Grain News

CWB to Acquire Prairie West Terminal

Date Posted: April 22, 2014

Winnipeg, Manitoba and Plenty, Saskatchewan—CWB and Prairie West Terminal Ltd. ("PWT") announced April 17 that they have entered into an arrangement agreement (the “Arrangement”) whereby CWB (through a wholly-owned subsidiary) will acquire all of the issued and outstanding common shares of PWT, excluding shares owned by CWB and its affiliates (“PWT Shares”) for cash consideration of $2,109.23 per share (the “Transaction”), representing aggregate consideration of $43,234,996.54.

The Transaction offers all PWT shareholders liquidity for their PWT Shares at a compelling value.

PWT’s Board will mail a management information circular containing additional details of the Transaction in the upcoming weeks to its shareholders for approval at a meeting expected to be held on or about May 30, 2014.

PWT’s Board of Directors, with the benefit of advice from its financial advisors (includ ing receipt of a fairness opinion) and legal advisors, have unanimously determined that the Arrangement is in the best interests of PWT and recommend that shareholders vote in favour of the Transaction.

In making this recommendation the Board of Directors considered a number of benefits of the Transaction, including PWT’s long-standing relationship with CWB and CWB’s access to export markets and its significant grain marketing experience, which will provide a strong, local competitive option for PWT farm customers.

In addition to the Arrangement Agreement, the directors and senior officers of PWT have each executed agreements pursuant to which they have agreed to support the Transaction and vote their PWT Shares in favour of the Transaction at the upcoming meeting of shareholders of PWT.

“We are excited to announce this agreement with Prairie West Terminal,” said CWB president and CEO Ian White.

“PWT has a solid reputation with its farmer customers, and in the community at large. CWB values farmers in this community and intends to foster the relationships that the organization has built with local farmers and the surrounding community” said White.

“This purchase strengthens CWB’s growing network of assets across Western Canada and represents the first opportunity farmers will have to deliver grain to a CWB owned elevator.”

“CWB is a farmer-oriented company with an established customer network and unsurpassed grain and risk management expertise. As CWB continues to grow its asset network across the Prairies, we’re excited to be a part of that story”, said Chad Campbell, CEO of PWT.

“There are a lot of changes going on in the industry landscape, and this Transaction will bring a very experienced marketer of grain to the local market, and ensure the continued success of these facilities and local producers in the years to come.

"The Board of Directors of PWT sees significant benefit in the Transaction to all stakeholders. It offers shareholders a very attractive return on their investment, and ensures an ongoing, positive presence in our local community.”

The purchase of PWT adds to CWB’s existing asset network, which includes Mission Terminal, Les Élévateurs des Trois-Rivières, Services Maritimes Laviolette, and a minority interest in Prairie West Terminal.

Transaction Details

Completion of the Transaction is subject to court approval pursuant to The Business Corporations Act (Saskatchewan) (the “SBCA”), and the approval of two-thirds of the votes cast by shareholders present in person or by proxy at the special meeting of shareholders.

The Transaction is also subject to customary closing conditions for a transaction of this nature, including receipt of all regulatory approvals, and is expected to close in June, 2014.

The Arrangement provides for, among other things, a non-solicitation covenant on the part of PWT, subject to customary fiduciary out provisions.

CWB will pay a termination fee of $2 million if it terminates the Arrangement for certain reasons.

The Arrangement also provides CWB with a right to match a superior proposal for PWT and entitles CWB to a termination fee of $2 million if the Arrangement is terminated in certain circumstances, including if PWT enters into an agreement with respect to a superior proposal or if PWT’s Board withdraws its recommendation with respect to the Arrangement.

Advisors and Counsel

PWT’s financial advisor is Ernst & Young Orenda Corporate Finance Inc. and its legal counsel is MacPherson Leslie & Tyerman LLP.

Virtus Group Chartered Accountants & Business Advisors LLP provided a fairness opinion to PWT’s board.

CWB’s financial advisor is Deloitte LLP and its legal counsel is Aikins MacAulay & Thorvaldson LLP.

For more information, call 204-983-3101.

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