Québec investors and Marcel Dutil to take Manac private in $186 mln deal

Manac Inc (TSX: MA), a Canadian manufacturer of specialty trailers, has agreed to be bought by an investor group made up of Marcel Dutil, the company’s founder, the Caisse de dépôt et placement du Québec, Fonds de solidarité FTQInvestissement Québec and Fonds Manufacturier Québécois. The transaction values Manac at $186 million, including debt. The take-private acquisition follows a strategic review process launched in March. It will be put before shareholders by early October. U.S. private equity firm American Industrial Partners and other shareholders, including two members of the investor group, have agreed to vote their shares in favour. Founded in 1966, the company is based in Saint Georges, Québec.


Manac to be privatized by a group of Québec investors led by the Dutil family

SAINT-GEORGES, QC, Aug. 13, 2015 /CNW Telbec/ – Manac Inc. (TSX: MA) (“Manac” or the “Company”), a North American leader in the design and manufacture of specialty trailers, announced today that it has entered into a definitive arrangement agreement pursuant to which a consortium (the “Consortium”) composed of Placements CMI Inc. (“CMI”), Caisse de dépôt et placement du Québec (“CDPQ”), Fonds de solidarité FTQ (“FSTQ”), Investissement Québec (“IQ”) and Fonds Manufacturier Québécois II s.e.c. (“FMQ”) will acquire all of the issued and outstanding multiple voting shares (the “MVS”) and subordinate voting shares (the “SVS”, and, collectively with the MVS, the “Shares”) of the Company for $10.20 in cash per Share (the “Purchase Price”).

Key Transaction Highlights

Shareholders (other than CMI, CDPQ, FSTQ and LITUD Inc. (“LITUD”)) will receive $10.20 in cash per Share, representing a premium of approximately 18.4% to the average closing price of the SVS on Toronto Stock Exchange for the 20-day period prior to March 30, 2015, being the date on which the Company announced its strategic review process, and a premium of approximately 12.4% to the average closing price of the SVS on the Toronto Stock Exchange for the 20-day period prior to August 13, 2015.
Manac will maintain its head office and main production plant in the Province of Québec and continue to support its business relationships in Canada and the United States where it currently conducts operations.
The Consortium is composed of CMI, a holding company controlled by the Company’s founder Mr. Marcel Dutil, and four renowned Québec-based institutions, namely CDPQ, FSTQ, IQ and FMQ, two of which, CDPQ and FSTQ, are current shareholders of Manac.
Mr. Charles Dutil, the Company’s President and Chief Executive Officer, will roll over Shares held by his holding company, LITUD, and remain President and Chief Executive Officer and a director of Manac in connection with the proposed transaction.
The board of directors of Manac (the “Board of Directors”) unanimously recommends that holders of MVS and SVS (collectively, the “Shareholders”) vote in favour of the transaction.

The transaction represents a total enterprise value of approximately $186 million, including the assumption of existing indebtedness, for 100% of Manac.

The proposed transaction emerged from the strategic review process announced by the Company on March 30, 2015, and pursuant to which the Company contacted and was contacted by numerous potential financial and strategic purchasers from across North America and Europe. The process and negotiations of the transaction with the Consortium were supervised by a special committee of the Board of Directors composed solely of independent directors (the “Special Committee”). The transaction has been approved unanimously by the Board of Directors of Manac (with Mr. Charles Dutil abstaining from voting) following the unanimous recommendation of the Special Committee. Speaking on behalf of the Special Committee, Annie Thabet stated: “We are pleased with the culmination of the strategic review process and we are confident that the proposed transaction is favorable to Manac and its shareholders.”

Charles Dutil, President and Chief Executive Officer of the Company, said: “Reaching this conclusion is a great step for Manac, our employees and all of our business partners. We look forward to a long collaboration with this group of investors, most of which we have collaborated with in the past.”

The Board of Directors and the Special Committee have unanimously (with Mr. Charles Dutil abstaining from voting), after receiving legal and financial advice, determined that the transaction is in the best interests of Manac and is fair to its disinterested Shareholders. The Board of Directors unanimously recommends (with Mr. Charles Dutil abstaining from voting) that the Shareholders vote in favour of the transaction at the special meeting of Shareholders to be called to approve the transaction (the “Special Meeting”).

