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TORONTO,
March 26, 2013 /CNW/ - Look
Communications Inc. ("Look") (NEX: LOK.H and LOK.K) announced today
it has entered into a securities purchase agreement (the "Purchase
Agreement") pursuant to which Look has agreed to acquire all of the
outstanding shares of Sunwave Gas & Power Inc. ("Sunwave"), a
privately-held provider of innovative energy commodity products and
services based in Toronto, for
aggregate consideration of $1
million. It is anticipated that consideration for the
transaction will be satisfied through the issuance of 3,382,974
multiple voting shares and 3,759,883 subordinate voting shares in
the capital of Look, each valued at $0.14 per share (the "Acquisition").
Concurrently with the execution of the Purchase Agreement, Look has
entered into subscription agreements (the "Subscription
Agreements") with a group of sophisticated arm's length investors
pursuant to which the investors will subscribe, on a private
placement basis, for an aggregate of 30,446,767 multiple voting
shares and 33,838,947 subordinate voting shares in the capital of
Look at a price of $0.14 per share
for aggregate subscription proceeds of $9,000,000 (the "Private Placement" and, together
with the Acquisition, the "Transactions"). The multiple
voting shares and subordinate voting shares intended to be issued
pursuant to the Transactions will be issued in the same proportion
as the number of multiple and subordinate voting shares currently
outstanding, and all such shares will be subject to a hold period
expiring four months and one day after closing of the
Transactions. The shares issued as consideration for the
Acquisition may be subject to escrow in accordance with the
policies of the TSX Venture Exchange (the "Exchange").
"This transaction is the culmination of a
process of assessing all available options for maximizing value for
shareholders that has been ongoing since the current board took
office in July of 2010", said Lawrence
Silber, an independent director of Look. "With
approximately $26.5 million in cash
and a board and management team with significant experience and
expertise in the industry, the board believes that the combined
company will be well-positioned for growth and that this
transaction represents the best available opportunity to maximize
returns for Look's shareholders over the long term" continued Mr.
Silber.
"Sunwave is excited to be joining forces with
Look, creating a platform on which to build Sunwave's growing
retail energy business for the benefit of both existing and new
Look shareholders" said Rob Weir,
President of Sunwave.
Look has not carried on an active business since
the sale of its wireless spectrum business in 2009.
Accordingly, on November 11, 2011,
Look's shares were transferred to the NEX board of the
Exchange. The Acquisition constitutes a "change of business"
within the meaning of the policies of the Exchange and,
accordingly, Look has applied to the Exchange for reactivation and
graduation to the Exchange as an Industrial issuer upon completion
of the Transactions. The proceeds of the Private Placement
will be used to fund the working capital requirements of Sunwave,
for organic and inorganic growth opportunities, and for general
corporate purposes.
Contemporaneously with the completion of the
Transactions, Mark J. Lewis, Chief
Executive Officer of OZZ Clean Energy Inc. ("OZZ"), the parent
company of Sunwave, will be appointed Chief Executive Officer of
Look, and Robert Weir, President of
Sunwave, will be appointed Chief Operating Office of Look. In
addition, Stanley H. Hartt and
Stephen J.J. Letwin will be
appointed to the Look board as independent directors and two of
Look's existing independent directors will continue as
directors. Biographies for Messrs. Lewis, Weir, Hartt and
Letwin are provided below. It is anticipated that
C. Fraser Elliot, Look's Chief
Financial Officer, will continue in his role following completion
of the Transaction.
Each of the Acquisition and the Private
Placement is conditional upon the completion of the other.
Completion of the Transactions is subject to a number of
conditions, including Exchange acceptance, the approval of Look's
shareholders in accordance with the policies of the Exchange and
other customary conditions. The transaction is also
conditional upon Look's shareholders either approving Look's
existing dual class share structure or voting to collapse the dual
class share structure into a single class of common shares, in each
case in accordance with applicable laws and the rules of the
Exchange. If Look's shareholders vote to collapse the dual
class share structure, Look will issue a number of common shares
pursuant to the Acquisition and the Private Placement that is
economically equivalent to the number of multiple and subordinate
voting shares described above. Subject to the satisfaction or
waiver (where permitted) of all applicable conditions, it is
anticipated that the closing of the Transactions will occur late in
or about June, 2013. Look intends to seek an exemption from
the Exchange's sponsorship requirements in connection with the
Acquisition. If the Exchange does not grant an exemption,
completion of the Transactions will also be conditional upon Look
obtaining a sponsorship report from a qualified brokerage firm
satisfactory to the Exchange.
