Laval, Quebec,May 2, 2017 – Savaria Corporation (“Savaria” or the “Corporation”) (TSX: SIS) is pleased to announce that further to its press release on May 1, 2017, the Corporation has agreed with a syndicate of investment dealers led by National Bank Financial Inc. and GMP Securities L.P. and including Laurentian Bank Securities Inc., Cormark Securities Inc., PI Financial Corp. and TD Securities Inc. (collectively the “Underwriters”) to increase the size of its previously announced $27,800,000 “bought deal” offering on a private placement basis. Pursuant to the upsized deal terms, the Underwriters have agreed to purchase, on a “bought deal” private placement basis, 2,760,000 subscription receipts of the Corporation, at a price of $13.90 per subscription receipt (the “Offering Price”), for aggregate gross proceeds of $38,364,000 (the “Upsized Offering”). No option to purchase additional Subscription Receipts at the Offering Price has been granted to the Underwriters as per the terms of the Upsized Offering.
Marcel Bourassa, the Corporation’s Chairman, President and Chief Executive Officer, and Jean-Marie Bourassa, the Corporation’s Chief Financial Officer, have together increased their commitment to subscribe for Subscription Receipts, from 200,000 subscription receipts to 276,000 subscription receipts at the Offering Price, or 10% of the subscription receipts sold pursuant to the Upsized Offering.
The Corporation shall use the net proceeds of the Upsized Offering to partially finance the purchase price payable as per the terms of an agreement it has reached on May 1, 2017 (the “Acquisition Agreement”) with Span-America Medical Systems, Inc. (“Span-America”) (NASDAQ: SPAN) pursuant to which Savaria will acquire Span-America by way of an all-cash tender offer of US$29.00 per share, for a total transaction consideration of approximately US$80.2 million (or C$109.5 million) (the “Transaction”).
The subscription receipts are convertible on a one-for-one basis into common shares of Savaria (“Common Shares”) for no additional consideration and without any further action upon the successful completion of the tender offer. The gross proceeds of the Upsized Offering (less 50% of the underwriting fee and expenses) will be deposited in escrow with Computershare Trust Company of Canada to be released to the Corporation once the conditions to the Transaction have been satisfied. The holders of subscription receipts will also receive upon conversion of the subscription receipts for Common Shares, in the form of a special interest payment, an amount equal to any dividends declared by Savaria and payable to holders of Common Shares of record as of dates from and including the closing date of the Upsized Offering to but excluding the date of the conversion of subscription receipts into Common Shares.
Should the conditions to the Transaction not have been satisfied by September 1, 2017 or the Acquisition Agreement be otherwise terminated, the gross proceeds of the Upsized Offering will be returned to holders of subscription receipts with interest.
The Upsized Offering is scheduled to close on or about May 18, 2017, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX.
The subscription receipts will be sold in Canada on a private placement basis to "accredited investors" under National Instrument 45-106 and pursuant to certain other available and agreed upon prospectus exemptions. The subscription receipts to be offered pursuant to the Upsized Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Savaria Corporation (savaria.com) is one of North America’s leaders in the accessibility industry. It provides accessibility solutions for the elderly and physically challenged to increase their mobility and independence. The diversity of its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts, as well as elevators for home and commercial use. In addition, it converts and adapts vehicles to be wheelchair accessible. It also operates a network of franchisees and corporate stores through which new and recycled accessibility equipment is sold and, in certain locations, vehicle conversions are performed. Savaria operates a plant located in Huizhou (China) which increases its competitive edge. Savaria records close to 60% of its revenue outside Canada, primarily in the United States. It operates a sales network of some 400 retailers and affiliates in North America and employs some 500 people. Its principal places of business are located in Laval (Quebec), Brampton (Ontario) and Huizhou (China).
Forward Looking Statements
This press release contains statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "may", "will", "should", "could" or similar words suggesting future outcomes or language suggesting an outlook.
Forward-looking information contained in this press release is based on the current beliefs of the Corporation as well as assumptions made by, and information currently available to, the Corporation. Although the Corporation considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect.
By its very nature, the forward-looking information included in this press release involves inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking information will not be achieved. Readers are cautioned not to place undue reliance on this forward-looking information as a number of important factors could cause the actual results to differ materially from those expressed in such forward-looking information. These factors include, but are not limited to, those risks associated with obtaining the securityholder approvals necessary to allow for the completion of the Transaction in accordance with its terms. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. For information identifying further known risks and uncertainties and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking information, please refer to the heading “Risks and Uncertainties” in Savaria’s most recent Management's Discussion and Analysis which can be found at www.sedar.com. When relying on forward-looking information to make decisions with respect to Savaria, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking information contained in this press release is made as of the date of this press release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.
Important Additional Information
This document is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities. The solicitation and offer to buy the common stock of Span-America will only be made pursuant to an offer to purchase and related materials that the Corporation intends to file with the Securities and Exchange Commission. Span-America stockholders should read these materials carefully when they become available because they will contain important information, including the terms and conditions of the offer. Span-America stockholders will be able to obtain the offer to purchase and related materials with respect to the tender offer free of charge at the SEC’s website at www.sec.gov or from the information agent named in the tender offer materials.
For further information:
Hélène Bernier, CPA, CA