- Dealnet’s Board unanimously supports the Offer;
- The all-cash offer of
$0.16 per Common Share represents a significant premium; - The Offer is the result of a fulsome Board endorsed market canvas; and
- Shareholders should tender by 5:00 p.m (
Toronto Time ) onOctober 14, 2020 to take advantage of the significant Offer.
TORONTO,
The board of directors of Dealnet (the “Board”) unanimously recommends that Shareholders deposit their Common Shares under the Offer. All of Dealnet’s directors and executive officers have entered into lock-up agreements with the Offeror, pursuant to which they have agreed to, among other things, tender all of their Common Shares to the Offer.
Reasons to Accept the Offer
In making its recommendation, the Board reviewed and considered the Offer with the benefit of advice from its legal and financial advisors, including an opinion (the “Fairness Opinion”) from its financial advisor,
- Significant Premium for Shareholders. The Offer Price represents a premium of 33% to the closing price of the Common Shares on the
TSX Venture Exchange (the “TSX-V”) onAugust 21, 2020 (the last trading day prior to the announcement of the Offer), a premium of 52% to the 30-day volume weighted average price (“VWAP”) on the TSX-V for the period endingAugust 21, 2020 , and a premium of 93% to the 90-day VWAP on the TSX-V for the period endingAugust 21, 2020 . - Cash Provides Certainty of Value and Liquidity. The consideration under the Offer is all cash, which allows Shareholders to immediately realize value for all of their investment and provides certainty of value and immediate liquidity.
- No Financing Condition. The Offer is not subject to any financing condition. The Offeror intends to fund the cash consideration for the Common Shares through available cash resources and has secured, on a firm, committed basis, all of the financing required to fund the cash consideration payable for the Common Shares. Shareholders benefit from removal of financing, market, regulatory, and execution risks.
- Result of Extensive Strategic Review. The unanimous Board recommendation for the Offer is the result of a strategic review process carried out by Origin on behalf of the Company. The strategic review process was conducted from
May 2020 toAugust 2020 . Origin contacted 53 parties in connection with a potential acquisition transaction. Of the 53 parties contacted, 14 parties executed non-disclosure agreements and four bids were received in total. Of the four bids, three were en bloc bids and one was limited to the purchase of One Contact. The consideration under the Offer represents the highest offer price attained as a result of this extensive strategic review process. - Fairness Opinion. The Board has received an opinion from its financial advisor, Origin, to the effect that, as of the date of such opinion and based upon and subject to the assumptions, explanations and limitations and other matters described therein, the consideration payable under the Offer to Shareholders is fair, from a financial point of view, to Shareholders. The full text of the Fairness Opinion is attached as Appendix “B” to Dealnet’s directors’ circular. The Board recommends that Shareholders read the Fairness Opinion in its entirety.
- Compelling Value Relative to Alternatives. The Board believes, after a thorough review and after receiving legal and financial advice, that the immediate cash value offered to Shareholders under the Offer is more favourable to Shareholders than the potential value that might have resulted from other alternatives reasonably available to the Company, including remaining as a stand-alone entity and pursuing the Company’s existing strategy, in each case taking into consideration the potential rewards, risks, timelines and uncertainties associated with those other alternatives. The Board assessed each reasonably available alternative (including maintaining the status quo) throughout the strategic review process and ultimately concluded that the Offer was the most favourable alternative to unlock value today for Shareholders.
- Ability to Respond to Superior Proposals. The Board has reserved the ability to respond to unsolicited proposals that may deliver greater value to Shareholders than the Offer. The terms and conditions of the support agreement dated
August 22, 2020 , entered into betweenDealnet and Simply Green Home Services Inc. , and subsequently assigned to the Offeror (the “Support Agreement”) do not prevent an unsolicited third party from proposing or making a Superior Proposal (as such term is defined in the Support Agreement) or, provided Dealnet complies with the terms of the Support Agreement, preclude the Board from responding to, considering and acting on, a Superior Proposal. The Company is permitted to terminate the Support Agreement to accept, approve or recommend a Superior Proposal that is made and not matched by the Offeror provided that Dealnet pays the Offeror a termination amount of$2,250,000 . - Likelihood of Completion. The Offer has a high likelihood of completion given the limited number of conditions necessary to take up and pay for Common Shares and the limited range of termination rights under the Support Agreement. In particular, the Offer is not subject to a financing condition. In light of the foregoing, the Board believes that the Offer is likely to be completed in accordance with its terms and within a reasonable time.
- Arm’s Length Negotiations. Active, arm’s length negotiations between the Board and the Offeror resulted in the price of the Offer being increased multiple times during its negotiations with the Offeror and finally agreed upon at an amount considered to be fair, from a financial point of view, to Shareholders, based on the legal and financial advice received by the Board as confirmed in the Fairness Opinion, subject to the scope of review, assumptions and limitations and other matters described therein.
- Lock-Up Agreements. Based on the reasons underpinning the Board’s recommendation, each of Dealnet’s directors and executive officers has entered into lock-up agreements with the Offeror pursuant to which they have agreed to, inter alia, support the Offer and to deposit all of their Common Shares under the Offer.
The Offer will be open for acceptance until
Successful completion of the Offer is conditional upon, amongst other things, more than 66⅔% of the Shares outstanding being validly deposited under the Offer prior to the Expiry Time (the “Minimum Tender Condition”). The full details of the Offer are contained in the Offeror’s take-over bid circular and related Offer materials. Copies of the take-over bid circular and related Offer materials, as well as Dealnet’s directors’ circular, are available on Dealnet’s SEDAR profile at www.sedar.com.
Advisors
Dealnet has engaged
The Offeror has engaged
Information on Depositing Your Common Shares
The Offeror has retained
For additional information, Shareholders can contact the Depositary and Information Agent toll free in
About
Dealnet is the parent company of subsidiaries operating in two market segments, consumer finance and call centre. The Company operates in the consumer finance segment in
EcoHome is a specialty finance company serving the
One Contact offers customer support services to both EcoHome and third-party institutions across
For additional information please visit www.sedar.com.
About
With more than
Neither the
Forward-looking Statements
This news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “would”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks, including the effects of Covid-19, and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s most recent management’s discussion and analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
Contact Information
Chief Executive Officer |
(905) 695-8557 ext.1145 |
bhoulden@dealnetcapital.com |
Toll free: 1-866-851-3214 |
Local: 416-867-2272 |
contactus@kingsdaleadvisors.com. |
Source:
2020 GlobeNewswire, Inc., source