TORONTO, Jan. 20, 2015 /CNW/ - Wheels Group Inc.
("Wheels" or the "Company") (TSXV: WGI) today announced that it
has entered into an arrangement agreement (the "Arrangement
Agreement") with Radiant Logistics, Inc. ("Radiant")
(NYSE MKT: RLGT) and its wholly-owned subsidiary, Radiant Global
Logistics ULC (the "Purchaser"), pursuant to which the
Purchaser has agreed, subject to the terms and conditions of the
Arrangement Agreement, including approval by the shareholders of
Wheels, to acquire all of the outstanding common shares of Wheels
by way of a court-approved arrangement (the "Arrangement").
Pursuant to the Arrangement, the shareholders of the Company are
entitled to receive consideration of CAD$0.77 per common share (the
"Consideration"). The shareholders of the Company may
elect to receive as consideration cash and/or shares of common
stock of Radiant ("Radiant Shares"), subject to the
restriction noted below. The Arrangement is expected to close early
in the second calendar quarter of 2015, subject to regulatory and
court approval, Wheels' shareholder approval and other customary
closing conditions, as more particularly described in the
Arrangement Agreement.
For the purposes of determining the consideration payable to
holders of common shares of the Company, each Radiant Share will be
valued at USD$4.25, and each
common share of the Company will entitle the holder thereof
to elect to receive either CAD$0.77 in cash or 0.151384 of a Radiant
Share. If the holders of common shares of the Company elect
to receive, in the aggregate, greater than 6,900,000 Radiant
Shares, the number of Radiant Shares will be prorated among the
Wheels shareholders electing to receive Radiant Shares and the
balance of the consideration will be paid in cash. Notwithstanding
the foregoing, all minority shareholders of Wheels (being all
shareholders other than the Locked-up Securityholders (as defined
below)) shall be afforded the right to elect to receive (i) all of
their consideration in cash, (ii) all of their consideration in the
form of Radiant Shares, or (iii) any combination of cash and
Radiant Shares.
The Consideration represents a 27.6% premium to the 20-day
volume weighted average price of the common shares of Wheels on the
TSX Venture Exchange ("TSXV") as of January 19, 2015 and a 35.1% premium to the
closing price of the Wheels' common shares on the TSXV, immediately
prior to the announcement of the Arrangement.
In connection with financing the Arrangement, Radiant has
obtained commitment letters with each of Bank of America N.A.,
Alcentra Capital Corporation, Triangle Capital Corporation and
Integrated Private Debt Fund IV LP.
"Combining with Radiant is an exciting opportunity to accelerate
Wheels' growth plans," said Doug
Tozer, Chief Executive Officer of Wheels. "The two companies
share the same vision and provide complimentary services, which
will be leveraged to expand operational capabilities and geographic
reach. We have a deep respect for the Radiant team, and it is clear
that they share our commitment to maintaining the exceptional
service Wheels' customers expect. I'm proud of the Company that our
team has built and look forward to Wheels' continued growth working
with the Radiant team."
Radiant has also entered into voting and lock-up agreements with
certain of the Company's directors and officers as well as with
certain shareholders of the Company (collectively, the
"Locked-up Securityholders") who, in the aggregate, own
69,620,288 common shares, representing approximately 77.7% of the
outstanding common shares of the Company. Pursuant to the
voting and lock-up agreements, the Locked-up Securityholders have
agreed to vote their Company common shares in favour of the
Arrangement and elected to receive approximately 4.5 million
Radiant Shares, representing approximately CAD$23.0 million of the approximate CAD$69.0 million market value of Wheels reflected
in the Consideration, subject to reduction as described
above.
The Arrangement Agreement contains customary deal protection
provisions, including non-solicitation, superior proposal and
right-to-match provisions in favour of Radiant and the payment to
Radiant of a termination fee of USD$3.6
million together with an additional amount on account of
Radiant's costs and expenses in connection with pursuing the
Arrangement (up to a maximum of USD$1.0
million) if the acquisition is not completed in certain
specified circumstances. In certain circumstances where the
Arrangement is not completed, as described in the Arrangement
Agreement, Radiant has agreed to pay the Company's costs and
expenses up to a maximum of USD$1.0
million.
