Toromont Industries Ltd.
TSX : TIH

Toromont Industries Ltd.

November 12, 2009 07:30 ET

Toromont Announces Take-Over Bid to Acquire Enerflex Systems Income Fund for $13.50 Per Unit

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2009) - Toromont Industries Ltd. ("Toromont") (TSX:TIH) today announced that it intends to proceed with a formal take-over bid to acquire all of the issued and outstanding trust units of Enerflex Systems Income Fund ("Enerflex") (TSX:EFX.UN) and all of the issued and outstanding exchangeable units of Enerflex Holdings Limited Partnership.

Under the terms of the offer, unitholders may choose to receive either $13.50 in cash per unit, or 0.5098 of a common share of Toromont and $0.05 cash per unit, in each case subject to pro ration. The maximum amount of cash payable by Toromont under the offer will be approximately $300 million and the maximum number of common shares issuable by Toromont under the offer will be approximately 11.3 million (based on the estimated number of Enerflex units outstanding on a fully-diluted basis as at September 30, 2009).

Toromont's offer represents a premium of 34.1% to the closing price of the Enerflex units on October 16, 2009 and a premium of 32.9% to the volume-weighted average trading price of the Enerflex units in the 20 trading days up to and including October 16, 2009.

On October 16, 2009, Toromont made a proposal to Enerflex to enter into a negotiated business combination in which Toromont would acquire all of the Enerflex units for consideration of $13.50 per unit, comprised of a combination of cash and common shares of Toromont. Since that time, Toromont and Enerflex have not made any meaningful progress towards a negotiated transaction, which has led to Toromont's announcement of its intention to make a formal take-over bid.

"Toromont's offer represents an attractive premium and valuation for Enerflex unitholders. It also provides them with the opportunity to receive common shares of Toromont and participate in the success of the company formed by the combination of Enerflex and Toromont Energy Systems, our gas compression division," said Robert M. Ogilvie, Chairman & Chief Executive Officer of Toromont. Mr. Ogilvie added, "We continue to believe that bringing these operations together would create a stronger organization better able to compete in the North American and international markets."

Unitholders of Enerflex holding an aggregate of 7,531,988 trust units (approximately 17% of trust units outstanding) have entered into lock-up agreements pursuant to which they have agreed to tender their trust units to Toromont's offer, subject to certain exceptions. The trust units covered by these lock-up agreements, together with the trust units owned by Toromont, represent approximately 25.8% of the Enerflex trust units outstanding.

The offer will be made following receipt of unitholder lists from Enerflex and Enerflex Holdings Limited Partnership, or earlier by publication of an advertisement and filing of the take-over bid circular as required by applicable Canadian securities laws. Full details of Toromont's offer will be included in the take-over bid circular. The offer is expected to expire in early January, 2010.

The offer will be subject to customary conditions including: the deposit of Enerflex trust units constituting (i) together with the trust units owned by Toromont and its affiliates, at least 66 2/3% of the outstanding trust units (on a fully-diluted basis), and (ii) at least a majority of the trust units (on a fully-diluted basis) the votes attached to which would be included in the minority approval of a second-step business combination under applicable securities laws; the receipt of government and regulatory approvals; the unitholder rights plan of Enerflex not adversely affecting the offer or Toromont; and no material adverse change having occurred in the affairs of Enerflex.

ABOUT TOROMONT

Toromont Industries Ltd. operates through two business segments: The Equipment Group and the Compression Group. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory in addition to industry leading rental operations. The Compression Group is a North American leader specializing in the design, engineering, fabrication, and installation of compression systems for natural gas, coal-bed methane, fuel gas and carbon dioxide in addition to process systems and industrial and recreational refrigeration systems. Both Groups offer comprehensive product support capabilities. This press release and more information about Toromont can be found on the Web at www.toromont.com.

ADVISORY

Statements and information herein that are not historical facts are "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "will", "may" and similar expressions are intended to identify forward-looking information and statements. By their nature, forward-looking information and statements are subject to risks and uncertainties which may be beyond Toromont's ability to control or predict. Actual results or events could differ materially from those expressed or implied by forward-looking information and statements as a result of a number of factors, risks and uncertainties including those found in the "Risks and Risk Management" and "Outlook" section of Toromont's management discussion and analysis of financial results for the six months ended June 30, 2009 and the "Risks and Risk Management" and "Outlook" sections of Toromont's management's discussion and analysis of financial results for the year ended December 31, 2008, as well as factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material.

Readers are cautioned not to place undue reliance on the forward-looking information and statements contained herein, which are given as of the date of this document, and not to use such information and statements for anything other than their intended purpose. Toromont disclaims any obligation or intention to update or revise any forward-looking information or statement, whether the result of new information, future events or otherwise, except as required by applicable law.

This press release does not constitute an offer to buy any securities or a solicitation of any vote or approval or a solicitation of an offer to sell any securities.

Contact Information

  • Kingsdale Shareholder Services Inc.
    Information Agent for the offer
    Toll-free at 1-888-518-6832
    or
    Toromont Industries Ltd.
    Paul R. Jewer
    Vice President Finance & Chief Financial Officer
    (416) 667-5501