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TORONTO, May 14, 2014 /CNW/ - Further to its press release of March 12,
2014 (the "March 12 Press Release") relating to the proposed acquisition (the "Acquisition") by Westaim HIIG Limited Partnership (the "Partnership") of a significant interest in Houston International Insurance Group,
Ltd. ("HIIG"), an international specialty insurance company headquartered in Houston
with offices in Atlanta, Birmingham, Chicago and Morristown, The
Westaim Corporation ("Westaim" or the "Company") (TSXV: "WED") announced today that the Partnership has agreed to
purchase from treasury an additional US$25 million of shares of common
stock of HIIG at a valuation of 100% of HIIG's Adjusted Stockholders'
Equity as at December 31, 2013 on a per share basis (the "Supplemental Treasury Purchase"). The Supplemental Treasury Purchase is expected to be funded as to
(i) US$16.8 million by Westaim and (ii) as to US$8.2 million by certain of the other parties that previously provided equity
commitment letters to the Partnership in connection with the
Acquisition, including affiliates of Catlin and Everest.
Capitalized terms used but not otherwise defined in this press release
shall have the meanings ascribed thereto in the March 12 Press Release.
The Supplemental Treasury Purchase is contingent on the closing of the
Acquisition. Following completion of the Acquisition and the
Supplemental Treasury Purchase, the Partnership is expected to have
acquired approximately 70.8% of HIIG for approximately US$139 million.
Update Regarding Proposed Acquisition and Additional Information re HIIG
Proposed Concurrent Closing of Initial Acquisition and Second
Acquisition
As announced on April 23, 2014, Westaim raised an aggregate of
$135,137,770 through the private placement issuance of an aggregate of
50,995,385 subscription receipts at an issuance price of $2.65 per
subscription receipt (the "Equity Financing"). The net proceeds of the Equity Financing are being held in escrow
pending satisfaction of certain escrow release conditions, including
the satisfaction of all conditions required to complete the Acquisition
(other than payment of the purchase price therefor and such other
procedural conditions that are customarily fulfilled immediately prior
to the closing of a transaction in the nature of the Acquisition).
The Company will use a portion of the proceeds from the Equity Financing
to purchase Class A Limited Partnership Units in the Partnership to
enable the Partnership (together with funds committed by other
investors in the Partnership) to satisfy the cash consideration payable
by the Partnership in connection with the Initial Acquisition and the
Second Acquisition. Given completion of the Equity Financing (which was
a condition of closing of the Second Acquisition in favour of the
Partnership), both the Initial Acquisition and the Second Acquisition
are now expected to close concurrently in Q2 of 2014 with the
Supplemental Treasury Purchase expected to be completed immediately
thereafter.
Update on Regulatory Approvals
Pursuant to the terms and conditions of the Initial Secondary Purchase
Agreement, the subscription agreement between the Partnership and HIIG
dated March 12, 2014 and the Second Acquisition Purchase Agreement, the
Acquisition is subject to a number of closing conditions, including
those summarized in the material change report of Westaim dated March
17, 2014 (the "Material Change Report"). Copies of the Material Change Report and each of the foregoing
agreements are available on SEDAR (www.sedar.com) under Westaim's profile.
In particular, the Acquisition is subject to the receipt of all
requisite approvals, including TSXV Venture Exchange approval and any
other regulatory approvals required under applicable U.S. competition
and insurance laws, including approval under the United States
Hart-Scott-Rodino Act ("HSR Act") and approval of the Departments of Insurance of the States of Texas
and Oklahoma.
In this regard, Westaim is pleased to announce that it has received
notice of early termination of the waiting period under the HSR Act in
connection with the Acquisition. The regulatory review process with
respect to all other requisite regulatory approvals is currently in
progress and is expected to be completed in Q2 of 2014.
About Westaim
Westaim is a publicly traded Canadian-based investment company that
invests directly and indirectly through acquisitions, joint ventures
and other arrangements, with the objective of providing its
shareholders with capital appreciation and real wealth preservation.
Westaim's strategy is to pursue investment opportunities with a focus
towards the financial services industry and grow shareholder value (as
measured by book value per share) at above average rates over the
long-term.
Neither the TSXV nor its Regulation Services Provider (as that term is
defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
Certain portions of this press release as well as other public
statements by Westaim contain forward-looking statements. Such
forward-looking statements include but are not limited to statements
concerning the investment strategies and expected rates of return; and
strategic alternatives to maximize value for shareholders. These
statements are based on current expectations that are subject to risks,
uncertainties and assumptions and Westaim can give no assurance that
these expectations are correct. Westaim's actual results could differ
materially from those anticipated by forward-looking statements for
various reasons generally beyond our control, including but not limited
to: (i) our ability to satisfy the escrow release conditions under the
Equity Financing, (ii) our ability to complete the Acquisition (or any
portion thereof) or the Supplemental Treasury Purchase on the terms
described herein or at all, (iii) changes in market conditions or
deterioration in underlying investments; (iv) general economic, market,
financing, regulatory and industry developments and conditions; (v)
other risk factors set forth in Westaim's 2013 Annual Report, quarterly
reports or annual information form. Westaim disclaims any intention or
obligation to revise forward-looking statements whether as a result of
new information, future developments or otherwise except as required by
law. All forward-looking statements are expressly qualified in their
entirety by this cautionary statement.
SOURCE Westaim Corporation
