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Montreal and Toronto, August 21, 2007 –
Transcontinental Inc. and PLM Group Ltd. today announced that
Transcontinental has agreed to make a takeover bid to the
shareholders of PLM, Canada’s fourth-largest printer.
PLM has 470 employees in four facilities in the Greater Toronto
Area. In 2006, it reported revenues of $126 million.
Transcontinental is making an all-cash offer
to acquire all of PLM’s approximately 29.5 million
shares outstanding, on a fully diluted basis, at C$3.50 per
share, for a total enterprise value of $130 million including
debt. Transcontinental and PLM have signed a Support Agreement
pursuant to which the PLM Board of Directors has unanimously
agreed to recommend that shareholders accept the offer of
Transcontinental. Barry N. Pike, founder and Chairman of the
Board and Chief Executive Officer of PLM, and Pike Holdings
Inc., a holding company controlled by Mr. Pike, which combined
hold approximately 51.2% of the shares outstanding, have signed
a hard Lock-Up Agreement pursuant to which they have agreed
to tender the shares they hold and accept the offer of Transcontinental.
The PLM Board of Directors has received an
opinion from the financial advisor to the PLM Board of Directors
and Special Committee that Transcontinental’s offer
is fair to PLM shareholders from a financial point of view.
The PLM Board of Directors, after consultation with its financial
and outside advisors, has determined that the price per-share
is fair and in the best interests of the Corporation and its
shareholders, and is recommending that PLM shareholders accept
the offer of Transcontinental. Transcontinental’s offer
represents a premium of 19% over the closing price of PLM
shares on the TSX on August 13, 2007, the day before PLM announced
that it was in exclusive talks with a potential buyer, and
25% over the closing price of PLM shares on the TSX yesterday,
August 20, 2007.
Transcontinental’s offer is subject to
certain usual conditions, including the deposit of 66 2/3%
of shares outstanding and obtaining regulatory approvals.
The Support Agreement calls for the payment of a break fee
in certain situations, namely if the PLM Board of Directors
changes its recommendation in favour of a competing offer.
The transaction is expected to close in October 2007.
In the next few weeks Transcontinental will
be sending PLM shareholders a takeover bid circular. During
that same period, the PLM Board of Directors will be sending
its shareholders a circular that recommends, among other things,
acceptance of the offer of Transcontinental.
Founded in 1987, PLM is a fast-growing company
that has skillfully anticipated the new marketing needs of
major financial institutions, retailers and publishers. Its
primary niche is direct marketing products and services, which
are increasingly in demand by businesses. PLM also offers
leading edge services such as premedia and digital printing
and prints a wide range of marketing-related commercial printing
products. PLM boasts state-of-the-art equipment and a diversified
customer base that includes many leading companies. PLM shares
have been listed on the TSX under the ticker symbol TSX: PGL
since 1997.
“PLM is regarded highly by businesses,
marketing firms and advertising agencies in Canada,”
said Luc Desjardins, President and CEO of Transcontinental.
“With PLM, we will become a leader in Canada’s
direct marketing industry, a fast-growing segment where Transcontinental
is already a major player in the United States; PLM will also
complement our product and service offering in the Greater
Toronto Area. PLM brings Transcontinental a dynamic sales
force, which will augment cross-selling opportunities. We’re
looking forward to welcoming our future partners and colleagues
to the Transcontinental family and continuing to grow together.”
Barry N. Pike said: “This transaction
provides outstanding value for the shareholders of PLM and
reflects the true value of the company we have built together
over the past 19 years. PLM has built a reputation for providing
leading edge technology for its customers and backing it up
with the best customer support in the industry. As an integral
part of the direct mail segment of Transcontinental, PLM will
continue to provide these same services and will have the
resources required to expand in the future to meet the future
growing needs of its customers in this dynamic and expanding
segment of the print market.”
Additional Information
Transcontinental will hold a conference call for the financial
community today at 10 a.m. (ET). The telephone numbers are
(416) 644-3416 or 1 800 731-6941. Media may hear the call
in listen-only mode or tune in to the simultaneous audio broadcast
on Transcontinental’s website at www.transcontinental.com,
which will be archived for 30 days. For interview requests
from the media, please contact the persons listed below.
About Transcontinental
The largest printer in Canada and sixth-largest in North America,
Transcontinental also ranks as the country’s leading
publisher of consumer magazines and French-language educational
resources, and its second-largest community newspaper publisher.
Transcontinental distinguishes itself by creating strategic
partnerships that integrate the company into its customers’
value chain, notably through its unique newspaper printing
outsourcing model and its value-added services. From mass
to highly personalized marketing, the company offers its clients
integrated solutions which include a continent-leading direct
marketing offering, a diverse digital platform and a door-to-door
advertising material distribution network. Transcontinental
is a company whose values, including respect, innovation and
integrity, are central to its operation. Transcontinental
(TSX: TCL.A, TCL.B) has more than 14,500 employees in Canada,
the United States and Mexico, and reported revenues of C$2.3
billion in 2006.
About PLM
PLM Group Ltd. (TSX: PGL) is one of Canada’s largest
commercial printers providing single source web and sheet-fed
print, visual, graphics and display services to leading companies
in a number of industries, including retail, consumer products,
financial services, automotive, pharmaceutical, healthcare
and communications. Visit the Company’s web site at
www.plmgroup.com.
Note: This press release contains
certain forward-looking statements concerning the completion
of the transaction and the future performance of Transcontinental
and PLM. Such statements, based on the current expectations
of management, inherently involve numerous risks and uncertainties,
known and unknown. Readers are cautioned that all forward-looking
information is inherently uncertain and actual results may
differ materially from the assumptions, estimates or expectations
reflected or contained in the forward-looking information,
and that actual future performance will be affected by a number
of factors, many of which are beyond each of Transcontinental
and PLM’s control, including, but not limited to, the
economic situation, regulatory approvals, exchange rates,
energy costs, increased competition, each of Transcontinental
and PLM’s capacities to implement their strategic plans
and Transcontinental’s ability to efficiently integrate
the business of PLM into its own business. The risks, uncertainties
and other factors that could influence actual results are
described in each of Transcontinental and PLM’s Management’s
Discussion and Analyses and Annual Information Forms.
The forward-looking information in this release
is based on current expectations and information available
as of August 21, 2007. Transcontinental and PLM disclaim any
intention or obligation to update or revise any forward-looking
statements unless otherwise required by the Securities Authorities.
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For information:
Media
Nessa Prendergast
Director, Media Relations
Transcontinental Inc.
Telephone: (514) 954 2809
nessa.prendergast@transcontinental.ca
David J. Stuart
President and C.O.O.
PLM Group Ltd.
Telephone: (416) 848-8520
www.plmgroup.com
Financial Community
Jennifer F. McCaughey
Director, Investor Relations
Transcontinental Inc.
Telephone: (514) 954 2821
jennifer.mccaughey@transcontinental.ca
Peter A. Bradley, C.A.
Executive Vice President and Chief Financial Officer
PLM Group Ltd.
Telephone: (416) 848-8530
pbradley@plmgroup.com
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