TORONTO,
July 23, 2015 /CNW/ - Celestica Inc.
(NYSE, TSX: CLS) Celestica, a global leader in the delivery of
end-to-end product lifecycle solutions, is pleased to announce that
it has entered into an agreement for the sale of its property
located in Toronto, Ontario, which
includes the site of Celestica's corporate headquarters and its
Toronto manufacturing operations.
The site is being sold to a special purpose entity (the
"Property Purchaser") to be formed by a consortium of three real
estate developers, namely Diamond Corp., Lifetime Developments
and Context Development Inc. ("Context"). The consortium
intends to work with the City of
Toronto to develop a mixed-use community including office,
retail and residential uses. If the transaction is completed,
the purchase price will be approximately CDN$137 million, exclusive of applicable taxes
and subject to adjustment in accordance with the terms of the
agreement of purchase and sale (the "Property Sale Agreement"),
including for certain density bonuses and other adjustments in
accordance with usual commercial practice.
Pursuant to the terms of the Property Sale
Agreement, the Property Purchaser will pay Celestica a cash deposit
of CDN$15 million, which is
non-refundable except in limited circumstances. Upon closing, which
is subject to various conditions including municipal approvals and
is anticipated to occur within approximately two years, the
Property Purchaser will pay Celestica an additional CDN$53.5 million in cash. The balance of the
purchase price is to be satisfied on closing by an interest-free,
first-ranking mortgage in the amount of CDN$68.5 million to be registered on title to the
property and having a term of two years from the closing date.
As part of the Property Sale Agreement, Celestica
will enter into an interim lease for its existing head office and
manufacturing premises on a portion of the real estate for an
initial two-year term on a rent-free basis (subject to certain
payments including taxes and utilities), which will be followed by
a longer-term lease for the new home of Celestica's corporate
headquarters on terms it would settle with the Property Purchaser.
There can be no assurance that this transaction will be
completed within two years or at all.
Approximately 30% of the interests in the
Property Purchaser will be held by Context, a privately-held
company in which Mr. Gerald
Schwartz, a controlling shareholder and director of
Celestica, has a material interest. Mr. Schwartz also has a
non-voting interest in Diamond Corp.'s Whitecastle New Urban Fund
3, which will have an approximate 25% interest in the Property
Purchaser.
Given the interest in the transaction by a
related party, Celestica's board of directors (the "Board") formed
a Special Committee, consisting solely of independent directors,
which retained its own independent legal counsel, to review and
supervise a competitive bidding process. The Special Committee,
after considering, among other factors, that the purchase price for
the property exceeded the valuation provided by an independent
appraiser, determined that the Property Purchaser's transaction
terms are in the best interests of Celestica. The Board, at a
meeting where Mr. Schwartz was not present, approved the
transaction based on the unanimous recommendation of the Special
Committee.
About Celestica
Celestica is dedicated to delivering end-to-end
product lifecycle solutions to drive our customers' success.
Through our simplified global operations network and information
technology platform, we are solid partners who deliver informed,
flexible solutions that enable our customers to succeed in the
markets they serve. Committed to providing a truly differentiated
customer experience, our agile and adaptive employees share a proud
history of demonstrated expertise and creativity that provides our
customers with the ability to overcome complex challenges.
For further information on Celestica, visit its website at
http://www.celestica.com.
The company's security filings can also be accessed at
http://www.sedar.com and http://www.sec.gov.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this press release
which are not historical facts are forward-looking statements. Such
forward-looking statements are predictive in nature and may be
based on current expectations, forecasts or assumptions involving
risks and uncertainties that could cause actual outcomes to differ
materially from the forward-looking statements themselves. Such
forward-looking statements include, but are not limited
to, statements regarding: the formation of the Property
Purchaser by a consortium of real estate developers and the
composition thereof; the Property Purchaser's development plans for
the property; the expected purchase price; the anticipated timing
of closing; interim and long-term lease arrangements with the
Property Purchaser; the expected interests of the
constituent entities in the Property Purchaser; and other
statements which may, without limitation, be preceded by, followed
by, or include words such as "believes", "expects", "anticipates",
"estimates", "intends", "plans", or similar expressions, or may
employ such future or conditional verbs as "may", "might", "will",
"could", "should", or "would", or may otherwise be indicated as
forward-looking statements by grammatical construction, phrasing or
context. For those statements, we claim the protection of the safe
harbour for forward-looking statements contained in the U.S.
Private Securities Litigation Reform Act of 1995, and in applicable
Canadian securities laws. Forward-looking statements are not
guarantees of future actions, events or outcomes. You should
understand that forward-looking statements contained herein are
subject to various risks, including the risk that one or
more conditions to closing the transactions described herein may
not be satisfied on a timely basis or at all. You should also
understand that the risks, uncertainties and factors which are
identified in our various public filings
at www.sedar.com and www.sec.gov could
affect our future actions, events and outcomes and could cause them
to differ materially from those expressed in such forward-looking
statements. Forward-looking statements are provided for the purpose
of providing information about management's current expectations
and plans relating to the future. Readers are cautioned that such
information may not be appropriate for other purposes. Except as
specifically required by applicable law, we disclaim any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. Certain information in this press release,
including information pertaining to interests in the Property
Purchaser and the Property Purchaser's intentions, has been
provided by third parties.
SOURCE Celestica Inc.