San Anton Capital Inc.
TSX VENTURE : TON.P

Edleun, Inc.

November 18, 2009 17:30 ET

San Anton and Edleun Announce Proposed Business Combination

MONTREAL, QUEBEC--(Marketwire - Nov. 18, 2009) - NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

San Anton Capital Inc. ("San Anton") (TSX VENTURE:TON.P), a capital pool company listed on the TSX Venture Exchange (the "TSXV"), and Edleun Inc. ("Edleun") are pleased to announce that on November 17, 2009 San Anton and Edleun have entered into a letter of intent (the "Letter of Intent") pursuant to which, San Anton will acquire all of the issued and outstanding shares of Edleun, an arm's length party, either directly or by way of an amalgamation with a wholly-owned subsidiary of San Anton (the "Business Combination") in exchange for shares of San Anton. The Business Combination will constitute San Anton's Qualifying Transaction, as defined in Policy 2.4 of the TSXV Policy Manual.

Concurrent with the Business Combination, and as a condition of closing, Edleun will acquire the assets of 123 Busy Beavers Learning Centres Inc. ("123 BBL") which assets include 123 BBL's wholly-owned subsidiary 0813594 B.C. Ltd ("123 Realco") and certain real estate interests located in Alberta (the "LCG Real Estate") of the Learning Care Group Trust ("LCG"), all arm's length parties to Edleun. The total consideration required to complete the acquisitions of the assets of 123 BBL and the LCG Real Estate is $14,000,000, $1,000,000 of which is to be paid in common shares of Edleun at the price paid by subscribers in the Offering (as described below) and the balance of which is to be paid in cash by Edleun from the proceeds of the Offering. The Business Combination is valued at approximately $16.5 million, assuming closing of the Offering for minimum proceeds of $15 million.

Edleun, Inc.

Edleun is a private company incorporated pursuant to the Canada Business Corporations Act involved in acquiring, developing and operating high quality community based learning and child care centres throughout Canada. Edleun is managed by a team of established and experienced child care operators and developers. All of Edleun's common shares are owned by Educare Development, Inc., a private company incorporated pursuant to the Business Corporations Act (Alberta). Educare Development, Inc. is indirectly owned by Les Wulf, Mark Davis, Ted Rea and Bruce Hall.

Edleun plans to create a strategic operating platform to pursue the acquisition and development of high quality community based educational learning and child care centres across Canada. Edleun has identified a large and growing supply and demand imbalance across Canada in the availability of high quality children's education and care.

123 Busy Beavers Learning Centres Inc. and 0813594 B.C. Ltd.

123 BBL is a private company incorporated pursuant to the Business Corporations Act (British Columbia) which has a 100% interest in the operations of 11 child care centres located in Calgary and Edmonton Alberta. 123 Realco owns 100% of the real estate associated with two of these centres. Both companies are incorporated in British Columbia and 100% controlled by Graeme Wilkie, an Ontario resident.

Learning Care Group Trust

LCG is a private real estate trust which owns a 100% interest in six of the facilities located in Calgary and Edmonton, Alberta currently being leased by 123 BBL and operated as child care facilities. Valiant Trust Company is currently acting as the Trustee of LCG.

Conditions

Completion of the Business Combination will be subject to certain conditions including, without limitation: (a) receipt of all necessary regulatory approval, including the approval of TSXV; (b) satisfaction of the conditions precedent to the acquisition of the assets of 123 BBL and the LCG Real Estate; (C) receipt of shareholder approval by San Anton shareholders to the consolidation, the name change and the stock option plan as further discussed below; (d) completion of the Offering (as defined below) for minimum gross proceeds of $15 million; and (e) certain other usual conditions.

San Anton Shareholder Meeting

In conjunction with the Business Combination, San Anton intends to consolidate its common shares ("San Anton Common Shares") prior to the Business Combination on the basis of one post-consolidation San Anton Share Common Share for every two San Anton Common Shares issued and outstanding immediately before the consolidation. Further, San Anton intends to change its name to "Edleun, Inc.", or a similar name acceptable to regulatory authorities and seek approval for a 10% rolling stock option plan. These changes require the approval of the shareholders of San Anton. A meeting of the shareholders of San Anton is scheduled to be held on December 30, 2009 for the purposes of approving, among other things, the consolidation and the name change. The Business Combination will not be subject to the approval of the shareholders of San Anton.

