Chemtrade Urges Canexus Board to Engage in Discussions Prior to Completing Its Proposed Note
Offering
TORONTO, Sept. 14, 2016 /CNW/ - Chemtrade Logistics Income Fund
(TSX: CHE.UN) ("Chemtrade" or the "Fund") announced today that on September 6, 2016 it
made a proposal to acquire Canexus Corporation (TSX:CUS) ("Canexus") for $1.45 per common share
in cash. This represents approximately an 18% premium to yesterday's closing price of Canexus common shares of $1.23 and a multiple of Adjusted Cash Operating Profit ("ACOP") of 8.3x based on the mid-point of Canexus' 2016
ACOP guidance range of $100 to $110 million. On September 12,
2016, Canexus summarily rejected Chemtrade's proposal without engaging in any discussions with Chemtrade, and subsequently
announced its intention to complete a $75 million note offering on September
13, 2016. The note offering, if completed, includes terms that would negatively impact Canexus shareholder value on an
acquisition of Canexus.
Chemtrade has done substantial due diligence on Canexus as part of the previous Canexus sale process and is prepared to complete
a transaction expeditiously. If Canexus does not proceed with the note offering and chooses to engage with Chemtrade and
permit limited confirmatory due diligence, Chemtrade may be prepared to increase the amount offered to Canexus
shareholders.
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "We are disappointed that
Canexus has refused to engage with Chemtrade. We are confident that the combination of the two companies would result in a
stronger more diverse business and benefit all stakeholders. We encourage the Canexus board to engage in discussions
with Chemtrade so that we can quickly complete a transaction."
Chemtrade has retained BMO Capital Markets as its financial advisor and Osler, Hoskin &
Harcourt LLP as its legal counsel.
About Chemtrade
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's
largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur
dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of
sulphur, sodium chlorate, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as
processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information within the meaning of certain
securities laws, including the Securities Act (Ontario). Forward-looking information can be
generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may",
"will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking information in this news
release includes statements respecting Chemtrade's proposal to acquire Canexus, including the benefits, results effects and timing
of any such transaction; the price at which a transaction may be completed, if at all, the expected future financial position
and results of operation resulting from a combination of Chemtrade and Canexus and any benefits therefrom.Forward-looking
statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements
are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without
limitation: the ultimate outcome of any possible transaction between Chemtrade and Canexus, including the possibility that Canexus
will not accept a transaction with Chemtrade or enter into discussions regarding a possible transaction, the ultimate outcome and
results of integrating the operations of Chemtrade and Canexus if a transaction is consummated, the ability to obtain regulatory
approvals and meet other closing conditions to any possible transaction, including any necessary shareholder approvals, potential
adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the proposed
transaction, competitive responses to the announcement or completion of the proposed transaction, costs and difficulties
related to the integration of Canexus' businesses and operations with Chemtrade's businesses and operations, the inability to
obtain, or delays in obtaining, cost savings and synergies from the proposed transaction, uncertainties as to whether the
completion of the proposed transaction or any transaction will have the accretive effect on Chemtrade's earnings or cash flows that
it expects, unexpected costs, liabilities, charges or expenses resulting from the proposed transaction, litigation relating
to the proposed transaction, the inability to retain key personnel, any changes in general economic and/or industry-specific
conditions, as well as the risks and uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual
Information Form and the "Risks and Uncertainties" section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they
are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements,
and they should not be unduly relied upon.
The Fund disclaims any intention or obligation to update any forward-looking information even if new information becomes
available, as a result of future events or for any other reason, except as required by law. The forward-looking information
contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities
regulatory authorities, available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund
