ShawCor Special Committee Recommends Approval Of Proposed Restructuring
TORONTO, March 1, 2013
(TSX: SCL.A, SCL.B)
TORONTO, March 1, 2013 /PRNewswire/ - The Special Committee of the Board of
Directors of ShawCor Ltd. (the "Special Committee") is providing an update
today regarding the proposed elimination of ShawCor's dual class share
structure which will be the subject of a shareholder vote at a special meeting
scheduled for March 14, 2013 (the "Special Meeting"). Further information
relating to the Special Meeting can be found in the Company's Management Proxy
Circular dated February 11, 2013 (which can be viewed at www.sedar.com or on
the ShawCor website).
The Special Committee is asking all ShawCor shareholders to complete their
proxies and/or to attend at the Special Meeting, and to vote in favour of the
elimination of ShawCor's dual class share structure for the following reasons:
*The reorganization transaction is expected to be accretive to ShawCor from
an earnings per share perspective.
*The premium to the current trading price and resulting dilution to Class A
shareholders is within the range of precedents generally seen in similar
types of transactions.
*The Special Committee has received a fairness opinion from TD Securities
that the consideration to be paid to the Class B shareholders pursuant to
the transaction is fair, from a financial point of view, to the Class A
and Class B shareholders, other than the controlling shareholder.
*The elimination of the Class B shares, which do not otherwise have a
"sunset" provision, may facilitate future change of control transactions
following the completion of the transaction, as "control" will be
transferred to the general market.
*The transaction will result in a widely held single class share structure,
and is expected to diversify ShawCor's shareholder base, as many
investment mandates exclude investment in companies with dual class share
structures, and to increase liquidity and provide for enhanced financing
flexibility going forward.
*After completion of the transaction, all remaining shareholders will
receive a $1.00 per share special dividend.
*The proforma impact of the proposed transaction on ShawCor's financial
condition as at December 31, 2012, and assuming the transaction was
completed on that date, indicates a total debt to EBITDA ratio of 1.43 to
1, which is quite reasonable particularly given the outlook for solid
EBITDA growth and compared to our peers.
*To support the transaction we will issue investment grade senior notes at
an attractive 3.65% interest rate with an average term of over 10 years.
Our notes offering was oversubscribed, providing affirmation that our
capital structure, post transaction, is both appropriate and efficient.
*After the transaction, our cash balances combined with available credit
lines in excess of $165 million will enable us to execute on our growth
Mr. Jack Petch, Chair of the Special Committee remarked, "ShawCor has just
announced record quarterly and annual revenue, EBITDA and net income. We
fully expect that our record backlog of $850 million at year end, the high
level of bid activity and strong industry fundamentals will lead to continued
strong financial performance in 2013. ShawCor's future is bright and the
Special Committee strongly encourages all ShawCor Class A and Class B
shareholders to vote in favour of the Arrangement."
Regardless of the number of shares you own, it is important that you cast your
vote today. If you require assistance with your proxy or have any questions,
please contact Kingsdale Shareholder Services Inc. at 1-877-657-5859 or by
email at firstname.lastname@example.org
This document includes certain statements that reflect management's
expectations and objectives for the Company's future performance,
opportunities and growth, which statements constitute forward-looking
information under applicable securities laws. Such statements, other than
statements of historical fact, are predictive in nature or depend on future
events or conditions. Forward-looking information involves estimates,
assumptions, judgments and uncertainties. These statements may be identified
by the use of forward-looking terminology such as ″may″, ″will″, ″should″,
″anticipate″, ″expect″, ″believe″, ″predict″, ″estimate″, ″continue″,
″intend″, ″plan″ and variations of these words or other similar expressions.
Forward-looking information involves known and unknown risks and uncertainties
that could cause actual results to differ materially from those predicted by
the forward-looking information. We caution readers not to place undue
reliance on forward-looking information as a number of factors could cause
actual events, results and prospects to differ materially from those expressed
in or implied by the forward looking information. These statements of
forward-looking information are based on assumptions, estimates and analysis
made by management in light of its experience and perception of trends,
current conditions and expected developments as well as other factors believed
to be reasonable and relevant in the circumstances. These assumptions include
finalization of the Arrangement and the Company's ability to complete due
diligence and to finalize and execute definitive documentation with its
lenders and prospective note holders. The Company believes that the
expectations reflected in the forward-looking information are based on
reasonable assumptions in light of currently available information. However,
should one or more risks materialize or should any assumptions prove
incorrect, the Company can give no assurance that such expectations will be
When considering the forward looking information in making decisions with
respect to the Company, readers should carefully consider the foregoing
factors and other uncertainties and potential events. The Company does not
assume the obligation to revise or update forward looking information after
the date of this document or to revise it to reflect the occurrence of future
unanticipated events, except as may be required under applicable securities
SOURCE ShawCor Ltd.
Jack F. Petch
Chair of the ShawCor Special Committee
William P. Buckley
President & CEO
Gary S. Love
Vice President, Finance and CFO
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