Finning International Inc
") (TSX:FTT) and Collicutt Energy Services Ltd.
") (TSX:COH) announced today that they have entered into a definitive transaction and support agreement dated November 27, 2007 ("the Support Agreement") pursuant to which Finning has agreed to make an offer (the "Offer") to acquire all of the issued and outstanding common shares of Collicutt.
Collicutt's Board of Directors has agreed to unanimously recommend that Collicutt shareholders accept Finning's offer.
The total value of this transaction is approximately C$145 million.
is a leading Canadian oilfield service company active primarily in the servicing and fabrication of natural gas compression equipment and electric power generation (EPG) packaging, mainly in Alberta and also B.C.
Steven Collicutt, President and Chief Executive Officer of Collicutt commented: "This transaction recognizes the tremendous underlying value that has been built by our company over the past 20 years, and provides all Collicutt shareholders with an attractive premium to recent trading values.
Certain insiders, including Collicutt's Chairman and CEO, Steven Collicutt have entered into a lock-up agreement with Finning which provides that, subject to certain terms and conditions, they will tender their shares into the Offer.
Collectively this group owns a total of 8.1 million shares that represents approximately 82% of the presently issued and outstanding shares.
Completion of the Offer is subject to certain customary conditions, including, among other things, acceptance by the holders of 90% of the outstanding Collicutt shares and normal course regulatory approvals.
Further, the Support Agreement includes a non-solicitation covenant to the benefit of Finning
, a right in favour of Finning
to match any competing offers and a termination fee of approximately $2.9 million payable to Finning
, for among other things, the recommendation by Collicutt's
Board to accept a superior bid.
The Offer, unless extended, will expire on January 15, 2008.
Finning's takeover bid circular (the "Circular"), which contains all the terms of the Offer, is expected to be mailed during the first week of December 2007 to Collicutt shareholders of record.
A copy of the Circular will be available on SEDAR
A condition of the transaction is that Steven Collicutt
acquire, at fair market price, the Collicutt
power generation and compression sales and services activities in California currently conducted through Collicutt Energy Services Inc. and the Collicutt used oilfield equipment business in Rimbey, Alberta.
National Bank Financial, Inc.
is acting as financial advisor and Borden Ladner Gervais, LLP
is acting as legal advisor to Finning
Peters & Co.
Limited is acting as financial advisor and Davis LLP
is acting as legal advisor to Collicutt
Conference Call and Webcast
Finning and Collicutt
will hold a joint investor conference call on Tuesday November 27, 2007 at 11:30 am Eastern Time.
An electronic copy of a presentation summarizing the highlights of the transaction will be available on both Finning's and Collicutt's
website in advance of the conference call.
Finning and Collicutt
assume no obligation to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein do not materialize.
Refer to Finning's and Collicutt's
annual report, management information circular, annual information form and other filings with the Ontario Securities Commission
and Toronto Stock Exchange for further information on risks and uncertainties that could cause actual results to differ materially from forward-looking statements contained in this report.
President & CEO