Financing

It is anticipated that a concurrent financing will be conducted in connection with the Business Combination. Macquarie Capital Markets Canada Ltd. ("Macquarie") has been engaged as lead agent to raise a minimum of $15 million through a private placement issuance of subscription receipts of Edleun (the "Offering") at an anticipated price of $0.50 per subscription receipt. Each subscription receipt will be convertible into one common share of Edleun immediately prior to closing of the Business Combination. Macquarie will receive cash compensation of 6% of the gross amount raised in the Offering and compensation options exercisable to acquire such number of Edleun subscription receipts as is equal to 6% of the number of subscription receipts of Edleun issued pursuant to the Offering. The compensation options will be exercisable at the price at which that the Edleun subscription receipts are sold for a period of 24 months from the closing of the Offering. The proceeds of the private placement will be held in escrow pending satisfaction or waiver of each of the conditions precedent to the Business Combination.

Under the terms of the Letter of Intent, San Anton will advance $25,000 to Edleun for Edleun to pay fees for accounting services and, subject to TSXV approval, San Anton will provide Edleun with a refundable deposit in the amount of $50,000 to cover a portion of Edleun's expenses related to the Business Combination. Upon subscriptions for a minimum of $15 million worth of subscription receipts of Edleun being received, San Anton will provide Edleun with a further refundable deposit in the amount of $50,000 to cover further ongoing expenses related to the Business Combination.

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with the Policies of the TSXV. San Anton and Edleun intend to apply to the TSXV for an exemption from the Sponsorship requirements of the TSXV, but there is no assurance that such an exemption will be granted.

Shareholding of the Resulting Issuer

Upon consolidation of the San Anton Common Shares there will be 3,135,300 San Anton Common Shares outstanding and 313,530 San Anton Common Shares reserved for issuance pursuant to options to purchase San Anton Common Shares. Following completion of the Business Combination there will be a further 600,000 San Anton Common Shares reserved for issuance pursuant to finders fees (as described below). There are currently 5 million common shares of Edleun outstanding. Assuming closing of the Offering for a minimum of $15 million at $0.50 per common share of Edleun and inclusive of the shares to be issued to 123 BBL in connection with the acquisition of the assets of 123 BBL, there will be an aggregate of 37 million common shares of Edleun outstanding immediately prior to the Business Combination. Holders of common shares of Edleun will receive one San Anton Common Share for each common share of Edleun held with the result that 37 million San Anton Common Shares are expected to be issued to holders of common shares of Edleun on closing of the Business Combination. Upon closing of the Business Combination and assuming closing of the Offering for a minimum of $15 million, the current shareholders of San Anton will hold 3,135,300 San Anton Common Shares (7.7%), current shareholders of Edleun will hold 5 million San Anton Common Shares (12.3%), 123 BBL will hold 2 million San Anton Common Shares (4.9%) and holders of common shares of Edleun who subscribed for subscription receipts in the Offering will hold a minimum of 30 million San Anton Common Shares (73.6%). The remaining 600,000 San Anton Common Shares (1.5%) will be held by finders who facilitated the Business Combination.

Other Matters

Finders' fees will be payable to each of Warmad Investments Inc., Allyson Taylor Partners Inc. and to Mr. Marc Lacroix, each of whom are arm's length to San Anton and Edleun, in connection with the Business Combination, by the issuance of $300,000 worth of common shares of San Anton in the aggregate, issued at the price per subscription receipt of Edleun issued in the Offering.

Trading of the San Anton Common Shares will not resume until TSXV has: (i) accepted the sponsorship exemption or a sponsor has been engaged; and (ii) all other documents required by TSXV have been filed. San Anton and Edleun will issue a further news release when the necessary documentation has been filed with TSXV, and trading of the San Anton Common Shares is to resume.

Management and Directors

Following completion of the Business Combination, all of the current directors of San Anton will resign, except for Mr. Mitchell Rosen, who will remain on the board of directors of the resulting issuer. All directors of the resulting issuer will hold office until the next annual general meeting of the resulting issuer unless they resign prior thereto or are removed by the shareholders of resulting issuer.

The members of the executive management team and directors of the resulting issuer will be as follows:

Leslie Wulf - Chief Executive Officer. Mr. Wulf was previously CEO and Founder of CCLC, a national non-traditional child care company. Mr. Wulf was also previously CEO and Co-Founder of RTMS, a web based real time child care management software company. Before entering the child care industry, Mr. Wulf was President of a 36-unit bakery restaurant operation as well as CEO of a U.S. based operator of 47 family entertainment, educational and fitness centres in eleven countries.