All of the terms and conditions of the
Transactions are set forth in the Purchase Agreement and the
Subscription Agreements, copies of which will be available under
Look's profile at www.sedar.com. Additional information
regarding the Transactions and the businesses of Look and Sunwave,
will be included in an information circular to be prepared by Look
in accordance with the policies of the Exchange and applicable
securities laws, a copy of which will also be available under
Look's profile at www.sedar.com.
Prior to the execution of the Purchase Agreement
and the Subscription Agreements, Look terminated the support
agreement entered into with Messrs. Robert
Ulicki and Jeff Gavarkovs
dated December 18, 2012. Look's
board of directors determined that the Transactions constitute a
"superior proposal" (as defined in the support agreement) and,
accordingly, has paid the termination payment of $225,000 to Messrs Ulicki and Gavarkovs.
Look continues to vigorously pursue recovery of
the approximately $20 million of sale
awards paid in 2009 pursuant to the statement of claim issued by
Look in July, 2011 and CBCA motion materials filed in August,
2011.
Mark J.
Lewis
Mark Lewis brings
more than 20 years of executive leadership and management
experience in the energy industry in both operating and investing
roles. Mr. Lewis currently serves as the President and CEO of OZZ,
a leading energy services provider based in Toronto. Prior to joining OZZ, Mr. Lewis was a
Partner and Managing Director with MissionPoint Capital Partners, a
private investment firm investing in the transition to a lower
carbon economy. Mr. Lewis co‐led the firm's overall investment
strategy and was a member of the investment committee. Previously,
he was with General Electric Company ("GE") in a number of roles in
Europe and North America, including leading the global
business development activities of GE's largest industrial
business, GE Energy. Mr. Lewis began his career with Credit Suisse
in its energy and mergers and acquisitions advisory businesses. Mr.
Lewis holds an MBA from the Kellogg School of Management at
Northwestern University and a B.A.
(Hons. with distinction) from the University
of Western Ontario. Mr. Lewis also serves on the boards of
Trilliant Inc., a global smart grid solutions provider, and UpWind
Solutions Inc., the largest independent provider of operations and
maintenance services to the North American wind power industry.
Robert
Weir
Mr. Weir has more than 20 years of international
and domestic business development and executive management
experience in the energy sector. Mr. Weir is currently the
President of Sunwave and is responsible for all operations of the
business. Prior to joining Sunwave, Mr. Weir was President of Zoom
Energy, a private energy advisory and consulting company. His
previous experience includes large scale cogeneration development
in Australia and Canada. He led the launch of Constellation New
Energy's electric retail business in Ontario. Subsequently he moved on to manage
Constellation New Energy's commodity retail businesses in
New York and New Jersey, based out of New York City.
Stanley H.
Hartt, O.C., Q.C.
Stanley H. Hartt
is Counsel at Norton Rose Canada LLP and has decades of leadership
experience in business, law and public policy. Immediately prior to
joining Norton Rose in 2013, Mr.
Hartt was chairman of Macquarie Capital Markets Canada Ltd. Called
to the Quebec Bar in 1965, he worked for Stikeman Elliott for 20
years and from 1985 to 1988, was Deputy Minister of the Department
of Finance, Canada. From 1989 to
1990, Mr. Hartt was Chief of Staff in the Office of Prime Minister
Brian Mulroney and from 1990 to 1996
he was Chairman, President and CEO of Campeau Corporation. In 1996,
Mr. Hartt became Chairman of Salomon Brothers Canada Inc., later
renamed Citigroup Global Markets Canada Inc., until 2008. He
continued his public service as Chair of the Advisory Committee on
Financing, established by the Minister of Finance during the Global
Financial Crisis. He was also a member of the Canadian Task Force
on Social Finance which reported in December
2010. Mr. Hartt has a great deal of U.S. cross‐border and
international experience and participated actively in negotiating
the Canada‐U.S. Free Trade Agreement.
Stephen J. J.
