Enterprising Investor
2 weeks ago
UGE International Ltd. Enters into Arrangement Agreement for Going-Private Transaction (5/29/24)
Toronto, Ontario–(Newsfile Corp. – May 29, 2024) – UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the “Company” or “UGE“) and NOVA Infrastructure Fund II, LP, through its affiliated purchaser entity 1000896425 Ontario Ltd. (the “Purchaser“), announced today that they have entered into an arrangement agreement (the “Arrangement Agreement“) pursuant to which the Purchaser will acquire all of the issued and outstanding common shares of the Company (the “Common Shares“) pursuant to a statutory plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction“).
Under the terms of the Arrangement Agreement, the Purchaser has agreed to acquire all of the Common Shares, other than Common Shares (the “Rolling Shares“) to be rolled over by certain management representatives and shareholders of the Corporation (collectively, the “Rolling Shareholders“) into the private entity that will carry on the business of the Company, for an all-cash consideration of C$2.00 per Common Share (the “Consideration“). The Consideration represents a 270% premium to the closing price of the Common Shares on the TSX Venture Exchange (the “TSX-V“) on May 28, 2024, the last trading day immediately prior to the announcement of the Transaction, and a 231% premium to the 30-day volume-weighted average price (“VWAP“) of the Common Shares on the TSX-V for the period ended on May 28, 2024, the last trading day immediately prior to the announcement of the Transaction. The Rolling Shareholders, taken together, own, control or direct an aggregate of 11,502,082 Common Shares (representing approximately 34.2% of the issued and outstanding Common Shares on a non-diluted basis) and will be rolling over an aggregate of 10,372,941 Rolling Shares (representing approximately 30.8% of the issued and outstanding Common Shares on a non-diluted basis). The remaining 1,129,141 Common Shares held by the Rolling Shareholders will be sold to the Purchaser for the Consideration.
The Rolling Shareholders include Nicolas (“Nick”) Blitterswyk, Chief Executive Officer and a director of the Company, directors Yun (“Wendy”) Liu, Xiangrong Xie, and shareholders Junfei Lieu and Daniel Gastel.
Stephen Blum, director and Chair of the special committee of independent directors of the Company (the “Special Committee“), stated, “After careful deliberation, the Special Committee considers that the Transaction represents the best available result for the Company and its shareholders. The Transaction will provide shareholders, other than the Rolling Shareholders, with immediate and certain cash value at a significant premium, while providing the Company with additional flexibility to operate as a private company in the hands of a committed long-term investor.”
Special Committee and Board Approval
The Special Committee, comprised of Stephen Blum, Chris Asimakis, and Scot Melland, was constituted to consider strategic alternatives for the Company, including the Transaction. Origin Merchant Partners, the financial advisor to the Special Committee, has provided an oral opinion to the Special Committee to the effect that, as of the date thereof and subject to the various assumptions, limitations and qualifications set out therein, the Consideration to be received by the shareholders of the Company (other than the Rolling Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such shareholders.
The Board (with conflicted directors abstaining), following receipt of the unanimous recommendation of the Special Committee, unanimously approved the Arrangement Agreement. Both the Special Committee and the Board determined that the Transaction is in the best interests of the Company and fair to the shareholders of the Company (other than the Rolling Shareholders) and the Board (with conflicted directors abstaining) unanimously recommends that shareholders of the Company (other than the Rolling Shareholders) vote in favour of the Transaction at the annual and special meeting of shareholders to be held to approve the Transaction (the “Shareholder Meeting“).
The Arrangement Agreement resulted from a comprehensive negotiation process undertaken at arm’s length with the oversight and participation of the Special Committee advised by independent and qualified legal and financial advisors.