Edward Follen, CPA - Chief Operating Officer. Mr. Follen has over 25 years of experience in senior roles including 15 years in the child care industry. Mr. Follen was previously CEO of The Children's Courtyard, Inc., a privately held U.S. child care operator. During his tenure, Mr. Follen grew the number of centres from 22 to 80 and corresponding revenue from US$12 million to US$70 million. Mr. Follen also acted as CFO for Mulberry Child Care Centres, Inc., where he managed the growth from 7 to 76 locations.

Dale Kearns, CMA - Chief Financial Officer and Corporate Secretary. Mr. Kearns has over 20 years of experience in various senior financial roles. Mr. Kearns was CFO of O&Y Properties Corporation, a major Canadian publically traded real estate owner and manager and previous to that Senior Vice President Finance of Camdev Corporation.

Mark Davis - President. Mr. Davis has more than 10 years of operations and development experience. Previously Mr. Davis was responsible for the acquisition and establishment of 123 BBL in the Canadian market. President and Co-Founder of RTMS, a company that developed and licensed web based child care software sold in four different countries.

Marnie Testa - VP National Operation. Ms. Testa has over 15 years experience in the child care industry. Marnie served as a Regional Manager for a large international operator, overseeing the operation, before moving into her role as head of the new center start-up division, where Marnie was responsible for the integration and transition of over 500 child care centers. Prior to joining 123 BBL, Marnie was National Operations Manager for a large international operator where she was responsible for the operation of over 1100 child care centers.

Colley Clarke, CA - Chairman & Director. Mr. Clarke was previously CFO and board member of Redknee Solutions Inc., and also previously CFO of Descartes Systems Group Inc., a leading global provider of network based logistics solutions for shippers and carriers.

Robert Logan - Director. Mr. Logan was previously the Managing Director Fixed Income Capital Markets, Citigroup New York, responsible for Canadian corporate and government relationships, prior to which he was Head of Securitization and Loan Syndications, CIBC Wood Gundy Toronto. Mr. Logan is a board member of TSX-listed Carmanah Technologies and Orvana Minerals as well as the Arizona Technology Investor Forum, a non-profit group, affiliated with the Ira Fulton School of Engineering at ASU, providing funding to early-stage technology ventures.

John Snobelen - Director. Mr. Snobelen is the former Minister of Education for the province of Ontario, former Minister of Natural Resources for the province of Ontario. Mr. Snobelen has private sector experience as a founder and president of large transportation and waste management companies.

Daniel F. Gallivan - Director. Mr. Gallivan is currently Managing Director with Cox & Palmer LLP, former director of the Bank of Canada, former Vice Chair of the Nova Scotia Securities Commission.

Traudi Kelm - Director. Ms. Kelm has over 30 years of experience in the child care industry including 15 years in executive level roles. Ms. Kelm is currently President of Day Care Society of Alberta, Chair of Governing Council for The Accreditation for Early Learning and Care Services and Director of the Alberta Child Care Network.

Rick Dahlson - Director. Mr. Dahlson is currently a Partner with Jackson Walker LLP, managing the Firm's Corporate Securities group, which is comprised of over 100 attorneys. Mr. Dahlson has significant experience in securities matters, including public offerings, private placements, and public reporting compliance. Mr. Dahlson was on the board of child care provider Bright Beginnings LLC.

Mitchell Rosen C.A - Director. Mr. Rosen is currently Executive Vice President and Chief Financial Officer of Stock-Trak a leading global provider of web based financial market simulation for consumers, educators and financial institutions. Mr Rosen is a founding director of San Anton Capital Inc and has over 25 years of experience in operating, financial, and strategic roles in both private and public enterprises.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this release.

NEITHER THE 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.

These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States and these securities may not be offered or sold, directly or indirectly, within the United States or to or for the account or benefit of a U.S. person (as defined in Regulation S under the U.S. Securities Act) without registration under the U.S. Securities Act and any applicable state securities laws unless an exemption from registration is available. This news release is not an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

Contact Information

  • San Anton Capital Inc.
    Mr. Mitchell Rosen
    Chief Financial Officer and Secretary
    514-812-7029
    or
    Edleun, Inc.
    Les Wulf
    Chief Executive Officer
    214-717-5679