BURNABY, BC, Nov. 28, 2016 /CNW/ - IWG Technologies Inc.
("IWG" or the "Company") is pleased to announce that
IWG has entered into a definitive arrangement agreement (the
"Arrangement Agreement") with 1096777 B.C. Ltd., a private
British Columbia corporation (the
"Purchaser") and WM Capital Management, Inc. (the
"Guarantor"), as guarantor. The Purchaser and the Guarantor
are each directly or indirectly controlled by one or more of
New York based WM Capital
Management, Inc. and BASE Equity Partners, L.P. BASE Equity
Partners is a New York based
private investment firm that partners with management to support
growth in small to medium sized companies.
Under the Arrangement Agreement, the Purchaser has agreed to
acquire all of the issued and outstanding common shares of IWG
(each an "IWG Share") for consideration of $0.43 in cash per IWG Share. The cash
consideration reflects a 34% premium to the closing price of the
IWG Shares on the TSX Venture Exchange (the "TSX-V") of
$0.32 on November 24, 2016 and a 30% premium to the
average closing price of the IWG Shares on the TSX-V of
$0.33 for the 90 trading days ended
on November 24, 2016. The transaction
will be implemented by way of a plan of arrangement (the
"Arrangement") under the Business Corporations Act
(British Columbia).
Bruce Gowan, Chairman of IWG,
stated: "The success we have had is a testament to our partners,
employees and management team and their endeavors to deliver
superior shareholder value. We believe this transaction provides an
excellent opportunity for the shareholders of IWG to realize an
attractive premium to market."
Upon completion of the transaction, the Purchaser will cause IWG
to continue to operate its business in British Columbia and current management and
employees of IWG will remain with the Company.
TRANSACTION SUMMARY
Under the terms of the Arrangement Agreement, on closing, each
IWG shareholder will receive $0.43 in
cash for each IWG Share held. Pursuant to the transaction, the
Purchaser will pay a total of approximately $16.5 million for the IWG Shares (assuming no
exercise of existing IWG options). In addition, the holders
of all unexercised IWG stock options (including options which have
not vested) will receive, in respect of each IWG option held,
$0.43 in cash less the exercise price
of such IWG option.
The proposed transaction will be carried out by way of a
court-approved plan of arrangement and will require the approval of
at least 66 2/3% of the votes cast by the shareholders of IWG, and
approval by the "majority of the minority", being a majority of the
votes cast by IWG shareholders other than Darryl Jacobs, Executive Vice President of IWG
and a director of IWG's wholly owned subsidiary, International
Water-Guard Industries Inc., whose vote will not be included in
determining minority approval pursuant to Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions. The special meeting of shareholders of IWG is
expected to take place in January
2017.
In addition to shareholder and court approvals, the transaction
is subject to applicable regulatory approvals and the satisfaction
of certain other closing conditions customary in transactions of
this nature. IWG's obligations are also subject to the Purchaser's
financing continuing to be in place.
The Arrangement Agreement includes customary provisions,
including provisions relating to non-solicitation of alternative
transactions, a "fiduciary out" provision and the Purchaser's right
to match superior proposals. In addition, the Guarantor has agreed
to guarantee all of the Purchaser's obligations under the
Arrangement Agreement. IWG has agreed to pay a termination
fee to the Purchaser of $577,500 in
connection with termination of the Arrangement Agreement due to the
occurrence of certain events. Each of IWG and the Purchaser
has also agreed to pay to the other a $250,000 expense reimbursement fee upon
termination of the Arrangement Agreement due to the occurrence of
certain other events. If IWG is required to pay the expense
reimbursement fee, the amount will be deducted from any termination
fee which may become payable to the Purchaser.
The board of directors of IWG has unanimously determined that
the Arrangement Agreement and the Arrangement are fair to the
shareholders and optionholders of IWG and are in the best
interests of IWG. The board of directors of IWG has unanimously
approved the execution and delivery of the Arrangement Agreement
and the transactions contemplated by the Arrangement Agreement and
have unanimously resolved to recommend that IWG shareholders vote
in favour of the shareholders' resolution (the "Arrangement
Resolution") to approve the arrangement which will be included
in the information circular to be mailed to IWG shareholders in
connection with the Arrangement (the "Management Information
Circular").
