- Transaction successfully completes
Nordion’s strategic review, subject to closing, delivering value to
shareholders
- Shareholders to receive an aggregate
cash consideration of US $11.75 per share
- Nordion to hold conference call and
webcast at 8:00 am ET on Monday, March 31, 2014 to discuss the
announcement
Nordion Inc. (TSX:NDN) (NYSE:NDZ), a leading provider of
products and services to the global health science market,
announced that it has entered into a definitive agreement (the
"Arrangement Agreement") to be acquired by Sterigenics, a global
leader in sterilization services and a portfolio company of GTCR
LLC, a leading private equity firm based in Chicago, Illinois, USA.
Pursuant to this Arrangement Agreement, shareholders will receive
an aggregate cash consideration of US$11.75 per share
(collectively, the "Consideration"). Upon closing of this
transaction, Nordion will operate as a standalone company within
Sterigenics and will continue to operate under the Nordion
name.
The total transaction is valued at approximately US$727 million
and will be funded using a combination of new debt facilities and
equity financing, both of which are fully committed, Sterigenics's
cash on hand, and a portion of Nordion's cash on hand. The
Consideration represents a premium of approximately 12% to the
closing price of US$10.48 per share on the NYSE on March 27, 2014
and a premium of approximately 24% over the 90-day volume weighted
average price of US$9.47 per share on the NYSE. Adjusting for the
Company’s fiscal Q1 2014 reported cash and cash equivalents balance
of US$319.5 million or US$5.16 per share, the cash adjusted premium
to the 90-day volume weighted average price on the NYSE is
approximately 53%.
"This transaction delivers value to our shareholders and is a
good strategic fit for Nordion", said Steve West, Chief Executive
Officer of Nordion. "We believe this partnership is beneficial to
Nordion's employees and our customers, as Nordion and Sterigenics
combine their global expertise, industry knowledge and the same
focus on high quality standards and values. This transaction also
marks the successful completion of Nordion’s strategic review."
Sterigenics, a global leader in sterilization services
headquartered in Deerfield, Illinois, USA, offers technology in all
major sterilization modalities.
“Nordion is a recognized global leader in the medical isotopes
and sterilization sectors, sharing a similar mission to improve
global public health,” said Michael Mulhern, Chief Executive
Officer, Sterigenics. “Through this acquisition, our focus is to
ensure a stable long-term source of Cobalt-60 that will maintain
customer confidence in the future availability and growth of gamma
sterilization as one of many sterilization options. In the
short term, Nordion customers should expect business as usual. Over
the long run, we look forward to working with existing and new
reactor partners to create a larger and more reliable supply of
Cobalt-60 for the future.”
The Board of Directors of Nordion, acting on the unanimous
recommendation of the Special Committee comprised solely of
independent directors, has unanimously approved the transaction and
recommends that Nordion shareholders vote in favour of the
transaction.
"Nordion's Board of Directors fully and unanimously supports
this transaction", said Bill Anderson, Chairman of the Board of
Nordion. "The Management team, with direction from the Special
Committee, undertook a comprehensive process to reach an outcome
that the Board agrees delivers significant value to our
shareholders and serves the best interest of our employees,
customers and business."
Transaction DetailsThe Arrangement Agreement between
Nordion and Sterigenics provides for a non-solicitation covenant on
the part of Nordion, subject to customary "fiduciary out"
provisions. A termination fee of US$12 million would be payable to
Sterigenics in certain circumstances, including if it fails to
exercise its right to match in the context of a superior proposal
supported by Nordion, and a reverse break fee of US$24 million
would be payable by Sterigenics to Nordion if the transaction is
not completed in certain circumstances.
The transaction will be implemented by way of a plan of
arrangement under the Canada Business Corporations Act and is
subject to court approval and the approval of Nordion's
shareholders. Implementation of the arrangement will be subject to
the approval of 662/3% of the votes cast by shareholders present in
person or by proxy at the special meeting of shareholders of
Nordion.
The transaction is also subject to certain closing conditions,
including receipt of all regulatory approvals, such as under
competition/antitrust laws and the Investment Canada Act, and the
coming into force of certain amendments to the Nordion and
Theratronics Divestiture Authorization Act (the "Nordion Act") as
described below. In addition, the transaction is effectively
conditional upon the Company having at closing US$300 million of
available cash on hand to complete the steps of the transaction. As
of the date hereof, the Company has approximately US$330 million of
cash and cash equivalents. The balance of the transaction is being
financed through Sterigenics's (or affiliates or related companies)
debt and equity financing and excess cash on its balance sheet. The
transaction is not subject to any financing condition and is
expected to close in the second half of calendar 2014.
The proposed legislative amendments to the Nordion Act were
included in the most recent Budget Implementation Act, which was
introduced to the House of Commons on March 28, 2014. In accordance
with such proposed amendments, the foreign-ownership restrictions
applicable to the Company will no longer apply to a change of
control transaction with a "non-resident" (as defined in the
Nordion Act) if such a transaction is approved under the Investment
Canada Act. As noted above, the coming into force of the proposed
amendments, as well as approval under the Investment Canada Act,
among other things, is necessary to permit Sterigenics to acquire
all the shares of Nordion.
Information Circular and Shareholders MeetingA management
information circular will be prepared and mailed to shareholders
over the coming weeks providing shareholders with important
information about the transaction. Nordion is required to hold a
special shareholder meeting within 60 days of the date hereof.
