Andlauer Management Group Inc.

October 15, 2008 13:42 ET

Andlauer Management Group Inc. Announces Intention to Make Offer for $11.75 Per Unit in Cash for ATS Andlauer Income Fund; Unitholders Representing 56.0% of the Outstanding Units Support the Deal

TORONTO, ONTARIO--(Marketwire - Oct. 15, 2008) -

Attention Business Editors:

Andlauer Management Group Inc. ("AMG") announced today that, following its previously announced proposal to the Board of Trustees of ATS Andlauer Income Fund ("ATS") (TSX:ATS.UN) to acquire all of the units (the "Units") of ATS not owned by AMG or its affiliates, AMG now intends to make an offer (the "Offer") to unitholders, through an acquisition entity (the "Offeror"), to acquire all Units not owned by AMG or its affiliates at a price per Unit of $11.75 in cash. Further, the Offeror has entered into lock-up agreements (the "Lock-up Agreements") whereby certain institutional investors, certain members of senior management of ATS and other unitholders (the "Lock-up Unitholders") have agreed to tender the Units held by them (or over which they exercise control and direction) to the Offer, subject to certain conditions.

The Lock-up Unitholders who have agreed to tender Units to the Offer pursuant to the Lock-up Agreements collectively hold (or exercise control or direction over) 3,509,088 Units representing approximately 30.7% of the outstanding Units (on a fully diluted basis). AMG directly or indirectly holds 568,406 Units and 2,316,442 securities exchangeable for Units which represents approximately 25.3% of the outstanding Units (on a fully diluted basis). Accordingly, the Units covered by the Lock-up Agreements and the Units or securities convertible into Units held directly or indirectly by AMG represent approximately 56.0% of the outstanding Units (on a fully diluted basis).

Full details of the Offer will be provided in a take-over bid circular expected to be provided to unitholders by the end of October. Completion of the Offer will be conditional on, among other things: (i) deposit to the Offer of Units that represent (a) together with Units (and securities exchangeable for Units) held by the Offeror and its affiliates, more than 66 2/3rds of the outstanding Units and (b) at least a majority of the Units, the votes attached to which would be included under applicable Canadian securities laws for the purpose of determining minority approval of certain transactions, in each case on a fully diluted basis; and (ii) the unitholder rights plan (the "Rights Plan") put in place by the Board of Trustees on August 12, 2008 being waived by the Board of Trustees in respect of the Offer or otherwise rendered ineffective. In accordance with the requirements of applicable Canadian securities laws, the take-over bid circular will include a copy of the formal valuation (the "Valuation") of the Units prepared under the supervision of a special committee of the Board of Trustees by a valuator selected by the special committee. AMG has received a copy of the Valuation which discloses that, in the opinion of the valuator (and subject to the assumptions, qualifications and limitations contained therein), the fair market value of the Units is in the range of $12.50 to $14.50 per Unit.

The Offer represents a premium of 24.3% from the closing price of the Units on the TSX on August 8, 2008 (the last trading day before AMG made public its proposal to the Board of Trustees). AMG believes this is a compelling offer, made at an attractive premium that will provide unitholders with the opportunity to receive cash proceeds for their investment.

Lock Up Agreements

AMG has entered into Lock-up Agreements with 13 parties whereby the Lock-up Unitholders have agreed to tender all Units held by them, or over which they exercise control or direction, to the Offer. Six members of senior management have executed Lock-up Agreements. Under the terms of the Lock-up Agreements, the Lock-up Unitholders have the right to support or tender their Units to another transaction which exceeds the price or value under the Offer, subject to the right of the Offeror to match such transaction in accordance with the terms of such agreements. The Lock-up Agreements constitute "Permitted Lock-up Agreements" within the meaning of the Rights Plan. Copies of the Lock-up Agreements are available for review at www.sedar.com.

AMG does not intend to support any alternative transaction.

AMG is a company controlled by Michael Andlauer, the President and Chief Executive Officer of the General Partner of ATS Andlauer Transportation Services Limited Partnership ("ATS Andlauer LP"). AMG's office is located at Suite 600, 190 Atwell Drive, Etobicoke, Ontario M9W 6H8. ATS is an open-ended trust that holds, indirectly, securities of ATS Andlauer LP. AMG owns directly or indirectly Units of ATS or other securities exchangeable for Units of ATS which, assuming the exchange of such securities, would represent approximately 25.3% of the outstanding Units.

ATS's units trade on the Toronto Stock Exchange under the symbol ATS.UN.

For more information, please contact Peter Jelley at National Bank Financial Inc. at (416) 869-6509. To obtain a copy of the report filed with the Canadian securities regulatory authorities in connection with this press release or the Lock-up Agreements, please contact Andrea Brewer at (416) 216-1917.

This press release does not constitute an offer to purchase any securities. Any such offer will be made pursuant to the take-over bid circular referred to above. Certain statements contained in this press release concerning AMG's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of ATS are forward-looking statements. The words "believe", "expect", "intend", "may", "anticipate", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements are not based on historical facts, but rather on current expectations, assumptions and projections about future events including interest rates, expected growth, market conditions, business prospects and opportunities. While AMG considers these factors and assumptions to be reasonable based on information currently available, they may be proven to be incorrect.

Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, failure to satisfy the terms and conditions of the Offer; risks related to the structure of ATS and tax related risks; general economic conditions; the competitive environment; reliance on major customers and contract renewals; dependence on personnel; labour relations; insurance matters; reliance on information technology; reliance on third party transportation providers; exposure to litigation; weather conditions; the regulatory environment; environmental considerations; potential unknown liabilities; capital expenditures; leverage and restrictive covenants; availability of future financing; ability to sustain and manage growth; dependence on external funding sources; and liability and other claims asserted against ATS. A number of these risks, and additional risks, are described in ATS's Annual Information Form dated March 28, 2008 for the year-ended December 31, 2007, which is available for review at www.sedar.com. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

All of the forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments will be realized. Forward-looking statements are given only as at the date hereof and AMG disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact Information

  • National Bank Financial Inc.
    Peter Jelley
    (416) 869-6509