Atlas Cold Storage and Avion Group Reach Agreement on Revised Offer at CDN$7.50 per Trust Unit
10/16/2006 - Atlas Cold Storage Income Trust (TSX: FZR.UN) (“Atlas”) and Avion Group hf (ICEX: AVION) (“Avion”) have reached an agreement on a friendly transaction under which Avion will increase its offer to acquire all of the outstanding trust units (the “Units”) of Atlas. Atlas and Eimskip Atlas Canada, Inc., an indirect subsidiary of Avion, have entered into a definitive support agreement pursuant to which the offer will be increased to CDN$7.50 in cash per Unit and will be extended to the 10th day after the date that a notice of variation and extension outlining the increased offer is delivered to registered holders of trust units, unless extended. The revised offer values the transaction at approximately CDN$583 million on a fully-diluted basis.
Following an extensive review of strategic alternatives, the Board of Trustees of Atlas determined that the revised Avion offer is fair to unitholders (other than Avion and parties acting jointly or in concert with Avion) and unanimously recommends that its unitholders accept the offer. Atlas’ financial advisors, BMO Capital Markets and Brascan Financial Real Estate Group, have also each provided opinions to the Atlas Board of Trustees that, as of October 15, 2006 and subject to the assumptions and limitations on which the opinions are based, the consideration to be received under the revised Avion offer is fair, from a financial point of view, to unitholders (other than Avion and parties acting jointly or in concert with Avion).
With the negotiated price of CDN$7.50 per unit, Atlas unitholders will not be receiving any further monthly distributions.
In support of the Avion offer, Atlas unitholders holding approximately 20.6% of the outstanding units (on a fully-diluted basis) have agreed to support the bid from Avion and have signed irrevocable lock-up agreements for such purpose. The units subject to the lock-up, combined with the 13.8% of units owned by Avion and KingStreet Capital Partners (“KingStreet”) represent 34.4% of the total units outstanding (on a fully-diluted basis).
David Williamson, President and Chief Executive Officer of Atlas said: “The revised Avion offer is the result of an extensive review of strategic alternatives by Atlas’ Trustees and management, including contacting 57 potential bidders and entering into confidentiality agreements and providing data room access to 22 parties. The revised Avion offer is the most attractive third party alternative that Atlas considered or received throughout this process and, accordingly, the Trustees have unanimously recommended acceptance of this offer. Atlas’ Board of Trustees has been advised that Trustees and members of Atlas’ leadership board will tender their Units to the bid.”
Magnus Thorsteinsson, Executive Chairman of Avion Group said: “We are pleased to have secured the unanimous support of the Atlas Board of Trustees and lock-up agreements with the two largest unitholders of the Trust. The strategic rationale for the acquisition of Atlas is compelling and we expect it will provide significant benefits to both Atlas’ and Avion’s customers, employees and suppliers. Most importantly, this transaction supports our growth strategy and through our enhanced North American footprint we will continue to expand our business.”
“We look forward to working with the Atlas team to ensure a seamless and efficient integration that provides benefits to all stakeholders,” added Mr. Thorsteinsson. “With the addition of Atlas, Eimskip, our temperature-controlled transportation and logistics subsidiary, will control a network of more than 90 temperature-controlled facilities around the world. This transaction will provide broader customer reach for both companies and create a significant competitive product offering.”
Avion worked in partnership with Toronto-based KingStreet Capital Partners to structure and finance the acquisition. KingStreet through KingStreet Real Estate Growth LP No 2 is providing structured real estate secured financing to the transaction.
The mailing to Atlas unitholders of a notice of variation and extension amending the offer together with an amended Atlas Trustees’ Circular is expected to occur on or before October 18, 2006 for completion on or about October 30, 2006. The notice of variation and extension from Avion will set out the details as to how to tender to the revised Avion offer. Completion of the offer will be subject to certain conditions, including a sufficient number of Units being tendered to the offer such that Avion would own at least 66 2/3% of Atlas Units on a fully-diluted basis, the absence of a material adverse change with respect to Atlas and certain other conditions.
The support agreement provides for the payment of a termination fee to Avion by Atlas of CDN$15 million under certain circumstances.
Atlas retained BMO Capital Markets and Brascan Financial Real Estate Group to act as financial advisors and McCarthy Tetrault LLP to act as legal advisors to Atlas. Atlas retained Osler, Hoskin & Harcourt LLP to act as legal advisors to the Board of Trustees of Atlas and the Board of Directors of Atlas Cold Storage Holdings Inc.
Avion Group retained CIBC World Markets Inc. and RBC Capital Markets to act as financial advisors and dealer managers and Bennett Jones LLP and Goodmans LLP to act as legal advisors.
About Avion Group hf
Avion Group hf is a leading investment company organized into three business divisions specializing in air, land and sea transportation solutions worldwide. Avion, with a market capitalization of approximately CDN$940 million, is one of the largest companies listed on the Icelandic Stock Exchange (ICEX) and is one of the fastest growing companies in Europe.
About Eimskipafelag Islands EHF
Founded in 1914, with approximately one third of its initial capital stock raised in Canada, Eimskip was the first Icelandic shipping company and is the largest transportation company in that country today. Eimskip has 80 operating bases in 15 countries in Europe, Latin America, Asia and North America, including St. John’s, Newfoundland. Eimskip has 40 temperature-controlled facilities worldwide with a storage capacity of more than 600,000 tons as well as a fleet of 36 vessels.
About KingStreet Capital Partners
KingStreet Capital Partners is a Private Equity real estate investment business seeking opportunities where active management can create value. KingStreet has closed two investment funds totaling $570 million of equity from 11 institutional investors for a $2.0 billion investment program. KingStreet implements value creation plans through structuring financial solutions for its partners and implementing real estate strategies to maximize value.
Atlas Cold Storage Income Trust through its operating arm, Atlas Cold Storage, is an integral part of the supply chain of the North American frozen and chilled food industry, providing warehousing, distribution and logistics services. Through an integrated network of 52 facilities, Atlas Cold Storage provides a broad range of temperature-controlled storage, transportation and third party logistics management services. Atlas Cold Storage Income Trust units are listed on the Toronto Stock Exchange under FZR.UN.
This news release may contain certain forward-looking statements. These forward-looking statements include, among others, statements with respect to Atlas’ beliefs, plans, expectations, anticipations, estimates and intentions. By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist those predictions, forecasts, projections and other forward-looking statements will not be achieved. Atlas cautions readers not to place undue reliance on these statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the risk factors identified from time to time in Atlas’ filings with Canadian securities regulators, in reports to unitholders and in other communications, and other uncertainties and potential events. Atlas does not undertake to update any forward-looking statements contained in this news release.
- Contact Information
- Eggert Skulason
- Avion Group
- Contact via E-mail
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.