Letwin
One of Canada's
premier business leaders, Steve
Letwin is President and Chief Executive Officer of IAMGOLD
Corporation, a multi-billion dollar senior gold producer listed on
the Toronto Stock Exchange. Specializing in corporate finance,
operational management, and merger and acquisitions, Mr. Letwin
brings over 30 years of experience from the highly competitive
resource sector. Mr. Letwin was previously with Enbridge Inc. in
Houston, Texas, as Executive Vice
President, Gas Transportation & International. He was
responsible for natural gas operations including overall
responsibility for Enbridge Energy Partners as Managing Director.
In 1999, Mr. Letwin joined Enbridge as President and COO, Energy
Services, based in Toronto,
Canada. Before Enbridge, he was President & CEO of
TransCanada Energy and CFO, TransCanada Pipelines, Numac (Westcoast
Energy) and Encor Energy. Mr. Letwin holds an MBA from the
University of Windsor, is a Certified
General Accountant, a graduate of McMaster
University (B.Sc., Honours), and a graduate of the Harvard
Advanced Management Program.
About Sunwave Gas & Power Inc.
Sunwave is a private provider of innovative
energy commodity products and services based in Toronto, Ontario. Founded in 2011,
Sunwave is a licenced retailer of energy commodity products to the
residential and commercial customer segments in the Ontario market. Sunwave offers consumers
the choice to purchase their natural gas and electricity at fixed
or variable rates for terms of 1 to 5 years. Sunwave currently
serves or will serve, based on executed customer contracts, 425
customer accounts represented by 25 large commercial customers and
377 residential accounts. This represents approximately 2,800
residential customer equivalents (a standard industry measure of
the annual consumption of an average residential customer, which
equates to 10,000 kWh/yr for electricity and 2,815 m3 for natural
gas). Sunwave is licensed by the Ontario Energy Board for both
natural gas and electricity sales through to 2017. Sunwave is
incorporated under the Canada Business Corporations Act.
Sunwave's first full year of operations was in
2012, during which Sunwave generated gross revenue of approximately
$330,000 from the sale of natural gas
deliveries in Ontario, resulting
in gross margin of approximately $81,000. During 2012, Sunwave incurred a
net loss of approximately $1,998,000,
primarily resulting from expenses associated with investment in
Sunwave's back office systems and sales processes. The
foregoing summary financial information is derived from Sunwave's
unaudited financial statements for the fiscal year ended
December 31, 2012.
Sunwave is a wholly-owned subsidiary of OZZ, a
corporation incorporated under the laws of Canada. OZZ is indirectly controlled by
Steve Muzzo, a businessman resident
in the Province of Ontario.
Sunwave's website may be found at www.sunwavegas.com.
About Look Communications Inc.
Look's shares are currently listed on the NEX
under the symbols "LOK.H" for Multiple Voting Shares and "LOK.K"
for Subordinate Voting Shares. Look's website may be found at
www.grouplook.ca.
Cautionary Statements
Completion of the Transactions is subject to a
number of conditions, including Exchange acceptance and
disinterested shareholder approval. The Transactions cannot close
until the required shareholder approval is obtained. There can be
no assurance that the Transactions will be completed as proposed or
at all.
Investors are cautioned that, except as
disclosed in the information circular to be prepared in connection
with the Transactions, any information released or received with
respect to the Transactions may not be accurate or complete and
should not be relied upon. Trading in the securities of Look should
be considered highly speculative.
The Exchange has in no way passed upon the
merits of the proposed Transactions and has neither approved nor
disapproved the contents of this news release.
The information contained in this release
includes forward-looking statements regarding future events and the
future performance of Look and Sunwave, including the completion of
the Transactions, that involve risks and uncertainties, including
the ability of Look and Sunwave to obtain Exchange approval and
shareholder approval, that could cause actual events or results to
differ materially. Assumptions used in the preparation of such
information, although considered reasonable by Look and Sunwave at
the time of preparation, may prove to be incorrect. The actual
events or results achieved may vary from the information provided
herein and the variations may be material. Consequently, there is
no representation by Look or Sunwave that actual events or results
achieved will be the same in whole or in part as those
forecast.
Neither the NEX nor its Regulation Services
Provider (as that term is defined in the policies of the NEX)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Look Communications Inc.