The board of directors of Wheels, on the recommendation of the
independent special committee, has approved the Arrangement
Agreement and recommends that the Company's shareholders vote in
favour of the Arrangement at a meeting of the Company's
shareholders to be called. The board of directors of Radiant has
also approved the Arrangement.
Cormark Securities Inc. has rendered a fairness opinion in
connection with the Arrangement to the board of directors of
Wheels. Bennett Jones LLP and Katten Muchin Rosenman LLP are
acting as legal counsel to Wheels. Fox Rothschild LLP and
Norton Rose LLP are acting as legal counsel to Radiant.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Full details of the Arrangement will be included in the
management information circular to be filed on SEDAR and mailed to
shareholders of Wheels.
About Wheels Group Inc.
Founded in 1988, Wheels is a leading North American third party
logistics ("3PL") supply chain logistics provider. As a
non-asset provider, the Company develops advanced supply chain
solutions delivered through its qualified partner network of over
6,000 truck, rail, air and ocean carriers. Wheels serves
consumer goods, food and beverage, manufacturing and retail clients
through 18 offices throughout the United
States and Canada. Wheels has been named one of
Canada's Best Managed Companies
since 1997, Platinum since 2003, one of North America's Top 100 3PL Companies and one
of the Top 100 Food 3PLs.
About Radiant Logistics, Inc.
Radiant (www.radiantdelivers.com) is a non-asset based
transportation and logistics company providing domestic and
international freight forwarding services and an expanding array of
value-added solutions, including customs and property brokerage,
order fulfillment, inventory management and warehousing. Radiant
operates through a network of company-owned and independent agent
offices across North America under
the Radiant, Airgroup, Adcom, DBA and On Time network brands
servicing a diversified account base, including manufacturers,
distributors and retailers using a network of independent carriers
and international agents positioned strategically around the
world.
Forward-Looking Information
The information in this document has been prepared as at
January 20, 2015. Certain
statements contained in this news release constitute
forward-looking statements within the meaning of certain securities
laws, including the Securities Act (Ontario). Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by words such as "anticipate", "continue",
"estimate", "expect", "expected", "intend", "may", "will",
"project", "plan", "should", "believe" and similar expressions
(including negative variations), or that events or conditions
"will", "would", "may", "could" or "should" occur, including
without limitation, that all conditions precedent to the
Arrangement will be met and the realization of the anticipated
benefits deriving therefrom to shareholders of the Company, the
view on the potential assets of Radiant, the Consideration offered
to the shareholders of the Company, the timing and closing of the
transactions contemplated by the Arrangement, the synergies
resulting from the Arrangement, the potential of the continuing
company following the completion of the Arrangement, and that the
Arrangement may not close due to one or more conditions in the
Arrangement Agreement not being satisfied or the Arrangement
Agreement otherwise being terminated. A copy of the Arrangement
Agreement is available on SEDAR at www.sedar.com under the issuer
profile of Wheels.
Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements involve known and unknown risks, uncertainties and
other factors and are not guarantees of future performance and
actual results may accordingly differ materially from those in
forward-looking statements. Factors that could cause the
actual results to differ materially from those in forward-looking
statements include, without limitation, fluctuations in the value
of the Canadian dollar relative to the U.S. dollar, financing of
additional capital requirements by Radiant to complete the
Arrangement, governmental and environmental regulation and the
volatility of the price of Radiant Shares. For a more detailed
discussion of the risks and other factors that may affect the
Company's ability to achieve the expectations set-forth in the
forward-looking statements contained in this press release, see the
Company's most recent Management's Discussion and Analysis filed on
SEDAR at www.sedar.com under the issuer profile of Wheels, as well
as the Company's other filings with the Canadian securities
regulators.
The Company disclaims any intention or obligation to update any
forward-looking statement, even if new information becomes
available, as a result of future events or for any other reason.
The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement.
None of the Radiant Shares to be issued pursuant to the
Arrangement Agreement have been or will be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any
securities issued in the Arrangement are anticipated to be issued
in reliance upon the exemptions from such registration requirements
pursuant to Section 3(a)(10) of the U.S. Securities Act and
applicable exemptions under state securities laws. This press
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities.
SOURCE Wheels Group Inc.