Transaction|June 25, 2013
Kelso & Company acquires 98.24% of the issued and outstanding common shares of EACOM Timber Corporation
Torys acted as counsel to Fairfax Financial with a team that included David Chaikof, Philip Mohtadi and Stephen Abrahamson.
On March 22, 2013, Kelso & Company and EACOM Timber Corporation (EACOM) jointly announced that Kelso & Company, through a wholly owned subsidiary (Kelso) agreed, subject to certain conditions, to make a take-over bid to acquire all of the common shares of EACOM for C$0.38 in cash per common share. EACOM and Kelso entered into a support agreement in connection with the offer, which provided that the Board of Directors of EACOM may under certain circumstances terminate the support agreement in favour of an unsolicited superior proposal, subject to the payment of a break fee of C$7 million and subject to a right by Kelso to match such superior proposal.
The Special Committee of the Board of Directors of EACOM, following review of the terms and conditions of the offer and consideration of a number of factors unanimously recommended the offer to EACOM's Board of Directors. The Special Committee and the Board of Directors received an opinion from each of Canaccord Genuity Corp. and Sanabe & Associates LLC that as of the date of the opinion and subject to the assumptions outlined therein, the consideration payable to EACOM shareholders under the transaction was fair, from a financial point of view.
EACOM's Board of Directors, after receiving the recommendation of the Special Committee, unanimously determined that the offer was in the best interests of EACOM and its shareholders and unanimously recommended that shareholders accept the offer. The directors and senior executive officers of EACOM, as well as certain significant securityholders of EACOM, entered into lock-up agreements with Kelso and agreed to tender all of their common shares (including common shares issuable upon the exercise of options and warrants) to the offer.
On May 10, 2013, Kelso extended the expiry time of its offer to June 14, 2013, to allow for all required regulatory approvals to be obtained, including consents of the Ontario Ministry of Natural Resources. The offer was again extended on June 14, 2013 to June 25, 2013.
On June 25, 2013, Kelso took up and accepted payment for an additional 23,427,257 common shares validly deposited under the extension, dated July 14, 2013, which together with the 643,482,709 common shares previously deposited under the April 5, 2013 offer and taken up by the Kelso, represented approximately 98.24% of the issued and outstanding common shares of EACOM.
Kelso indicated under the support agreement with EACOM, dated March 22, 2013 relating to the offer, that if more than 90% of the common shares were taken up by Kelso, it could elect to proceed to acquire the remaining common shares not deposited under the offer (the "Remaining Shares"). Consequently, Kelso announced that it will proceed to acquire the remaining shares at a price of C$0.38 per common share, being the same consideration as contained in the offer of April 5, 2013.
EACOM is a TSX-V listed company, which owns eight sawmills, all located in Eastern Canada, and related tenures.
Kelso & Company is one of the oldest and most established firms specializing in private equity, which has invested in over 115 companies in a broad range of industry sectors with aggregate initial capitalization at closing of over $40 billion.
Further information can be found on Kelso & Company's website.
The Special Committee of the Board of Directors of EACOM, following review of the terms and conditions of the offer and consideration of a number of factors unanimously recommended the offer to EACOM's Board of Directors. The Special Committee and the Board of Directors received an opinion from each of Canaccord Genuity Corp. and Sanabe & Associates LLC that as of the date of the opinion and subject to the assumptions outlined therein, the consideration payable to EACOM shareholders under the transaction was fair, from a financial point of view.
EACOM's Board of Directors, after receiving the recommendation of the Special Committee, unanimously determined that the offer was in the best interests of EACOM and its shareholders and unanimously recommended that shareholders accept the offer. The directors and senior executive officers of EACOM, as well as certain significant securityholders of EACOM, entered into lock-up agreements with Kelso and agreed to tender all of their common shares (including common shares issuable upon the exercise of options and warrants) to the offer.
On May 10, 2013, Kelso extended the expiry time of its offer to June 14, 2013, to allow for all required regulatory approvals to be obtained, including consents of the Ontario Ministry of Natural Resources. The offer was again extended on June 14, 2013 to June 25, 2013.
On June 25, 2013, Kelso took up and accepted payment for an additional 23,427,257 common shares validly deposited under the extension, dated July 14, 2013, which together with the 643,482,709 common shares previously deposited under the April 5, 2013 offer and taken up by the Kelso, represented approximately 98.24% of the issued and outstanding common shares of EACOM.
Kelso indicated under the support agreement with EACOM, dated March 22, 2013 relating to the offer, that if more than 90% of the common shares were taken up by Kelso, it could elect to proceed to acquire the remaining common shares not deposited under the offer (the "Remaining Shares"). Consequently, Kelso announced that it will proceed to acquire the remaining shares at a price of C$0.38 per common share, being the same consideration as contained in the offer of April 5, 2013.
EACOM is a TSX-V listed company, which owns eight sawmills, all located in Eastern Canada, and related tenures.
Kelso & Company is one of the oldest and most established firms specializing in private equity, which has invested in over 115 companies in a broad range of industry sectors with aggregate initial capitalization at closing of over $40 billion.
Further information can be found on Kelso & Company's website.