$87.5 Million Bought Deal Treasury and Secondary Offering /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./
TORONTO, Oct. 25, 2021 /CNW/ - Neo Performance Materials Inc. ("Neo", the "Company") (TSX: NEO) is pleased to announce that it and a fund managed by Oaktree Capital Management, L.P. (the "Selling Shareholder") have entered into an agreement with Paradigm Capital Inc. and Canaccord Genuity Corp. (the "Co-Lead Underwriters"), on behalf of a syndicate of underwriters (together with the Co-Lead Underwriters, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 2,598,000 common shares of the Company (the "Common Shares") from treasury at a price of $19.25 per Common Share (the "Offering Price") (the "Treasury Offering") and 1,949,000 Common Shares from the Selling Shareholder at the Offering Price (the "Secondary Offering") for total gross proceeds of $87.5 million (the "Offering").
In addition, the Selling Shareholder has granted the Underwriters an option to purchase that number of additional Common Shares at the Offering Price equal to 15% of the total base Offering, exercisable up to 30 days following the closing of the Offering.
The Selling Shareholder currently holds 12,509,155 common shares of the Company, representing approximately 32.9% of the issued and outstanding common shares. Following the closing of the Offering, the Selling Shareholder will hold 10,560,155 common shares, representing approximately 26.0% of the issued and outstanding common shares. In addition, the Selling Shareholder, its affiliates and other entities managed by Oaktree Capital Management, L.P. have agreed with the Underwriters that their remaining common shares of the Company will be subject to a 120 day lock-up period, subject to customary exceptions.
The Company intends to use the net proceeds from the Treasury Offering for general corporate purposes, including the expansion, maintenance of global assets and the pursuit of strategic growth opportunities around the globe. The Company will not receive any proceeds from the Secondary Offering. The net proceeds of the Secondary Offering will be payable to the Selling Shareholder.
The Common Shares will be offered by way of a short form prospectus to be filed in all of the provinces of Canada other than Quebec. Private placement offerings in the United States will be made to "qualified institutional buyers" pursuant to Rule 144A of the United States Securities Act of 1933. The Offering is expected to close on or about November 16, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary corporate and regulatory approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities. No securities regulatory authority has either approved or disapproved of the contents of this news release.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.