WINNIPEG, Manitoba, Dec. 27, 2017 (GLOBE NEWSWIRE) — Gendis Inc. (“Gendis” or the “Corporation”) (TSX:GDS) announced today that, upon the recommendation of the special committee comprised of its independent directors (the “Special Committee”), Gendis entered into a support agreement (the “Support Agreement”) with Mr. James Cohen, Chief Executive Officer and a director of Gendis, and a corporation owned and controlled by Mr. James Cohen, with respect to a going private transaction (the “Going Private Transaction”), the particulars of which are as follows:

  1. 10457035 Canada Inc. (the “Offeror”), a corporation owned and controlled by James Cohen, will offer to acquire all of the issued and outstanding shares of Gendis, other than shares owned by the Offeror and joint actors of the Offeror, at a cash price of $5.25 per share, which offer will be made pursuant to a formal take-over bid circular to be sent to shareholders of Gendis no later than January 18, 2017 (the “Offer”);
     
  2. the board of directors of Gendis (the “Gendis Board”) will unanimously recommend that the shareholders of Gendis tender their Gendis shares to the Offer;
     
  3. the Gendis Board will abridge the deposit period for the Offer to a mutually acceptable date that is approximately (and not less than) 35 days following the mailing of the take-over bid circular to Gendis shareholders; and
     
  4. assuming that the Offer is successful, Gendis will call and hold a special meeting (the “Second Step Meeting”) of the Gendis shareholders as soon as practicable thereafter, to approve a second step transaction (the “Second Step Transaction”), either by way of share consolidation or amalgamation, whereby the Gendis shareholders who do not tender to the Offer will receive cash consideration equal to $5.25 per share.

The Offer will contain a number of closing conditions that are customary to transactions of a similar nature, including but not limited to there being no material adverse change with respect to Gendis, provided that any change in the market value of securities owned by Gendis will not be considered to be a material adverse change.  The Offeror and Gendis have agreed to negotiate the closing conditions to the Offer in good faith.

The joint actors of the Offeror in respect of the Offer are: (i) James Cohen; (ii) Anna-Lisa Cohen, sibling of James Cohen; (iii) Anthony Cohen, sibling of James Cohen and a director of Gendis; (iv) Ash Wellington Investments Limited, a corporation owned and controlled by James Cohen and the parent company of the Offeror; (v) Higher Prospects ULC, a company owned and controlled by Anna-Lisa Cohen; (vi) CEYX Properties Ltd., a company owned and controlled by Anthony Cohen; and (vii) (collectively, the “Joint Actors”).  The Joint Actors collectively own 72.45% of the issued and outstanding Gendis shares.  The Joint Actors have entered into support agreements with the Offeror pursuant to which they have: (i) agreed to directly or indirectly finance the Offer made by the Offeror; (ii) undertaken to the Offeror and Gendis to not tender any Gendis shares to the Offer; and (iii) agreed to vote their respective Gendis shares held by each of them in favour of the Second Step Transaction at the Second Step Meeting.  In addition, James Cohen, Anna-Lisa Cohen and Anthony Cohen have agreed to cause a corporation controlled by them to provide financing to the Offeror to enable it to acquire the shares of Gendis tendered under the Offer.

The Offeror has also entered into lock-up agreements with certain other Gendis shareholders (the “Locked-up Shareholders”) who have agreed to tender, in the aggregate, 1,886,033 Gendis shares (the “Locked-up Shares”) to the Offer in the event that it is made.  The Locked-up Shares represent approximately 54.85% of the issued and outstanding Gendis shares, excluding Gendis shares held by the Offeror and the Joint Actors.  At the special meeting of Gendis shareholders to be held following the completion of the Offer for the purpose of approving the Second Step Transaction, the Offeror intends to vote all of the Gendis shares it acquires pursuant to the Offer in favour of the Second Step Transaction.

The Second Step Transaction will be subject to the approval: (i) by not less than two-thirds of the votes attached to the Gendis shares which are cast at the Second Step Meeting; and (ii) by not less than a majority of the votes attached to Gendis shares, other than the Gendis shares held by the Joint Actors prior to the completion of the Offer. 

The Joint Actors and the Locked-up Shareholders have undertaken to vote in favour of the Second Step Transaction at the Second Step Meeting.  The Offeror also intends to vote all of the shares it acquires under the Offer in favour of the Second Step Transaction.

In the event that the Going Private Transaction is implemented successfully, Gendis will be owned by the Offeror and its Joint Actors.

The Special Committee, after receiving: (i) the formal valuation of Blair Franklin Capital Partners Inc. (“Blair Franklin”) with respect to the Gendis shares; (ii) a fairness opinion of Blair Franklin with respect to the consideration to be received by Gendis shareholders under the Going Private Transaction; and (iii) legal and financial advice, determined that the Going Private Transaction was in the best interests of the Corporation and fair to the minority shareholders of Gendis (other than the Joint Actors) and unanimously recommended that the Gendis Board approve the entering into of the Support Agreement.  The Gendis Board determined unanimously (with James Cohen and Anthony Cohen abstaining) that the Going Private Transaction is in the best interests of Gendis and is fair to the minority shareholder of Gendis (other than the Joint Actors) and will unanimously recommend that the Shareholders (other than the Joint Actors) tender to the Offer and vote in favour of the Second Step Transaction.  The Support Agreement preserves the right of the Gendis Board to terminate the Support Agreement in the event of a “Superior Proposal” (as defined in the Support Agreement).

The Special Committee engaged Blair Franklin as it financial advisor.  Blair Franklin has provided a formal valuation that was completed under the supervision of the Special Committee and which determined that, as at December 22, 2017, the fair market value of the Gendis shares was in the range of $4.90 to $5.45 per share.  Blair Franklin has also provided an oral opinion that the consideration to be received by the shareholders of Gendis (other than the Joint Actors) pursuant to the Going Private Transaction is fair to such shareholders from a financial point of view.  The written formal valuation and fairness opinion of Blair Franklin will be included in the joint take-over bid circular and directors’ circular to be sent to Gendis shareholders and should be read carefully, in their entirety, together with other background information contained therein.

The Going Private Transaction is subject to regulatory review and approval.

For further information regarding the Going Private Transaction, please contact Dr. Jerry Gray, Chair of the Board at (204) 261-1624 or Mr. Brian Hayward, Chair of the Special Committee at (204) 793-6617.

Caution regarding Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties.  All statements other than statements of historical facts included in this press release, including statements regarding the proposed Going Private Transaction, may constitute forward-looking statements within the meaning of Canadian securities laws.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan” or “believe”, the negatives of these terms, variations of them and similar expressions.  Although Gendis believes that the assumptions and expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these assumption and expectations will prove to be correct, that the proposed Going Private Transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release.  Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

Risks and uncertainties inherent in the nature of the proposed Going Private Transaction include, without limitation, the failure of the parties to obtain the necessary shareholder or regulatory approvals, failure of conditions of closing to be satisfied.

The forward-looking statements in this press release reflect Gendis’ expectations on the date hereof and are subject to change.  Gendis expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.

This announcement does not constitute an offer to purchase or a solicitation of an offer to sell shares of Gendis.