Details of the transaction as well as the rationale for the Board
of Directors' support of the transaction will be set out in the
information circular. A copy of the opinion received by the Board
of Directors regarding the Consideration payable in the transaction
from a financial perspective will also be included in the
information circular.
Nordion intends to make an application to the Commercial List of
the Superior Court of Justice in Toronto, Ontario on or about March
31, 2014 for an order extending the time for calling and holding of
the annual general meeting (the "AGM") currently scheduled
to take place on April 29, 2014, such that the AGM would be held
concurrently with the special meeting of shareholders to consider
the transaction. Nordion will update and provide further details in
respect of that matter in an upcoming news release.
Further details regarding the terms of the transaction are set
out in the Arrangement Agreement, which Nordion will file on SEDAR
and EDGAR and will render available on the Company’s website at
www.nordion.com further to today’s announcement. The management
information circular will also be made available on the Company’s
website at www.nordion.com and under the profile of Nordion on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov concurrently
with the mailing to the shareholders.
Conference CallNordion will hold a conference call on
Monday, March 31, 2014 at 8:00 am ET to discuss the announcement.
This call will be webcast live at www.nordion.com, and will be
available after the call in archived format at
www.nordion.com/webcasts. To participate, please dial
1-866-696-5910 (toll-free Nordion America) or 1-416-340-2217
(International) with passcode 8772292.
About Nordion Inc.Nordion Inc. (TSX:NDN) (NYSE:NDZ) is a
global health science company that provides market-leading products
used for the prevention, diagnosis and treatment of disease. We are
a leading provider of medical isotopes and sterilization
technologies that benefit the lives of millions of people in more
than 40 countries around the world. Our products are used
daily by pharmaceutical and biotechnology companies, medical-device
manufacturers, hospitals, clinics and research laboratories.
Nordion has over 400 highly skilled employees in three locations.
Find out more at www.nordion.com and follow us at
twitter.com/NordionInc.
About SterigenicsHeadquartered in Deerfield, Illinois,
Sterigenics operates out of 39 facilities across the Americas,
Europe and Asia providing outsourced contract sterilization
services to the medical device, pharmaceutical, food safety and
high performance/specialty materials industries.
About GTCR LLCFounded in 1980, GTCR is a leading private
equity firm focused on investing in growth companies in the
Financial Services & Technology, Healthcare and Information
Services & Technology industries. The Chicago-based firm
pioneered The Leaders Strategy™ – finding and partnering with
management leaders in core domains to identify, acquire and build
market-leading companies through transformational acquisitions and
organic growth. Since its inception, GTCR has invested more than
$10 billion in over 200 companies. For more information, please
visit www.gtcr.com.
AdvisorsJefferies LLC is acting as financial advisor to
Nordion in connection with the transaction. Stikeman
Elliott LLP and Skadden, Arps, Slate, Meagher & Flom LLP
are Nordion's legal counsel and Davies, Ward, Phillips &
Vineberg LLP is the Special Committee's legal counsel. Gowling
Lafleur Henderson LLP and Kirkland & Ellis LLP are counsel to
Sterigenics.
Caution Concerning Forward-Looking Statements
This release contains forward-looking statements and
forward-looking information, within the meaning of certain
securities laws, including under applicable Canadian securities
laws and the "safe harbour" provisions of the United States Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements relating to
our expectations with respect to: the timing and outcome of the
proposed acquisition by Sterigenics of all of the outstanding
common shares of Nordion, the anticipated benefits of the
transaction to the parties and their respective security holders;
the timing and anticipated receipt of required regulatory, court
and security holder approvals for the transaction; the timing and
anticipated enactment of the proposed amendments to the Nordion
Act; Sterigenics’s ability to complete its financing; the ability
of the parties to satisfy the other conditions to, and to complete,
the transaction; and the anticipated timing of the meeting of
Nordion shareholders to consider the transaction and for the
closing of the transaction. The words "will", "expect", "subject
to", "anticipate", "continue", "may", "should", "believe",
"intends" and similar words and expressions are also intended to
identify forward-looking statements or information. In respect of
the forward-looking statements and information concerning the
anticipated benefits and completion of the proposed transaction and
the anticipated timing for completion of the transaction, Nordion
and Sterigenics have provided such statements and information in
reliance on certain assumptions that they believe are reasonable at
this time, including assumptions as to the time required to prepare
and mail security holder meeting materials; the ability of the
parties to receive, in a timely manner and on satisfactory terms,
the necessary regulatory, court and shareholders approvals; the
timing and anticipated enactment of the proposed amendments to the
Nordion Act; the ability of the parties to satisfy, in a timely
manner, the other conditions to the closing of the transaction; and
other expectations and assumptions concerning the transaction.
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. The proposed transaction could be modified,
restructured or terminated. Accordingly, readers should not place
undue reliance on the forward-looking statements and information
contained in this press release.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on other factors that could
affect the operations or financial results of the parties are
included in reports on file with applicable securities regulatory
authorities.
The forward-looking statements contained in this news release
are made as of the date of this release and, accordingly, are
subject to change after such date. The Company does not assume any
obligation to update or revise any forward-looking statements,
whether written or oral, that may be made from time to time by us
or on our behalf, except as required by applicable law.
Nordion Inc.INVESTORS:Ana Raman,
613-595-4580investor.relations@nordion.comorMEDIA:Shelley Maclean,
613-592-3400 x. 2414shelley.maclean@nordion.com
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