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Press release from CNW Group

Kelso & Company to make recommended all-cash offer of C$0.38 per share for EACOM Timber Corporation

Friday, March 22, 2013

Kelso & Company to make recommended all-cash offer of C$0.38 per share for EACOM Timber Corporation11:52 EDT Friday, March 22, 2013Kelso & Company to make an all-cash offer for all the common shares of EACOM for C$0.38 per common share, representing a premium of approximately 46.2% to the closing price of the shares on March 21, 2013 and a premium of 63.7% to the 30-day volume weighted average price ("VWAP").EACOM's Board of Directors unanimously recommends that shareholders accept the Kelso offer.EACOM directors, senior executive officers and certain significant shareholders have entered into lock-up agreements, representing approximately 44% of the fully-diluted shares, with Kelso and have agreed to tender all of their common shares to the Kelso offer.MONTREAL and VANCOUVER, March 22, 2013 /CNW Telbec/ - EACOM Timber Corporation (TSXV: ETR) ("EACOM", or the "Company") and Kelso & Company jointly announce that Kelso & Company, through a wholly owned subsidiary ("Kelso") has agreed, subject to certain conditions, to make a take-over bid to acquire all of the common shares of EACOM for C$0.38 in cash per common share (the "Offer"). EACOM and Kelso have entered into a support agreement (the "Support Agreement") in connection with the Offer.The Offer represents a premium of 46.2% to EACOM's closing share price of C$0.26 on the TSX Venture Exchange on March 21, 2013 and a premium of 63.7% to the VWAP of the EACOM common shares for the 30-day period ending on that date."We are pleased with Kelso's offer, which recognizes the Company's inherent value. Kelso is extremely well capitalized and is in a position to provide the capital to implement EACOM's long term growth and mill modernization plan. We believe that the Offer is in the best interests of the Company and its stakeholders, including its shareholders and employees", said Terry Lyons, Chair of the Special Committee of the Board of Directors of EACOM.The Special Committee of the Board of Directors of EACOM, following review of the terms and conditions of the Offer and consideration of a number of factors unanimously recommended the Offer to EACOM's Board of Directors.  The Special Committee and the Board of Directors have received an opinion from each of Canaccord Genuity Corp. and Sanabe & Associates LLC that as of the date of the opinion and subject to the assumptions outlined therein, the consideration payable to EACOM shareholders under the transaction is fair, from a financial point of view.EACOM's Board of Directors, after receiving the recommendation of the Special Committee, has unanimously determined that the Offer is in the best interests of EACOM and its shareholders and unanimously recommends that shareholders accept the Offer.The directors and senior executive officers of EACOM, as well as certain significant securityholders of EACOM, have entered into lock-up agreements with Kelso and have agreed to tender all of their common shares (including common shares issuable upon the exercise of options and warrants) to the Offer. Common shares representing approximately 44% of the issued and outstanding EACOM common shares on a fully diluted basis are subject to the lock up agreements.The Support Agreement provides that the Board of Directors of EACOM may under certain circumstances terminate the Support Agreement in favour of an unsolicited superior proposal, subject to the payment of a break fee of C$7.0 million and subject to a right by Kelso to match such superior proposal.Full details of the Offer will be included in a take-over bid circular that is expected to be mailed to EACOM shareholders in the first week of April. The Offer will be open for a period of not less than 35 days and the Offer will be subject to certain customary conditions, including there having been validly deposited and not withdrawn at the expiry time of the Offer that number of EACOM common shares that constitutes at least 66⅔ per cent of the outstanding common shares of EACOM on a fully diluted basis and receipt of all required regulatory approvals. The Offer is not subject to any financing condition.About EACOMEACOM Timber Corporation is a TSX-V listed company. The business activities of EACOM consist of the manufacturing, marketing and distribution of lumber, wood chips and woodbased value-added products, and the management of forest resources. EACOM owns eight sawmills, all located in Eastern Canada, and related tenures. The mills are Timmins, Nairn Centre, Gogama, Elk Lake and Ear Falls in Ontario, and Val-d'Or, Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario and Ste-Marie, Quebec are currently idled. As a result of improved market conditions, operations in Val-d'Or and Matagami which had been temporarily shut down in 2011 resumed during the third quarter of 2012. The mill in Timmins was seriously damaged by fire in January 2012 and remains shut down. EACOM also owns a lumber remanufacturing facility in Val-d'Or, Quebec, and a 50% interest in an "I" joist plant in Sault Ste-Marie, Ontario.About KelsoKelso & Company is one of the oldest and most established firms specializing in private equity.  Since 1980, Kelso has invested in over 115 companies in a broad range of industry sectors with aggregate initial capitalization at closing of over $40 billion.  The firm is currently investing its eighth investment partnership, Kelso Investment Associates VIII, L.P., with $5.1 billion of committed capital.  For more information, please visit www.kelso.com.The TSX Venture Exchange has neither approved nor disapproved the content of this press release. All director and officer appointments are subject to TSX Venture Exchange approval.Forward-Looking StatementsAll statements in this news release that are not based on historical facts are "forward-looking statements". In this news release, such forward-looking statements include statements regarding the ability of Kelso to complete the take-over bid, the anticipated benefits of the take-over bid, the anticipated benefits to EACOM shareholders of the take-over bid, the timing of the take-over bid and the anticipated receipt of regulatory approvals for the take-over bid. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are beyond our control and could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under "RISKS AND UNCERTAINTIES" in the Company's current MD&A, and under "RISK FACTORS" in the Company's Filing Statement dated January 8, 2010.Additional information relating to EACOM is available at www.eacom.ca and on SEDAR at www.sedar.com.SOURCE: EACOMFor further information: Investors: Marc Girard Executive Vice-President and Chief Financial Officer (514) 848-5133 Media Relations: Frédéric Bérard H+K Stratégies (514) 395-0375 ext. 259