In making its unanimous determination to recommend approval of the Transaction to the Board, the Special Committee, and in the Board’s determination to approve the Transaction, the following factors (among other things) were considered:
Value and Liquidity. The all-cash Consideration for the non-Rolling Shareholders provides such shareholders with immediate value and provides particular benefit given the limited trading volume, the financial challenges facing the Company and the lack of liquidity in the Company’s Common Shares. The Consideration represents a 270% premium to the closing price of the Common Shares on the TSX-V on May 28, 2024, the last trading day immediately prior to the announcement of the Transaction, and a 231% premium to the 30-day VWAP of the Common Shares on the TSX-V for the period ended May 28, 2024.
Fairness Opinion. The Special Committee received an oral fairness opinion from Origin Merchant Partners, which opinion concluded that, based upon and subject to the assumptions made, procedures followed, matters considered, limitations and qualifications set out therein, the Consideration to be received by the shareholders of the Company (other than Rolling Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such shareholders. A written copy of the fairness opinion will be included in the materials sent to shareholders in connection with the Shareholder Meeting.
Arrangement Agreement Terms. The Arrangement Agreement resulted from a comprehensive negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee advised by independent and qualified legal and financial advisors and resulted in terms and conditions that are reasonable in the judgment of the Special Committee and the Board, including a customary “fiduciary out” that will enable the Company to enter into a superior proposal in certain circumstances.
Break Fee and Expense Reimbursement. The Special Committee negotiated a break fee payable by the Company which is reasonable in the circumstances and only payable in customary and limited circumstances. The break fee will be $2.2 million, subject to increase to an amount equal to the Purchaser’s transaction expenses to a maximum of $5.2 million. The Arrangement Agreement also includes expense reimbursement for both parties in certain circumstances.
Minority Vote and Court Approval. The Transaction must be approved by not only two-thirds of the votes cast by shareholders and certain other securityholders, but also by a majority of the minority in accordance with MI 61-101 (as defined below), and by the Ontario Superior Court of Justice, which will consider the fairness and reasonableness of the Transaction to all shareholders.
Support for the Transaction. All of the Rolling Shareholders as well as all of the directors and executive officers of the Company have entered into voting and support agreements representing, in the aggregate, 37.0% of the issued and outstanding Common Shares (on a non-diluted basis), pursuant to which they have agreed to, among other things, vote in favour of the Transaction at the Shareholder Meeting.
Transaction Details and Timing
The Transaction is not subject to a financing condition. The Transaction is to be effected by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario). The consummation of the Transaction is subject to the approval of the Transaction at the Shareholder Meeting by (i) at least two-thirds of the votes cast by the Company’s shareholders; (ii) at least two-thirds of the votes cast by the Company’s shareholders, debentureholders and warrantholders (voting together as a single class on an as-converted basis); and (iii) a simple majority of the votes cast by the Company’s shareholders (other than the Rolling Shareholders and any other Company shareholder required to be excluded for the purpose of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“)). Completion of the Transaction is also subject to other customary conditions, including receipt of court approval.
The Arrangement Agreement includes customary deal-protection provisions. The Company is subject to non-solicitation provisions, which are subject to customary “fiduciary out” provisions that entitle the Board to terminate the Arrangement Agreement in favour of an unsolicited superior proposal, subject to the payment of the break fee described above and subject to a right of the Purchaser to match such superior proposal.
The Company expects to hold the Shareholder Meeting to consider and vote on the Transaction in July 2024. If approved at the Shareholder Meeting, the Transaction is expected to close shortly thereafter, subject to court approval and other customary closing conditions. Following closing of the Transaction, the Common Shares are expected to be delisted from the TSX-V and the Company is expected to submit an application to cease being a reporting issuer under applicable Canadian securities laws.
Voting and Support Agreements
In connection with the Transaction, each of the Rolling Shareholders has entered into irrevocable voting and support agreements pursuant to which they have agreed to vote their Common Shares in favour of the Transaction at the Shareholder Meeting. Each director and executive officer of the Company has also entered into a voting and support agreement to vote their Common Shares in favour of the Transaction at the Shareholder Meeting, subject to certain customary exceptions.
The Common Shares subject to voting and support agreements represent approximately 37.0% of outstanding Common Shares (on a non-diluted basis).
