Polaris Materials has announced that is has filed its Management Information Circular and related proxy materials on SEDAR and on its website on the run up to the company’s meeting with security holders on 15th November 2017. The purpose of the meeting is to seek approval of the proposed plan of arrangement (the “U.S. Concrete Arrangement”) with U.S. Concrete, Inc. (“U.S. Concrete”), which was previously announced on September 29, 2017.
The U.S. Concrete Arrangement Agreement
Polaris entered into a definitive arrangement agreement (the “U.S. Concrete Arrangement Agreement”) with U.S. Concrete and a wholly-owned subsidiary of U.S. Concrete in respect of the U.S. Concrete Arrangement which provides for the purchase by such U.S. Concrete subsidiary of all issued and outstanding common shares of Polaris (the “Polaris Shares”) for a cash price of C$3.40 per Polaris Share as well as payments for in-the-money options and deferred share units of Polaris. If approved, the U.S. Concrete Arrangement is expected to become effective in mid-November 2017, subject to customary closing conditions, following which time the Polaris Shares are anticipated to be delisted from the Toronto Stock Exchange (the “TSX”).
The U.S. Concrete Arrangement Agreement was entered into subsequent to the termination of an arrangement agreement among the Company, Vulcan Materials Company (“Vulcan”) and an indirect wholly-owned subsidiary of Vulcan, dated August 25, 2017 (the “Vulcan Arrangement Agreement”). The Company’s special meeting of securityholders initially scheduled for October 20, 2017 to consider the arrangement contemplated by the Vulcan Arrangement Agreement (the “Vulcan Arrangement”) has also been cancelled.
Securityholder Approval
Holders of Polaris Shares of record as of October 10, 2017, as well as holders of record of options and deferred units of Polaris (the “Affected Securityholders”), will receive notice of and be entitled to vote at the Special Meeting. The U.S. Concrete Arrangement will require the approval at the Special Meeting of 66 2/3% of all votes cast by holders of Polaris Shares, 66 2/3% of all votes cast by the Affected Securityholders voting as a single class and a majority of all votes cast by holders of Polaris Shares after excluding votes of any persons whose votes must be excluded in accordance with Multilateral Instrument 61-101 – Protection of Minor Security Holders in Special Transactions.
Highlights of the U.S. Concrete Arrangement include:
• The consideration of $3.40 per Polaris Share (the “Consideration”) represents a 254% premium to Polaris' closing share price of $0.96 on August 25, 2017, the final trading day prior to the announcement of the now terminated Vulcan Arrangement Agreement, and a 258% premium to the volume weighted average price of Polaris Shares over the 10 trading days prior to August 25, 2017. The Consideration also represents a 22% premium to the C$2.79 per Company Share consideration offered under the Vulcan Arrangement.
• The Consideration is all cash, which provides certainty of value, and is not subject to the risks associated with the business of Polaris;
• The Consideration is the result of the completion of a formal sale process, including soliciting interest from five strategic parties, the entering into of the Vulcan Arrangement Agreement and a subsequent “Superior Proposal” from U.S. Concrete. The initial sale process resulted in proposals from three parties, from which the Vulcan Arrangement emerged as the preferred transaction. Following entering into the Vulcan Arrangement Agreement, the Company received an acquisition proposal contemplating the U.S. Concrete Arrangement from U.S. Concrete, which, following consultation with its advisors, the Board of Directors of the Company determined was a “Superior Proposal” as defined in the Vulcan Arrangement Agreement. Following the expiry of the five day right to match provided to Vulcan, the Company subsequently terminated the Vulcan Arrangement Agreement in accordance with its terms and entered into the U.S. Concrete Arrangement Agreement. The Board of Directors of the Company believes that the Consideration represents the highest consideration reasonably attainable and is fair to the the shareholders and securityholders of Polaris and that the U.S. Concrete Arrangement is in the best interests of Polaris, and believes that the Arrangement is equitable and fair to its First Nations partners and stakeholders;
• The terms of the U.S. Concrete Arrangement are the result of a comprehensive negotiation process, undertaken with the oversight and participation of the independent Special Committee of Polaris and its legal counsel and financial advisors, and the terms of the U.S. Concrete Arrangement are fair in the judgment of the Special Committee to the shareholders and securityholders of Polaris; and
• The Board of Directors of the Company believes that the likelihood of the completion of the U.S. Concrete Arrangement is reasonable and is not subject to any financing condition.
