Ergoresearch to acquire Victhom
LAVAL, QC, March 14, 2013 /CNW Telbec/ - Ergoresearch Ltd. (TSXV: ERG)
("Ergoresearch") and Victhom Human Bionics Inc. (TSXV: VHB) ("Victhom") announced today that Ergoresearch Inc. (the "Purchaser"), a direct wholly-owned subsidiary of Ergoresearch, and Victhom have
entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which all of the outstanding securities of Victhom will
be acquired by the Purchaser. Under the terms of the Arrangement
Agreement, the total consideration is $4.1 million and existing holders
of common shares of Victhom will receive $0.08 in cash per share, the
holders of the class A preferred shares of Victhom will receive a cash
amount equal to $2,556,188 divided by the number of issued and
outstanding series A preferred shares on closing of the arrangement.
There are currently 19,297,654 common shares and 6,479,131 Series A
Preferred Shares of Victhom issued and outstanding.
The all-cash consideration of $0.08 per common share represents a
premium of approximately 60% over the closing price of the common
shares price on the TSX Venture Exchange on March 13, 2013, and 118.5%
over the volume-weighted average trading price of the common shares for
the past 20 trading days. All stock options granted and outstanding of
Victhom will be cancelled without consideration as none of these
options will be "in the money" given the cash consideration offered for
the common shares.
Normand Rivard, President and Chief Executive Officer of Victhom, said:
"We believe that the proposed transaction is a favorable outcome for
our shareholders and we are pleased to see that our technology will be
held by a Québec-based company."
Shareholder Support
Victhom's four largest shareholders, Midsummer Investment Ltd., Islandia
LP, Fonds de solidarité des travailleurs du Québec (F.T.Q.), SIPAR Inc.
and all directors and officers of Victhom who own securities of
Victhom, holding as a group approximately 23.61% of the outstanding
common shares of Victhom and approximately 93.06% of the outstanding
preferred shares of Victhom, have agreed, pursuant to support and
voting agreements, to support and vote in favour of the transaction.
The support and voting agreements will only terminate upon the
termination of the Arrangement Agreement.
Board Approves Unanimously
The transaction has been approved unanimously by the Board of Directors
of Victhom. In doing so, the Board of Directors has determined that the
arrangement is fair to the shareholders and is in the best interests of
Victhom and its shareholders. As a result, the Board of Directors has
authorized the submission of the arrangement to the securityholders of
Victhom for their approval at a special meeting of securityholders and
has resolved to recommend to the shareholders that they vote in favour
of the transaction. In reviewing the proposed transaction, the Board of
Directors received an opinion from Bloom Burton & Co. that the
consideration to be received by all the shareholders under the
transaction is fair from a financial point of view to such
shareholders.
Transaction Terms
The transaction will be implemented by way of a court-approved statutory
plan of arrangement under the Canada Business Corporations Act and will
have to be approved by the securityholders of Victhom at a special
meeting to be held on or about April 23, 2013. The plan of arrangement
will be subject to the approval of (i) 66 2/3% of the votes cast by all
of the holders of common shares of Victhom, (ii) 66 2/3% of the votes
cast by all of the holders of class A preferred shares of Victhom, and
(iii) a simple majority of the votes cast by all shareholders of
Victhom, voting as a single class, excluding interested parties. Once
approved by the securityholders, the plan of arrangement will then have
to be sanctioned by the Superior Court of Québec.
The transaction is subject to certain other customary conditions
described in the Arrangement Agreement, including Victhom's compliance
with covenants relating to its operations until closing. The
Arrangement Agreement contains customary provisions prohibiting Victhom
from soliciting any other acquisition proposals and providing the
Purchaser with a right to match any unsolicited acquisition proposal
from a third party that the Board of Directors of Victhom determines,
in the exercise of its fiduciary duties, to be superior to the
transaction contemplated by the Arrangement Agreement. In the event
that the Purchaser does not match such a superior proposal, the Board
of Directors of Victhom will be entitled to change its recommendation
and the Purchaser will then have the option to either terminate the
Arrangement Agreement or force Victhom to hold the special meeting of
securityholders.
The Arrangement Agreement provides for Victhom to pay the Purchaser a
termination fee in the amount of $300,000 and reimburse Purchaser's
out-of-pocket expenses under certain circumstances. The Arrangement
Agreement also provides for the Purchaser to pay Victhom a reverse
termination fee in the amount of $300,000 under certain circumstances.
A copy of Bloom Burton & Co.'s fairness opinion, a description of the
various factors considered by the Board of Directors in its decision to
approve the transaction and recommend it to the securityholders, as
well as other relevant background information, will be included in the
information circular to be mailed to the securityholders of Victhom in
advance of the special meeting to vote on the plan of arrangement.
Copies of the information circular, the Arrangement Agreement, the plan
of arrangement, the support and voting agreements and certain related
documents will be filed with Canadian securities regulators and will be
available on SEDAR (www.sedar.com) as part of Ergoresearch's and Victhom's public filings.
McCarthy Tétrault LLP is acting as legal counsel to Victhom and Fasken
Martineau DuMoulin LLP is acting as legal counsel to the Purchaser and
Ergoresearch.
Financing
Ergoresearch also announced that the Purchaser has accepted an offer
from Caisse Desjardins for a credit facility of $7.2 million, the
proceeds of which will be used in part to finance the transaction with
Victhom.
This is not an invitation to purchase securities listed on TSX Venture
Exchange. TMX Group and its affiliates do not endorse or recommend the
referenced securities. Please seek professional advice to evaluate
specific securities.
Forward-Looking Statements
This press release contains forward-looking statements relating to the
proposed acquisition of Victhom. Statements based on Ergoresearch's,
the Purchaser's and Victhom's management's current expectations contain
known and unknown inherent risks and uncertainties and no assurance can
be given that potential future results or circumstances will be
achieved or will occur. The reader should not place undue faith in
forward-looking information. Management disclaims any intention or
obligation to update or revise any forward-looking statements whether
as a result of new information, future events or circumstances.
About Ergoresearch
Ergoresearch has developed Quebec's leading network of orthotics
clinics, with over 100 corporate and satellite centres under the
Clinique du pied Équilibre, Orthoconcept, Podotech and Laboratoire
Langelier banners. The leading manufacturer of "intelligent" foot
orthotics and specialty orthotics, it is a trend-setter in creating
durable medical equipment and software for the orthopedics market.
Ergoresearch has developed and commercialized Expert-Fit™, the first
robotized custom-fit orthotics manufacturing software program, launched
the first Living Lab in Canada and more recently, a new generation of
world-patented orthotic device called the OdrA, that revolutionizes the
treatment of pain associated with knee osteoarthritis. Ergoresearch Ltd
is listed on the Toronto Stock Exchange (TSXV) under the symbol ERG.
About Victhom
Victhom is a company which owns patents in the field of orthotics and
prosthetics ("O&P"), including intellectual property used in the POWER
KNEE, the world's first and only motor-powered prosthesis for
above-knee amputees, a product distributed under license agreement by
Ossur, a global leader in the O&P market. The Company also has a
royalty agreement related to the Neurostep® System and neuromodulation
products in other indications (sleep apnea and epilepsy) using the
Neurobionix technology platform under development by Neurostream
Technologies, a General Partnership now owned by Otto Bock, a global
leader in the O&P market.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Ergoresearch Ltd
