Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Jan. 18, 2019 /CNW/ - Dynex Power Inc.
(TSXV: DNX), a leading, high power semiconductor company whose
operations are in the United
Kingdom, announced today that it has signed a definitive
Arrangement Agreement with Zhuzhou CRRC Times Electric Co., Ltd.,
whereby CRRC Times Electric, or one of its affiliates, will acquire
all the Company's common shares that it does not already own for
$0.65 per share in cash. CRRC Times
Electric currently holds approximately 75% of the issued and
outstanding common shares in the capital of the Company.
A spokesman for Dynex said that, over the past six months, all
the options for Dynex's future as well as the Company's 5-year plan
were very carefully considered by a Special Committee of the Board
of Directors. This Special Committee was composed of
individuals who are independent, and was formed to conduct a
comprehensive strategic review of the Company and, eventually, to
review and assess the way forward to privatization. To support its
strong recommendation of accepting CRRC Times Electric's offer, the
Special Committee delivered evidence to the Board of Directors that
59.91% of the minority shareholders, those shareholders other than
CRRC Times Electric, had executed commitments to vote for the
approval of the privatization transaction and to sell their shares
to CRRC Times Electric for $0.65 a
share.
The purchase price represents an approximate 160% premium over
the last trading price of the common shares on the TSX Venture
Exchange on January 17, 2019
(immediately prior to the initial announcement of the offer), and
an approximate 158% premium over the 20-trading day volume-weighted
average share price prior to the initial announcement.
In the course of its work, the Special Committee engaged
WelchGroup Consulting Inc. as an independent financial advisor
to provide to the Special Committee an opinion of the fairness of
the privatization transaction. WelchGroup concluded that as of the
date of their opinion and based upon and subject to the information
provided to WelchGroup: the consideration to be paid to the
minority shareholders pursuant to the Arrangement is
fair, from a financial point of view, to the minority
shareholders. The full text of the Fairness Opinion and
the various factors considered by the Special Committee and the
Board of Directors in their determination to approve the
transaction as well as other relevant background information will
be contained in the Company's information circular which will be
provided to shareholders of the Company in connection with the
Extraordinary General Meeting.
Based on the recommendation of the Special Committee, among
other things, the Board of Directors of the Company has, with
interested directors abstaining, unanimously: (i) determined that
the Arrangement is fair to the minority shareholders and that
privatization is in the best interests of the Company; and (ii)
recommended that shareholders vote in favor of the Arrangement. The
Company intends to call an EGM of its shareholders to be held in
March 2019 to seek formal approval
for the Arrangement. A record date and notice of the EGM will also
be announced.
The transaction will be implemented by way of a statutory plan
of arrangement under the Canada Business Corporations Act
which is subject to, among other things, customary conditions,
including approval of a special resolution with respect to the
Arrangement by (i) at least 66⅔% of the votes cast by shareholders
of the Company present in person or represented by proxy at the
EGM, and (ii) a simple majority of the votes cast by the minority
shareholders present in person or represented by proxy at the EGM
(excluding shareholders whose votes are required to be excluded
pursuant to MI 61 - 101), and the receipt of approval of the
Ontario Superior Court of Justice of (Commercial List) with respect
to the Arrangement. The Arrangement is not subject to a financing
condition.
Following this press release, Dynex will soon seek an interim
order from the Ontario Superior Court of Justice of (Commercial
List) to proceed with the privatization transaction. A Record Date
and notice of an Extraordinary General Meeting called to vote on
the transaction will also be announced.
David Banks and Daniel Owen representing the Special Committee
of the Board said, "This is a red-letter day for Dynex. We have
been extremely fortunate to have CRRC Times Electric as the
controlling shareholder. CRRC Times Electric has defined the very
best of ethical and supportive commercial partnership. They have
contributed personnel of the highest caliber to work with Dynex.
They have made a very positive and impressive contribution to the
business, to the Company and indeed to Canada. From our first meeting with our
Chinese colleagues, they have honored every commitment made."
