EDMONTON, ALBERTA–(Marketwired – Dec. 2, 2013) – COMMERCIAL SOLUTIONS INC. (“Commercial” or “Company”) (TSX:CSA) today announced that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Motion Industries (Canada), Inc. (“Motion Canada”), an indirect wholly-owned subsidiary of Motion Industries, Inc. (“Motion Industries”) and Genuine Parts Company, pursuant to which Motion Canada, subject to certain conditions, agreed to acquire all of the issued and outstanding common shares (the “Common Shares”) of the Company. The transaction (the “Transaction”) will be implemented by way of a statutory plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”). Commercial’s shareholders will receive CAD$1.07 in cash per common share upon completion of the Transaction.
The CAD$1.07 per Common Share to be received by Commercial’s shareholders represents a 44.6% premium over the closing price of the Common Shares on the TSX on November 29, 2013, the last trading day prior to the announcement of the Transaction.
The board of directors of the Company (the “Commercial Board”) unanimously approved the Transaction and unanimously recommends that Shareholders vote in favour of it. Deloitte LLP, an independent financial advisor to the Company, has provided the Commercial Board with its opinion to the effect that the consideration to be received by Commercial’s shareholders pursuant to the Transaction is fair from a financial point of view. All members of the Commercial Board and Commercial’s senior management, who collectively own approximately 15.8% of the Common Shares, have separately entered into support and voting agreements (the “Support Agreements”) with Motion Canada pursuant to which each have agreed to vote their common shares in favour of the Arrangement. The Support Agreements will terminate in the event the Arrangement Agreement is terminated in accordance with its terms.
“This transaction brings our shareholders significant value and is an opportunity for our organization to integrate with a North American leader to provide a strong platform for enhanced client service and expanded opportunities for our employees,” said Mr. Jim Barker, Commercial’s President and Chief Executive Officer.
Mr. Bill Stevens, Chairman and CEO of Motion Industries, added, “We are excited by the opportunity to partner with the Commercial team. They represent a talented group and quality organization, and we look forward to their future contributions. The acquisition of Commercial better positions Motion Industries for continued growth in the Canadian marketplace.”
Completion of the proposed transaction is subject to customary closing conditions including, but not limited to, the approval of at least 66 2/3% of the votes cast in person or by proxy at a special meeting of Commercial’s shareholders, as well as regulatory and court approval. The special meeting of the Company’s shareholders will be held on or prior to January 28, 2014.
A proxy circular in connection with the Transaction will be prepared and mailed to Commercial’s shareholders over the coming weeks providing Shareholders with important information about the Transaction. The proxy circular and the Arrangement Agreement will be available on SEDAR at www.sedar.com. Subject to satisfaction or waiver of conditions precedent to closing, including receipt of required regulatory approvals, closing is expected to occur shortly following the special meeting of the Company’s shareholders.
Sequeira Partners Inc. is acting as the transaction financial advisor to the Company. In addition, Deloitte LLP is acting as an independent financial advisor to the Company in connection with the fairness opinion procured by the Commercial Board. McLennan Ross LLP is acting as legal advisor to the Company and Stikeman Elliott LLP is acting as legal advisor to Motion Canada.
Headquartered in Edmonton, Alberta, Commercial is one of Canada’s leading independent industrial distributors with 23 Services Centres and approximately 275 employees located across Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction. Commercial trades under the symbol “CSA” on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.
About Motion Canada, Motion Industries and Genuine Parts Company
Motion Canada is an indirect wholly-owned subsidiary of Motion Industries and Genuine Parts Company (NYSE:GPC). Motion Industries is a leading industrial parts distributor of bearings, mechanical power transmission, electrical and industrial automation, hydraulic and industrial hoes, hydraulic and pneumatic components, industrial products, safety products and material handling. Motion Industries has over 550 operations including 14 distribution centers throughout North America and serves more than 150,000 customers from the food and beverage, pulp and paper, iron and steel, chemical, mining and aggregate, petrochemical, automotive, wood and lumber and pharmaceutical industries. Motion Industries, including its operations in the U.S., Canada and Mexico, had 2012 revenues of $4.5 billion. For further information, please visit www.motionindustries.com.
Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada, Mexico and Australasia. The Company also distributes industrial replacement parts in the U.S., Canada and Mexico through its Motion Industries subsidiary. S. P. Richards Company, the Office Products Group, distributes business products nationwide in the U.S. and Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S., Canada and Mexico. Genuine Parts Company had 2012 revenues of $13.0 billion. For further information, please visit www.genpt.com.
Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of Canadian securities law and other applicable securities legislation concerning the future performance by the Company, including, but not limited to, statements relating to the proposed acquisition by Motion Canada of all of the issued and outstanding common shares of the Company. All statements, other than statements of historical facts, that address activities, events, outcomes and other matters that the Company plans, expects, intends, assumes, believes, budgets, predicts, forecasts, projects, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements. The completion of the above-mentioned proposed transaction is subject to customary closing conditions, termination rights and other risks and uncertainties including, without limitation, required regulatory approvals. Accordingly, there can be no assurance that the proposed transaction will occur, or that it will occur on the terms and conditions contemplated in this news release.
Nobel Investment Corp.
Commercial Solutions Inc.
Rozina Kassam CA
Chief Financial Officer
Commercial Solutions Inc.
President and Chief Executive Officer