Each of the directors and executive officers of IWG, together
with certain other shareholders of IWG who hold in the aggregate
approximately 22.8% of the issued and outstanding IWG Shares
(assuming no exercise of existing IWG stock options) have entered
into voting and support agreements with the Purchaser and the
Guarantor and have agreed to vote all of their IWG Shares in favour
of the Arrangement Resolution.
Working Capital Corporation has provided a fairness opinion to
the board of directors of IWG in connection with the
Arrangement. McCullough O'Connor Irwin LLP is acting as
legal counsel to IWG and McMillan LLP is acting as legal counsel to
the Purchaser.
Full details of the Arrangement Agreement will be included in a
Management Information Circular to be filed with applicable
regulatory authorities and mailed to IWG shareholders in accordance
with applicable securities laws. IWG expects to mail the Management
Information Circular in December
2016.
ABOUT IWG
IWG Technologies Inc. is the public holding company for
International Water-Guard Industries Inc., a Canadian aerospace
company focused on aircraft potable water treatment, water systems,
water heaters and components. IWG has expertise in all aspects of
water treatment, has the products and know-how to provide high
quality water for passengers and crew, and lightweight,
space-saving solutions for the aircraft operator.
On behalf of the Board of Directors
IWG Technologies Inc.
"Bruce W. Gowan"
Chair of the Board
The TSX Venture Exchange has neither approved nor disapproved
of the contents of this press release. 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 press
release.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This news release includes certain "Forward-Looking
Statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" under applicable Canadian securities laws. When used
in this news release, the words "anticipate", "believe",
"estimate", "expect", "target", "plan", "forecast", "may",
"schedule" and similar words or expressions, identify
forward-looking statements or information. These forward-looking
statements or information relate to, among other things:
anticipated benefits of the Arrangement to IWG shareholders; the
timing and receipt of required shareholder, court, stock exchange
and regulatory approvals for the Arrangement; the ability of IWG
and the Purchaser to satisfy the other conditions to, and to
complete, the Arrangement; the anticipated timing of the mailing of
the Management Information Circular regarding the Arrangement; the
anticipated timing of the special meeting of the Shareholders; the
closing of the Arrangement, and the continuation of IWG's business
and the retention of current management and employees.
These statements reflect the Company's current views with
respect to future events and are necessarily based upon a number of
assumptions and estimates that, while considered reasonable by the
Company, are inherently subject to significant uncertainties and
contingencies. Many factors, both known and unknown could cause
actual results, performance or achievements to be materially
different from the results, performance or achievements that are or
may be expressed or implied by such forward-looking statements or
information and the Company has made assumptions and estimates
based on or related to many of these factors. Such factors include,
without limitation: the Purchaser's decision regarding the
continuation of IWG's business and the retention of current
management and employees and satisfaction or waiver of all
applicable conditions to closing of the Arrangement including,
without limitation, receipt of all necessary shareholder, court and
regulatory approvals or consents and lack of material changes with
respect to IWG and its business, all as more particularly set forth
in the Arrangement Agreement. In respect of the forward-looking
statements and information concerning the anticipated completion of
the proposed Arrangement and the anticipated timing for completion
of the Arrangement, the Company has made certain assumptions that
management believes are reasonable at this time, including
assumptions as to the time required to prepare and mail shareholder
meeting materials. These dates may change for a number of reasons,
including unforeseen delays in preparing meeting material;
inability to secure necessary shareholder, court and regulatory
approvals in the time anticipated or the need for additional time
to satisfy the other conditions to the completion of the
Arrangement. Accordingly, readers should not place undue reliance
on the forward-looking statements and information contained in this
news release concerning these times. In addition, in the event the
Arrangement Agreement is terminated in certain circumstances, IWG
may be required to pay a termination fee to the Purchaser, the
result of which could have a material adverse effect on IWG's
financial position and results of operations and its ability to
fund growth prospects and current operations.
Readers are cautioned against attributing undue certainty to
forward-looking statements or information. Although IWG has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be anticipated, estimated or intended. The Company
does not intend, and does not assume any obligation, to update
these forward-looking statements or information to reflect changes
in assumptions or changes in circumstances or any other events
affecting such statements or information, other than as required by
applicable law.
SOURCE IWG Technologies Inc.