Advitech and Natunola Enter Into a Merger Agreement to Execute Previously Announced Business Combination
June 30 2011 - 9:34AM
Marketwired
Advitech Inc. ("Advitech" or the "Corporation") (TSX VENTURE: AVI)
and Natunola Health Biosciences Inc. ("Natunola") (TSX VENTURE:
NHI) are pleased to announce that, following their April 8, 2011
press release, they have entered into a merger agreement to combine
the business of both companies (the "Merger Agreement") with the
intent of creating a leading company in personal care and health
food ingredients.
Pursuant to the Merger Agreement, Advitech will acquire all of
the issued and outstanding shares of Natunola by way of an
amalgamation (the "Amalgamation") between Natunola and 7894716
Canada Inc., a wholly-owned subsidiary of Advitech. The Natunola
shareholders will receive common shares of Advitech based on a
ratio of 4.75 common shares of Advitech (or 1.1875 common shares
following a proposed 4 to 1 consolidation of Advitech shares (see
below)) for each common share of Natunola. All outstanding options
to acquire Natunola common shares which are not exercised prior to
the closing of the transaction will, subject to TSX Venture
Exchange ("TSX-V") policies, be exchanged for Advitech options on
the same terms. Following the Amalgamation, the Natunola shares
will be delisted from the TSX-V and Natunola will continue its
activities as a wholly-owned subsidiary of Advitech.
The completion of the transaction is subject to customary
closing conditions including TSX-V approvals as well as the
approval of at least 66(2)/3 of the votes cast, in person or by
proxy, at a special meeting of Natunola shareholders to be held to
approve this transaction. It is expected that Natunola shareholders
holding around 14% of all issued and outstanding common shares of
Natunola will enter into lock-up agreements with Advitech to vote
their common shares in favour of the Amalgamation. A special
meeting of Natunola shareholders for the purposes of considering
the transaction is expected to be held on August 3, 2011 and an
information circular in connection with this transaction is
expected to be mailed to Natunola shareholders in early July.
Advitech will also hold a special meeting of its shareholders on
August 3, 2011 during which Advitech shareholders will be asked to
approve the consolidation of its outstanding common shares on a 4
to 1 basis (the "Consolidation") and the change of its name to
Botaneco Corp. The management information circular for the special
meeting of Advitech shareholders will also be mailed in early
July.
Under the Merger Agreement, Natunola has agreed that it will not
solicit or initiate any discussion concerning the pursuit of any
other acquisition proposals and has agreed to pay a termination fee
of $250,000 to Advitech in certain circumstances.
As a condition precedent to the transaction, Advitech intends to
complete a private placement, on an agency basis, of a minimum
amount of $3,500,000 and intends to issue a minimum of 87,500,000
units at a price of $0.04 per unit ($0.16 post Consolidation). Each
unit is being comprised of one common share and one half of one
common share purchase warrant of Advitech. Each whole common share
purchase warrant will entitle its holder to acquire one additional
common share of Advitech at a price of $0.05 ($0.20 post
Consolidation) for a period of 36 months following closing.
Bloom Burton & Co. and Paradigm Capital Inc. (collectively,
the "Agents") have been retained by Advitech as agents for the
purposes of the private placement. They will be entitled to
receive, upon completion of the merger transaction in consideration
for the services rendered as part of the private placement, a cash
fee equal to up to 7% of gross proceeds raised in connection with
the private placement and that number of warrants equal to up to 7%
of the number of common shares issued as part of the private
placement. Such warrants will entitle their holders to acquire
common shares of Advitech at a price of $0.04 per unit ($0.16 post
Consolidation) for a period of 24 months following closing. The
Agents will also receive a work fee of $100,000, payable in cash or
in shares, at the option of Advitech, within 10 days of the closing
of the merger transaction.
It is not expected that, further to the completion of the
transaction, the private placement and the consolidation, any
person will own or exercise control or direction over more than 10%
of the issued and outstanding Advitech common shares other than
Avrio Ventures Limited Partnership ("Avrio") and AgeChem Venture
Fund L.P. ("AgeChem"). AgeChem and Avrio, which are related parties
to Advitech under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions, have indicated
they will be participating in the private placement and that they
may acquire, in the aggregate, 25% or more of the units issued as
part of the private placement.
It is contemplated that the Board of Directors of Advitech
post-transaction would consist of seven directors, five of which
are to come from the existing directors of Advitech, namely Mssrs.
Michael Stangel, David D. Guebert, Louis Lacasse, Aki Georgacacos
and Ronald B. Gordon, and two nominees of Natunola, namely Dr. Nam
Fong Han and Mr. David Edwards whose appointment will also be
submitted to the vote of Advitech shareholders at the August 3
special meeting of shareholders of Advitech. The management of the
Advitech post-transaction would consist of Michael Stangel, as
President and Chief Executive Officer, Murray Bruce, as Chief
Financial Officer and Dr. Nam Fong Han, as Executive Chairman and
Chief Operating Officer.
The foregoing is summary only. Further details regarding the
proposed transaction are set out in the full text of the Merger
Agreement which will be filed by both parties on www.SEDAR.com and
in the information circulars distributed by both parties to their
respective shareholders.
About Advitech Inc.:
Advitech, which includes its subsidiary Botaneco Specialty
Ingredients Inc. since November 20, 2009, is a health sciences and
technology company developing, manufacturing and marketing
proprietary natural ingredients and formulations for oral and
topical applications that have been clinically proven to be safe
and effective for improving skin health and well being. More
information is available and can be accessed at
www.advitech.com
About Natunola Health Biosciences Inc.:
Natunola and its manufacturing plant are located in Winchester,
Ontario. Natunola is a manufacturer and researcher in the field of
flax seed derived omega -3 fatty acids, flax protein, flax lignans,
specialty natural products, bio-nutrients and functional
supplements for human and animal care markets. Natunola also
produces canola oil gels and other natural ingredients for the
cosmetic and personal care industry. Natunola has a retail health
product line under the brand name of Natunola® Health's Delight.
Natunola was the winner for the National Canadian Agri-Food Award
of Excellence for Innovation for the year 2008.
www.natunola.com
Cautionary Statements:
This news release contains forward-looking statements and
information ("forward looking statements") within the meaning of
applicable securities laws relating to the proposal to complete the
proposed plan of arrangement and associated transactions (including
the private placement financing), including statements regarding
the terms and conditions of the proposed plan of arrangement and
associated transaction. Readers are cautioned to not place undue
reliance on forward-looking statements. Actual results and
developments may differ materially from those contemplated by these
statements depending on, among other things, the risks that the
parties will not proceed with the proposed plan of arrangement and
associated transactions, that the ultimate terms of the proposed
plan of arrangement and associated transactions will differ from
those that currently are contemplated, and that the proposed plan
of arrangement and associated transactions will not be successfully
completed for any reason (including the failure to obtain the
required approvals or clearances from regulatory authorities or to
complete the concurrent financing). Furthermore, the
forward-looking statements contained in this document are made as
of the date of this document and, except as required by applicable
law and neither Advitech nor Natunola does not undertakes any
obligation to publicly update or to revise any of the included
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this
cautionary statement.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Dr. Nam Fong Han President & Chief Executive
Officer Natunola Health Biosciences Inc. (613) 774-9998 Michael
Stangel President and Chief Executive Officer Advitech Inc.
418-948-4084 215-604-0631 info@advitech.com
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