share (the "Purchase Price"), representing an aggregate
purchase price of approximately $45,000,000, plus the assumption of certain debt
and debt-like items for an enterprise value of approximately
$47,000,000.
The Purchase Price represents a premium of
approximately 21.9% to the 30-day volume-weighted average trading
price of the Shares ("VWAP") for the period ending on
November 18, 2013 and a premium of
approximately 35.2% to the 90-day VWAP for the period ending on
November 18, 2013.
The Transaction has been unanimously approved by
the Board of Directors of Novik (the "Board") following the
unanimous recommendation of a special committee of independent
directors of Novik (the "Special Committee"). The Board
also unanimously recommends that shareholders vote in favour of the
Transaction at the special meeting of shareholders to be called to
approve the Transaction.
Michel Gaudreau,
the Chairman of the Board and President and Chief Executive Officer
of Novik and the holder, directly or indirectly, of 19,425,000
Shares and options to purchase 750,000 common shares of Novik, and
all officers and directors of Novik holding 463,000 Shares and
options to purchase 2,850,000 common shares of Novik, collectively
representing approximately 40.4% of the outstanding Shares (on a
non-diluted basis), have signed irrevocable lock-up agreements with
Clearview (the "Lock-Up
Agreements") pursuant to which they have undertaken, among
other matters, to vote in favour of the Transaction and against any
alternative acquisition proposal. The Lock-Up Agreements also grant
a proxy in favour of Clearview to
exercise the voting rights attached to the Shares held, directly or
indirectly, by Mr. Gaudreau and the officers and directors of
Novik. The Lock-Up Agreements automatically terminate on such date
that is the earlier of (i) the date upon which Novik and
Clearview have mutually agreed in
writing to terminate the Arrangement Agreement, (ii) the
termination of the Arrangement Agreement resulting from a breach by
Clearview and the Purchaser, (iv)
four (4) months following the termination of the Arrangement
Agreement for any other reason, and (v) the closing of the
Transaction.
Clearview Capital LLC and Clearview have also entered into voting
agreements with other holders of Shares representing approximately
15% of the outstanding Shares (on a non-diluted basis) who have
agreed to support and vote their Shares in favour of the
Transaction, subject to certain conditions.
Upon closing of the Transaction, each issued and
outstanding stock option of Novik shall be transferred to Novik in
exchange for a cash payment equal to the excess, if any, of the
Purchase Price over the applicable exercise price of such stock
option, after which the stock option plan of Novik shall be
cancelled.
PricewaterhouseCoopers LLP has provided an
opinion to the Special Committee and the Board that, subject to the
assumptions, qualifications and limitations provided therein, the
Purchase Price is fair, from a financial point of view, to the
shareholders of Novik.
The Transaction will be structured as a court
approved plan of arrangement pursuant to the Business
Corporations Act (Québec) and will be subject to the approval
of not less than 66 2/3% of the votes
cast by shareholders present in person or by proxy at the special
meeting of shareholders of Novik. Full details of the Transaction
will be included in the Novik management information circular which
is expected to be mailed to its shareholders in January 2014 in view of a special meeting of
shareholders expected to be held in February
2014. The Transaction is also subject to customary closing
conditions, and is expected to close in February 2014. The Transaction is not subject to
any financing condition.
The Arrangement Agreement provides for, among
other things, a non-solicitation covenant on the part of Novik
subject to customary fiduciary out provisions. The Arrangement
Agreement also provides Clearview
with a "right to match" and requires Novik to pay a termination fee
in the amount of $1.8 million to
Clearview under certain
circumstances, including in the event that the Board accepts any
unsolicited superior proposal. Clearview has agreed to pay Novik a
termination fee of $1.8 million under
certain circumstances, including if the Transaction is not
completed as a result of a breach of representations or covenants
by Clearview. In the event of any
unsolicited superior proposal, Novik will still be required to
convene a special meeting of shareholders to approve the
Transaction, subject to certain conditions.
PricewaterhouseCoopers Corporate Finance Inc. is
acting as financial advisor and McCarthy Tétrault LLP is acting as
legal advisor to Novik. Blake, Cassels & Graydon LLP is acting
as legal advisor to Clearview.
ABOUT NOVIK
Novik (NVK) is a leader in the design,
manufacture and distribution of innovative polymer exterior siding,
roofing coverings and accessories that replace traditional
materials such as stone, brick or wood shingles. These products
target the world-wide residential and commercial construction
industry.
ABOUT CLEARVIEW
Clearview Capital, LLC is a private investment
firm based in Old Greenwich, CT
that invests in and develops mid-sized, North American companies in
partnership with management. The firm has a long history of
assisting strong management teams in the execution of their growth
strategies. Clearview Capital LLC has formed Clearview, an institutionally‐backed private
equity fund focused primarily on the acquisition and development of
high-potential manufacturing and service businesses located in
the United States and Canada.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
This news release contains forward-looking
information, as such term is defined in applicable securities laws.
Forward-looking statements are typically identified by words such
as: believe, expect, anticipate, intend, estimate and similar
expressions, or are those which, by their nature, refer to future
events. Forward-looking information includes, without limitation,
the outcome of the proposed Transaction and other similar
information concerning anticipated future events, conditions or
results that are not historical facts. This press release
also contains forward-looking statements and information concerning
the anticipated timing and completion of the Transaction. Novik
provided these anticipated times in reliance on certain assumptions
that it believes are reasonable at this time, including assumptions
as to the time required to prepare meeting materials for mailing,
the timing of receipt of the necessary regulatory and court
approvals, and the satisfaction of and time necessary to satisfy
the conditions to the closing of the Transaction. These dates may
change for a number of reasons, including unforeseen delays in
preparing meeting materials, inability to secure necessary
regulatory or court approvals in the time assumed or the need for
additional time to satisfy the conditions to the completion of the
Transaction. In addition, the Transaction is subject to a number of
conditions which are typical for transactions of this nature.
Failure to satisfy any of these conditions may result in the
termination of the definitive Arrangement Agreement and the
Transaction may not be completed. Readers are cautioned that the
foregoing list of factors is not exhaustive. Novik cautions readers
that all forward-looking information is inherently uncertain and
that actual performance may be affected by a number of material
factors, many of which are beyond Novik's control. Accordingly,
actual future events, conditions and results may differ materially
from the estimates, beliefs, intentions and expectations expressed
or implied in the forward-looking information. All statements are
made as of the date of this news release and Novik assumes no
obligation to update or alter any forward-looking information
unless required by applicable laws.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Novik Inc.