Cervus Equipment Corp.
TSX : CVL

July 03, 2012 16:14 ET

Cervus Equipment Corporation Announces $30 Million Public Offering of Convertible Debentures

CALGARY, ALBERTA--(Marketwire - July 3, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Cervus Equipment Corp. (TSX:CVL) ("Cervus" or the "Company") today announced that it has entered into an agreement with a syndicate of underwriters led by Raymond James Ltd. pursuant to which the underwriters will purchase $30 million principal amount of convertible unsecured subordinated debentures at a price of $1,000 per debenture. Cervus has also granted the underwriters an over-allotment option to purchase up to an additional $4.5 million aggregate principal amount of debentures for a period of 30 days following closing to cover over-allotments.

The convertible debentures will mature on July 31, 2017 and will accrue interest at the rate of 6.0% per annum payable on a semi-annual basis. At the holder's option, the convertible debentures may be converted into common shares in the capital of Cervus at any time up to the maturity date. The conversion price, subject to adjustment in certain circumstances, will be $26.15 for each common share, being the conversion rate of approximately 38.2409 common shares for each $1,000 principal amount of convertible debentures.

The convertible debentures will be direct, unsecured obligations of Cervus, subordinated to other indebtedness of the Company for borrowed money and ranking equally with all other unsecured subordinated indebtedness.

The convertible debentures will not be redeemable before July 31, 2015. From July 31, 2015 through the maturity date, Cervus may, at its option, redeem the convertible debentures, in whole or in part, at par plus accrued and unpaid interest provided that the weighted average trading price of the common shares on the Toronto Stock Exchange during a specified period prior to redemption is not less than 125% of the conversion price.

Subject to specified conditions, Cervus will have the right to repay the outstanding principal amount of the convertible debentures, on maturity or redemption, through the issuance of common shares of the Company. Cervus also has the option to satisfy its obligation to pay interest through the issuance and sale of additional common shares of the Company.

Cervus will use the net proceeds of the offering initially to repay existing indebtedness and subsequently to fund future acquisitions and for working capital and general corporate purposes. The actual use of available funds may vary depending on the Company's operating and capital needs from time to time and will be subject to the discretion of the management of the Company.

The offering is scheduled to close on or about July 24, 2012 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada, except Quebec.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

About Cervus

Cervus acquires and manages authorized agricultural, commercial, industrial and transportation equipment dealerships in Western Canada through 35 wholly owned dealership locations and a 20% interest in 7 dealership locations, primarily in Alberta, Saskatchewan and Manitoba. Cervus holds an approximate 60% equity interest in Agriturf Limited, a New Zealand-based corporation that offers authorized John Deere equipment, parts and service in the Manawatu, Rotorua, Hawke's Bay and Taranaki regions. Cervus also holds an approximate 30% equity interest in Windmill Ag Pty Ltd., an Australian-based agricultural machinery dealership that offers John Deere equipment, parts, and service in the Hamilton, Terang, Leongatha and Ballarat regions. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick, Nissan and Doosan material handling equipment; and Peterbilt transportation equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL".

Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates, including assumptions relating to the timing of and the Company's ability to successfully complete the offering; that all approvals for the offering will be received; and that there will be no events that trigger termination rights under the agreement with the Underwriters. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, that the Company will be unable to receive approvals required for the offering; that the offering will not be completed in the expected timeframe or at all, risks relating to changes in the market and other risk factors listed from time to time in the Company's public filings. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Cervus does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cervus Equipment Corp.
    Graham Drake
    President and CEO
    (403) 567-2095
    (403) 567-0392 (FAX)
    gdrake@cervuscorp.com

    Cervus Equipment Corp.
    Randy Muth
    Chief Financial Officer
    (403) 567-2097
    (403) 567-0392 (FAX)
    rmuth@cervuscorp.com