In connection with the proposed transaction, American Industrial Partners Capital Fund IV (Cayman) L.P., LITUD and each director and senior officer of the Company have agreed, together with members of the Consortium that are current Shareholders of the Company, to vote their Shares in favour of the transaction. Consequently, Shareholders holding 100% of the MVS and approximately 31.35% of the SVS (representing 80.62% of the total Shares), have agreed to vote their Shares in favour of the transaction.Under the transaction, Shares held by CMI, CDPQ, FSTQ and LITUD will be rolled over.

Fairness Opinions and Formal Valuation

MNP LLP (“MNP”), retained by the Special Committee as financial advisor and independent valuator, has provided an opinion to the effect that as at August 12, 2015, subject to the assumptions, qualifications and limitations provided therein, the consideration to be received by the disinterested Shareholders pursuant to the transaction is fair, from a financial point of view, to such Shareholders. MNP has also provided the Special Committee with a formal valuation completed under the supervision of the Special Committee. The formal valuation determined that as at August 12, 2015, and subject to the assumptions, limitations and qualifications contained therein, the fair market value of the Shares of the Company ranged from $9.27 to $10.40 per Share. The fairness opinion and the formal valuation will be included in the management information circular to be mailed to Shareholders in connection with the approval of the transaction.

Transaction Details

The transaction will be implemented by way of a statutory plan of arrangement under the Business Corporations Act (Québec) and is subject to court approval and to the approval of at least 662/3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, voting together as a single class, with each Shareholder being entitled to one vote per Share. Given that the proposed transaction constitutes a “business combination” under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions, it will also be subject to the majority approval of the disinterested Shareholders of the Company. Further details regarding the voting requirements applicable to the proposed transaction will be set out in the management information circular to be filed and mailed to Shareholders in connection with the transaction.

The arrangement agreement provides for a non-solicitation covenant on the part of the Company, subject to customary “fiduciary out” provisions. The arrangement agreement also provides the Consortium with a right to match. A termination fee of $3,800,000 would be payable to the Consortium in certain circumstances, including if the Consortium fails to exercise its right to match in the context of a superior proposal supported by the Company.

The Company intends to mail a management information circular in the upcoming weeks to its Shareholders and to hold the Special Meeting before October 7, 2015. Details of the terms of the transaction will be set out in the arrangement agreement and the management information circular which will be available under the profile of Manac at www.sedar.com.


MNP LLP acted as financial advisor and independent valuator to the Special Committee of Manac. Stifel acted as financial advisor to the Board of Directors of Manac. Stikeman Elliott LLP is Manac’s legal counsel and Norton Rose Fulbright Canada LLP is the Special Committee’s legal counsel. National Bank Financial Inc. is the financial advisor to the Consortium. Blake, Cassels & Graydon LLP acts as principal legal counsel to the Consortium, and Fasken Martineau DuMoulin LLP and Stein Monast LLP act as separate legal counsel for certain of its members.

About Manac Inc.

Manac is the largest manufacturer of trailers in Canada and a leader in the manufacturing of specialty trailers in North America. Manac offers a wide range of vans, flatbeds and specialty trailers such as dumps, low beds, grain hoppers, chassis, chip and logging trailers, all of which are sold in Canada and the United States under the recognized brands Manac®, CPS®, Peerless®, Darkwing®, UltraPlate®, UltravanTM and Liddell Canada®. Manac services the heavy-duty trailer industry for the highway transportation, construction, energy, mining, forestry and agricultural sectors and manufactures its trailers in facilities located in Saint-Georges, QC, Penticton, BC as well as Oran and Kennett, MO.

Forward looking statements

Certain statements set forth in this press release may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as “believe”, “could”, “should”, “intend”, “expect”, “estimate”, “assume” and other related expressions are used to identify such statements. These forward-looking statements include, but are not limited to, statements relating to Manac’s expectations with respect to the timing and outcome of the proposed transaction with the Consortium, the anticipated benefits of such transaction, court and Shareholder approvals, the ability of the parties to the arrangement agreement to complete the transaction and the anticipated timing of the Special Meeting. There can be no assurance that the proposed transaction will be completed, or that it will be completed on the terms and conditions contemplated in this press release. The proposed transaction could be modified or terminated. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Manac, which could in turn also impact the completion of transaction, are described in details in the reports filed from time to time by Manac with securities authorities in Canada.

The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. Unless otherwise required by applicable securities laws, Manac disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this news release is based on information available as of the date of the release.

SOURCE Manac Inc.

Charles Dutil, President and Chief Executive Officer, Manac Inc., Email: infomedia@manac-ir.com, Telephone: 418-228-2018

Photo courtesy of Manac Inc