Press release from Marketwire
GENIVAR to Implement a Global Corporate Structure to Set Strong Foundations for Future Growth
Wednesday, April 17, 2013
GENIVAR to Implement a Global Corporate Structure to Set Strong Foundations for Future Growth08:00 EDT Wednesday, April 17, 2013
MONTREAL, QUEBEC--(Marketwired - April 17, 2013) -
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART OUTSIDE CANADA OR TO ANY PERSON LOCATED OR RESIDENT OUTSIDE CANADA OR TO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
GENIVAR Inc. (TSX:GNV) ("GENIVAR" or the "Company") today announced that it is proposing a reorganization whereby it will implement a global corporate structure to set strong foundations for future growth (the "Arrangement"). The proposed Arrangement is subject to approval by shareholders of the Company (the "Shareholders") and other approvals and will be undertaken pursuant to a statutory plan of arrangement under Section 192 of the Canada Business Corporation Act.
"The transaction with WSP was a major and transformational achievement in the history of our Company. Since our merger with WSP, we are now active in more than 35 countries and have therefore decided to adapt our corporate structure to our new global footprint. We expect that the Arrangement will become effective on January 1, 2014, but in any event prior to the 2014 annual general meeting of shareholders, at which time our public entity, headquartered in Montreal, will become WSP Global" stated Pierre Shoiry, President and CEO of GENIVAR. "WSP's strong presence around the world and its global recognition in a number of market segments has led us to make the logical choice of changing the GENIVAR name to WSP, which will be gradual and performed as appropriate after the reorganization is completed, and following a schedule to be determined. This choice is the first step in our strategy to build a leading global consultancy around one unified and strong brand "WSP", which we will be proud to leverage in all the regions where we operate," he added.
Background and Reasons for the Arrangement
Since the August 2012 acquisition of WSP Group PLC ("WSP"), a global multi-disciplinary professional services consultancy (the "Transaction"), the Company counts approximately 15,000 employees based in more than 300 offices, across 35 countries on every continent. In light of the Company's strong international presence and diverse end markets, the proposed reorganization of the Company was considered and an analysis of the operational, financial and legal aspects and other considerations associated with the proposed Arrangement was carried out by Management of the Company and its advisors. Following such analysis, it was determined that the reasons in favour of reorganizing the Company into a global corporate structure were compelling as the Arrangement will:
- Provide a holding structure which would enable the Company to eventually separate regional operations in distinct subsidiaries, thus setting the foundations for future growth;
- Isolate head office operations and costs for all operations at the public entity level and allow the Company to adopt overall corporate policies without interfering with individual management of the subsidiaries;
- Create a better risk management structure by isolating, to the extent possible, the public entity from operations and operational risks; and;
- Provides an opportunity for the Company to rebrand itself as WSP Global Inc. and leverage the strong WSP brand across the world.
Each of Canada Pension Plan Investment Board and the Caisse de dépôt et placement du Québec, who together own an aggregate of approximately 15,523,312 shares of the Company, representing approximately 30.2% of the outstanding shares, has indicated that it intends to vote all of its shares in favour of the Arrangement subject to entering into satisfactory documentation to confirm and preserve its rights pursuant to its prior private placement investments in the Company. The directors and executive officers of the Company, who together own an aggregate of approximately 902,165 shares of the Company, representing approximately 1.8% of the outstanding shares, have also indicated their intention to vote their shares in favour of the Arrangement.
The Board of Directors of the Company, based upon its own investigations and deliberations, has unanimously concluded that the Arrangement is fair to Shareholders and is in the best interests of the Company and its Shareholders, and recommends that Shareholders vote in favour of the Arrangement.
Mechanics of the Arrangement
If approved, the Arrangement will result in the Shareholders becoming the sole shareholders of the new entity, which in turn will own all of the shares of the Company. The shares of the Company held by the Shareholders will be transferred to the new entity in consideration for shares of the new entity on the basis of one share of the new entity for each share of the Company so transferred. Upon completion of the Arrangement, the new entity will, in effect, replace the Company as the publicly held corporation and the new entity and its subsidiaries will conduct all of the operations currently being conducted by the Company and its subsidiaries. It is expected that the exchange of shares of the Company for shares of the new entity will be completed on a tax-free rollover basis for Canadian federal and United States federal income tax purposes.
The details of the Arrangement are further described in the Notice of Annual and Special Meeting of Shareholders and the Management Information Circular which is anticipated to be mailed to Shareholders at the end of April 2013 in connection with the Arrangement and other matters to be considered at the upcoming annual and special meeting (the "Meeting") of Shareholders which will be held on May 23, 2013 in Montreal, Quebec.
The Arrangement is subject to approval by not less than two-thirds of the votes cast by Shareholders voting in person or by proxy at the Meeting. The Arrangement is also subject to the approval of the Superior Court of Quebec, who will consider the fairness and reasonableness of the Arrangement for Shareholders and all necessary regulatory approvals. The Company will apply to the Toronto Stock Exchange (the "TSX") for the listing of the common shares of the new entity on the TSX and the Company will seek to delist its common shares from the TSX following the completion of the Arrangement.
Following the Arrangement, the composition of the Board of Directors, the business, the capital structure, the dividend policy, the executive compensation program and other particulars of the new entity will essentially remain the same as that of GENIVAR.
The Company expects, subject to receipt of required approvals, that the Arrangement will become effective on January 1, 2014. The Board of Directors however retains discretion to implement the Arrangement at any time after the Final Order has been obtained but in any event prior to its 2014 Annual Shareholder Meeting, provided that GENIVAR issues a press release announcing the proposed effective date of the Arrangement at least 30 days prior to such effective date. The Board of Directors also retains discretion to determine not to implement the Arrangement at any time.
Certain information regarding the Company, the new entity and the Arrangement contained herein may constitute forward-looking statements. Forward-looking statements may include statements with respect to, among other things, the Arrangement, expectations, opinions or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
The Company, through its combination with WSP, is one of the world's leading professional services firms, working with governments, businesses, architects and planners and providing integrated solutions across many disciplines. The firm provides services to transform the built environment and restore the natural environment, and its expertise ranges from environmental remediation to urban planning, from engineering iconic buildings to designing sustainable transport networks, and from developing the energy sources of the future to enabling new ways of extracting essential resources. It has approximately 15,000 employees, mainly engineers, technicians, scientists and architects, as well as various environmental experts, based in more than 300 offices, across 35 countries, on every continent. www.genivar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chief Financial Officer
514-340-0046, ext. 5310
Director, Communications and Investor Relations
514-340-0046, ext. 5648