Advisors
CP LLP is acting as legal advisor to the Company. Mintz LLP is acting as independent legal counsel to the Special Committee.
Origin Merchant Partners is acting as the financial advisor to the Special Committee in connection with the Transaction.
Bennett Jones LLP and Blank Rome LLP are acting as legal counsel to the Purchaser.
Additional Information about the Transaction
Further details regarding the terms and conditions of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by the Company under its profile at www.sedarplus.ca. Additional information regarding the Transaction will be provided in the information circular to be sent to shareholders in advance of the Shareholder Meeting, which will also be filed at www.sedarplus.ca.
About UGE International Ltd.
UGE develops, owns, and operates community and commercial solar & battery storage projects. Our distributed energy solutions provide cheaper, cleaner energy to businesses and households throughout the United States. With over 500 megawatts of project experience, UGE is working daily to make renewable energy accessible and affordable for all. Visit us at www.ugei.com. For more information, contact UGE:
Nick Blitterswyk – investors@ugei.com or +1 917 720 5685.
About NOVA Infrastructure Fund II, LP
Founded in 2018, NOVA Infrastructure (http://www.novainfra.com) is a value-added, middle market infrastructure investment firm focused on North America. NOVA targets investments in environmental services, transportation, energy / energy transition, and communication sectors. Currently, NOVA manages NOVA Infrastructure Fund I, LP, NOVA Infrastructure Fund II, LP, and certain parallel vehicles.
https://ugei.com/uge-international-ltd-enters-into-arrangement-agreement-for-going-private-transaction-2/
cash4
4 years ago
UGE Signs Three Agreements, Including Largest US Project in Company’s History
https://www.otcmarkets.com/stock/UGEIF/news/UGE-Signs-Three-Agreements-Including-Largest-US-Project-in-Companys-History?id=257662
Press Release | 03/27/2020
UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in commercial and community solar energy solutions, is pleased to announce that it has signed three agreements to develop, build, and finance solar projects, including the Companys largest US project in its history.
First, UGE signed a 6.6MW project in Westchester, NY. The project, on a well-known corporate campus, will take advantage of New Yorks community solar program by feeding energy into the grid and providing energy credits to community solar subscribers at a discounted rate. The project is approximately 12-15 times the size of UGEs average project and, when completed, will produce power for an estimated 1,000 homes for the duration of the systems lifetime. UGE has also reserved the option with the utility to couple the solar system with battery storage, which would provide a further boost to project revenue and returns.
Second, UGE signed a nine-site portfolio in New York City for a repeat client. The 1.7MW project portfolio will lease the rooftops of the buildings on which UGE will install solar systems. The projects will utilize the same community solar subscription program as described above, offering New York City residents an opportunity to save on their energy bills through solar energy.
Third, UGE signed an agreement to develop, build, and finance a community solar project in Maine. The project is expected to have a rated capacity of 1.1MW and will feed its energy directly into the grid as part of the states solar net metering framework. In the past six months, Maine has become a top community solar market and UGE has affirmed itself as a leading market participant, with a pipeline of opportunities throughout the state.
The three solar projects have a total rated capacity of 9.4MW, with an estimated present value of almost USD$20 million across the portfolios. The Company expects to complete the projects through the end of 2021 with gross margins in line with its current expectations for self-developed projects.
UGE continues to see growing demand, even in the face of the sudden downturn in the economy said UGEs CEO, Nick Blitterswyk. Community solar allows real estate owners to boost revenue by receiving lease payments for their empty rooftops and open land, which is especially attractive during a time when their revenue may otherwise be decreasing.
About UGE International Ltd.
UGE delivers immediate savings to businesses through the low cost of solar energy. We help commercial and industrial clients become more competitive by providing low cost distributed renewable energy solutions at no upfront cost and maximum long-term benefit. With over 380 MW of global experience, we work daily to power a more sustainable world. Visit us at www.ugei.com.
Contact:
investors@ugei.com
917-720-5685
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