Posts Tagged ‘Pacific Safety Products’

Med-Eng Holdings ULC to Acquire Pacific Safety Products Inc. for $0.21 Per Common Share in All-Cash Transaction

Friday, November 11th, 2016

ARNPRIOR, ONTARIO–(Marketwired – Nov. 10, 2016) – Pacific Safety Products Inc. (TSX VENTURE:PSP) (“PSP” or the “Company”) announced today that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Med-Eng Holdings ULC (the “Buyer”), a Canadian wholly owned subsidiary of Safariland, LLC (“Safariland”), under which the Buyer will acquire all of the outstanding common shares of PSP for $0.21 per share in cash.

The purchase price represents a premium of approximately 23.5% to the closing price of PSP’s common shares on the TSX Venture Exchange on November 9, 2016 and a premium of approximately 25.9% to PSP’s volume weighted average share price for the twenty trading days ending November 9, 2016.

The transaction, which will be completed by way of a plan of arrangement (the “Arrangement”) under the Canada Business Corporations Act, is expected to close in December 2016. Completion of the Arrangement is subject to customary closing conditions, including court approval, TSX Venture Exchange approval, as well as the approval of two-thirds of the votes cast on the Arrangement resolution by shareholders present in person or represented by proxy, voting as a single class (with each PSP shareholder being entitled to one vote for each common share held), at an annual and special meeting of shareholders of PSP (the “PSP Meeting”) scheduled to be held on Monday, December 19, 2016 to, among other things, consider and vote upon the Arrangement.

The Board of Directors of PSP, after consultation with its financial and legal advisors, has determined that the Arrangement is fair to the shareholders of PSP and is in the best interest of PSP and accordingly has approved the Arrangement Agreement and the making of a recommendation that shareholders of PSP vote in favour of the Arrangement resolution at the PSP Meeting. Echelon Wealth Partners Inc., financial advisor to the Board of PSP, has provided an opinion to the Board of Directors, based upon and subject to certain assumptions, that the consideration being offered by the Buyer pursuant to the Arrangement is fair, from a financial point of view, to the shareholders of PSP. A copy of Echelon’s opinion will be included in the management information circular to be prepared and mailed in connection with the PSP Meeting.

Shareholders, including the directors and officers of PSP, who in the aggregate beneficially own approximately 21.7% of the outstanding common shares of PSP, have agreed, pursuant to support agreements and subject to certain exceptions, to vote their shares in favour of the Arrangement at the PSP Meeting.

Under the Arrangement, Buyer will also acquire the common shares of PSP issued upon conversion of outstanding convertible debentures in the aggregate principal amount of $749,000, which are convertible at a price of $0.15 per common share. In addition, each stock option of the Company outstanding immediately prior to the effective time of the Arrangement will be cancelled in exchange for a cash payment equal to the amount by which the consideration per common share payable pursuant to the Arrangement exceeds the exercise price of such option. Total cash consideration of approximately $15.4 million will be paid for PSP’s common shares, convertible debentures and stock options.

The Arrangement Agreement includes covenants of PSP typical for a transaction of this nature, including with respect to non-solicitation, a right granted to Buyer to match any superior proposal for PSP and a provision entitling PSP to a “fiduciary-out”. In addition, PSP has agreed to pay a termination fee of $780,000 to Buyer upon the occurrence of certain events, including if PSP pursues a superior proposal, as well as an expense reimbursement fee upon a termination of the Arrangement Agreement in certain circumstances. The Arrangement Agreement is subject to customary termination rights, including termination at either party’s option if the Arrangement has not been completed by February 19, 2017.

In connection with the PSP Meeting, a management information circular of PSP providing details of the Arrangement as well as the rationale for the support of the Arrangement by PSP’s Board of Directors will be prepared and mailed to shareholders over the coming weeks. A copy of the Arrangement Agreement, the management information circular and the support agreements will be available on PSP’s SEDAR profile at

Echelon Wealth Partners Inc. and ZED Financial Partners are acting as financial advisors to the Board of Directors of PSP. Wildeboer Dellelce LLP is acting as counsel to PSP. Blake, Cassels & Graydon LLP is acting as legal counsel to the Buyer.

Pacific Safety Products – Always A Bridesmaid, Never a Bride

Wednesday, May 16th, 2012

We’ve mentioned various takeovers concerning Canadian armor producer Pacific Safety Products in the past including their recent announcement of a reverse takeover bid for Armor Works Canada. Unfortunately, it looks like that one fell through as well according to a press release on PSP’s website. It states, “that the letter of intent with ArmorWorks Enterprises LLC to acquire all of the issued and outstanding shares of ArmorWorks Enterprises Canada, ULC in a reverse take-over transaction (the “Transaction”) has been terminated.” Additionally, the release says, “The board of directors of the Company has exercised its option to terminate the Company’s contract with its Executive Chairman, Daniel Marks, upon 30 day’s notice.” They are also working to “create a separation between the Chief Executive Officer and Chief Financial Officer roles…”

Looks like PSP is getting their house in order.