Debbie Weinstein, long standing
corporate counsel and corporate secretary said, "Privatization is
the logical conclusion of the great support and leadership that
CRRC Times Electric has provided Dynex. The Company has great
potential under the full ownership by CRRC Times Electric. However,
I embrace this good news with some sadness, as I will no longer
have the opportunity to work with Dynex and with CRRC Times
Electric."
Clive Vacher, President and Chief
Executive Officer, commented, "This is an exciting development for
Dynex and is positive for the Company and its employees. For over a
decade, CRRC Times Electric has been an exceptional majority owner,
providing first-class support and guidance. As we go forward as a
wholly-owned subsidiary, the future is bright."
Alan Lyons, Dynex Chief Financial
Officer stated, "I add my support to this key strategic decision.
The new full ownership of Dynex will provide even greater synergies
and a simplified structure. Going forward, I will continue to focus
on the objectives of Dynex and look forward to working in an even
more integrated fashion."
Liu Ke'an, the Chairman of Dynex
and General Manager of Zhuzhou CRRC Times Electric Company, added,
"This is the dawning of an exciting time for Dynex. There are very
fine people working in Lincoln. We
have worked very hard to support Dynex. It has been important to
CRRC Times Electric for the people in Lincoln to appreciate CRRC Times Electric's
strong support. It seems that our great respect for them is
reciprocated. The potential in the UK is very bright and exciting,
and we look forward to our future there."
Forward-looking Statements
In commenting on its
expectations, the Company cautioned existing and potential
shareholders about relying on the Company's expectations in that
the Company's expectations contain forward looking statements and
assumptions which are subject to the risks and uncertainties of the
markets and the future, which could cause actual results to differ
materially from expectations, and which are each difficult and
subjective to forecast. Certain of those risks and uncertainties
are discussed in the Management's Discussion and Analysis for the
quarter ended September 30th ,
2018 and include, among other things, risks and uncertainties
relating to: the level of worldwide demand for power semiconductors
and power semiconductor assemblies; the level of investment in
power electronic equipment, electrification of transport systems,
alternative power generation and high quality power transmission
and distribution; and fluctuations in exchange rates between
Canadian Dollars, Sterling, US dollars and Euros. As a consequence
of these and other risks and uncertainties, shareholders and
potential investors must make their own independent judgments about
the accuracy and reliability of the Company's expectations. Dynex
disclaims any intention or obligation to update or revise any
forward-looking statement whether as a result of new information,
future events or otherwise.
About the Company
Dynex designs and
manufactures high power semiconductors, transistor modules and
other electronic assemblies and components. The company's power
products are used worldwide in power electronic applications
including electric power transmission and distribution, renewable
and distributed energy, marine and rail traction motor drives,
aerospace, electric vehicles, industrial automation and controls
and power supplies. Dynex Semiconductor Ltd. is its only operating
business and is based in Lincoln,
England. In 2008, a majority of the shares of Dynex were
acquired by Zhuzhou CSR Times Electric Co., Ltd. In April 2016 this company changed its name to
Zhuzhou CRRC Times Electric Co., Ltd.
Zhuzhou CRRC Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China. It is listed
on the Hong Kong Stock Exchange. CRRC Times Electric is mainly
engaged in the research, development, manufacture and sales of
locomotive train power converters, control systems and other
train-borne electrical systems, as well as the development,
manufacturing and sales of urban railway train electrical systems.
In addition, CRRC Times Electric is also engaged in the design,
manufacturing and sales of electric components including power
semiconductor devices for the railway industry, urban railway
industry and non-railway purposes.
Press announcements and other information about Dynex are
available at www.dynexpower.com or www.dynexsemi.com.
Further information on CRRC Times Electric can be found at
www.tec.crrczic.cc/en.
All monetary values expressed in this release are in Canadian
Dollars unless stated otherwise.
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.
SOURCE Dynex Power Inc.