Montreal, Quebec, December 30, 2013 – TransForce Inc. (TSX: TFI, OTCQX:TFIFF), a North American leader in the transportation and logistics industry, today announced that it has entered into an Arrangement Agreement with Vitran Corporation Inc. (Nasdaq:VTNC) (TSX:VTN) pursuant to which an affiliate of TransForce would acquire all of the issued and outstanding shares of Vitran not already owned by TransForce at a price of USD$6.50 per share in cash. The total transaction, including the assumption of Vitran’s outstanding net debt of approximately US$29 million at October 31, 2013, is valued at approximately US$136 million. The US$6.50 share price represents an 11.16% premium to Vitran’s closing price on NASDAQ on December 9, 2013, the day that Vitran’s proposed transaction with Manitoulin Transport Inc. was announced, and a 41.38% premium to the closing price on NASDAQ on September 20, 2013, the day before the announcement of the sale of Vitran’s US Less-Than-Truckload (LTL) business.
Vitran has terminated the agreement that it had entered into with an affiliate of Manitoulin Transport on December 9, 2013, which contemplated the sale of Vitran at a price of USD$6.00 per share, following the decision by Manitoulin Transport to not exercise its right to match TransForce’s offer of USD$6.50 per share announced on December 20, 2013.
Mr. Alain Bédard, Chairman, President and CEO of TransForce noted: “We are delighted to have reached agreement with Vitran for what represents the acquisition of an important strategic asset for TransForce with considerable synergistic benefits in the near term and into the future. We are looking forward to leveraging the strengths of both companies to enhance our service offering for our customers and welcoming the Vitran employees to the TransForce team.”
The transaction is structured as a Plan of Arrangement under the Business Corporations Act (Ontario) (the “Arrangement”). The Arrangement has been unanimously approved by the board of directors of Vitran and is subject to approval by the shareholders of Vitran at a special meeting expected to be held in February 2014 (the “Special Meeting”) and final approval of the Ontario Superior Court of Justice following the Special Meeting. The Arrangement is also subject to the receipt of applicable regulatory approvals, including approval under the Competition Act, and satisfaction of other customary closing conditions. The Arrangement is not conditional on TransForce obtaining financing. The Arrangement Agreement contains customary non-solicitation provisions and provides that the board of directors of Vitran may, under certain circumstances, terminate the Arrangement Agreement in order to accept an unsolicited superior proposal, subject to a matching right in favour of TransForce. If the Arrangement Agreement is terminated in certain circumstances, including if Vitran accepts a superior proposal, TransForce is entitled to a termination payment of US$4.0 million. The Arrangement is expected to close in late February or early March 2014. An information circular (the “Information Circular”) outlining details of the Arrangement and Special Meeting is expected to be prepared by Vitran and mailed to shareholders of Vitran in January 2014. Copies of the Information Circular will be available under Vitran’s profile on SEDAR atwww.sedar.com and on EDGAR at www.sec.gov.
TransForce currently owns 19.95% of Vitran’s outstanding shares. In addition, and as previously-announced on November 1, 2013, TransForce signed a lock-up agreement with Quinpool Holdings Partnership, a subsidiary of Clarke Inc. (TSX: CKI), whereby Quinpool Holdings has, among other things, agreed to support a transaction like the Arrangement, including voting its 418,837 shares of Vitran in favour thereof. The 418,837 shares held by Quinpool Holdings represent approximately 2.55% of Vitran’s outstanding shares.
TransForce has retained National Bank Financial Markets as its financial adviser and Heenan Blaikie LLP as legal adviser.