Pacific Safety Products Inc Signs Letter of Intent for Proposed Reverse Take-Over Transaction With ArmorWorks Enterprises Canada, ULC

Wednesday, April 25th, 2012

If you’ve followed Pacific Safety Products over the past few years, you know that they have had a couple of on-again, off-again arrangements with Revision, Sun Capital, and other unnamed companies to purchase all or part of their company.

Last week, PSP announced that it has entered into a Letter of Intent (“LOI”) dated April 17, 2012 with ArmorWorks Enterprises LLC (“AWE”) to acquire all of the issued and outstanding shares of ArmorWorks Enterprises Canada, ULC (“AW Canada”) in a reverse take-over transaction.

PSP has been working with ArmorWorks (AWE) since 2004. According to a PSP press release, “AW Canada was founded in 2009 as an indirectly owned subsidiary of AWE and is an unlimited liability company existing under the laws of British Columbia. AWE is a limited liability company existing under the laws of Arizona and is indirectly controlled by William J. Perciballi of Phoenix, Arizona. AWE is a leading provider of advanced survivability products to military and law enforcement agencies worldwide since 1996.”

The Canadian press estimates that the deal may well be worth $15 Million.

Ok, so PSP, who has had a rough time of it trying to get someone to buy them, is going to scrape together $15 Million (Canadian press estimate) to buyout AW Canada which posted a $2.1 Million loss last year. Ok, got that.

Now is the interesting part. In their own quarterly statement from earlier this year, PSP reported, “On January 23, 2012, the Company announced that it has entered into a letter of intent (“LOI”) to sell substantially all of its assets on a cash-free, debt-free basis (the “Sale Transaction”). During an exclusivity period, the potential purchaser is completing a due diligence review, and the parties are endeavoring to negotiate a mutually satisfactory definitive purchase agreement.

The completion of the proposed Sale Transaction is subject to a number of conditions, including completion of satisfactory due diligence, execution of the definitive purchase agreement, and TSX Venture Exchange and shareholder approval. There can be no assurance that the Sale Transaction will be completed as proposed or at all or, if completed, that the net proceeds of the Sale Transaction would represent a premium to the current trading price of the Company’s securities.

That was a completely different deal with Sun Capital Partners and it didn’t happen. Here are a couple of other tidbits.

In the proposed Revision deal of 2010, the stock was to be purchased at $.18 per share. Over the last year, the stock has seen a high of $.11 and a low of $.02 with it currently hovering around $.03 a share. Under this proposed deal, PSP is valuing their stock at a generous $.10 and plans to consolidate shares on a 10-to-1 basis, turning them into $1 shares.

Under the agreement, Perciballi who controls AWE and by extension AW Canada, is being bought out. Yet, he is getting a spot on the PSP board as well. Not shabby.

So you haven’t heard about all of this? It’s probably because the press release that outlines the deal was not supposed to be released to the United States. I guess they forgot that the Internet is global in nature.

All in all, it’s an interesting deal. Naturally, it’s all contingent on approval from the shareholders.

Revision Cancels Purchase of PSP’s Headborne Division

Wednesday, July 21st, 2010

Unfortunately, it looks like the deal for Revision to purchase Pacific Safety Products’ headborne system and helmet liner assets for $1,275,000 has been terminated by Revision. Under a Memorandum of Understanding, Revision had the right to terminate if the sale was not completed by July 15, 2010. However, all is not lost. PSP and Revision are continuing talks for a partial sale of PSP’s Headborne System.

PSP and Revision Terminate Arrangement

Friday, June 18th, 2010

In a press release issued earlier this week, Pacific Safety Products and Revision announced they have agreed to terminate the arrangement agreement made last month wherein Revision would pay Cdn $0.18 per share for PSP stock. PSP was unable to garner sufficient support among its shareholders to ratify the sale. PSP will reimburse Revision for $150,000 in transaction costs.

However, PSP has announced the sale of its headborne system assets to Revision for $1,275,000. Mr. David Scott, Chief Executive Officer of PSP stated: “The headborne program was established by PSP to develop new protection products for future market opportunities. To date the Company has made advances in the development of products; however, significant further investment is required in order to capitalize on these anticipated market opportunities. Given the state of the industry and the current economic conditions, the Company simply does not have the capital required to continue its headborne R&D program and Revision’s offer provides the Company with the opportunity to monetize this asset.” One example of the technologies developed by PSP is the Tactical Impact Protection System. Their headborne systems division is the crown jewel of PSP and will be a perfect addition to Revision which began their own headborne work over a year ago.