Discovery Air Inc.
TSX : DA.A

Discovery Air Inc.

October 24, 2016 17:53 ET

Discovery Air Inc. Files Management Information Circular for Proposed Sale of Fire Services Business

TORONTO, ONTARIO--(Marketwired - Oct. 24, 2016) - Discovery Air Inc. ("Discovery Air" or the "Company") (TSX:DA.A), announced that it has filed its Management Information Circular (the "Circular") related to its previously announced agreement to sell its fire services business (the "DAFS Disposition") operated by its wholly-owned subsidiary, Discovery Air Fire Services Inc. ("DAFS"). A special meeting of shareholders (the "Meeting") of the Company is scheduled for Tuesday, November 15, 2016, at 10:00 a.m. (Eastern time) at the Company's head office at 170 Attwell Drive, Suite 370, Toronto, Ontario, M9W 5Z5.

The special independent committee of the board of directors of the Company formed in connection with the DAFS Disposition and all non-interested members of the board of directors of the Company unanimously recommend that Company shareholders vote FOR the transaction resolution approving the DAFS Disposition for the reasons set out in the Circular including, but not limited to:

The consideration to be received by the Company for the DAFS Disposition is fair, from a financial point of view, to the Company and its minority shareholders, based on a third party fairness opinion and is within the formal valuation range.

  • The Company received a formal valuation and fairness opinion from Capital Canada Limited ("Capital Canada") dated September 7, 2016 (the "Formal Valuation and Fairness Opinion"), that the consideration to be received by the Company pursuant to the DAFS Disposition (the "Consideration") is fair, from a financial point of view, to the Company and its minority shareholders. The Consideration is also within the valuation range established by such Formal Valuation and Fairness Opinion.

Proceeds from the DAFS Disposition will allow the Company to pay-down debt and to focus on its remaining businesses.

  • Following the DAFS Disposition, the Company will benefit from a reduction in indebtedness and an increased ability to focus on, and allocate resources to, its remaining businesses.

The low likelihood of alternative transactions being available.

  • The sale process previously undertaken by the Company in respect of DAFS, and the unsuccessful results of such process, led to the conclusion that there was a low likelihood of alternative transactions being available to the Company on acceptable terms.

Support of the Company's Officers.

  • Each of the Company's officers who is a shareholder, representing in the aggregate 4.09% of all voting rights attached to the issued and outstanding common shares of the Company, has entered into a voting and support agreement to vote their shares in favour of the approval of the DAFS Disposition.

Discovery Air encourages Company shareholders to carefully read the Circular as it contains important information, including a full description of the DAFS Disposition, background details on the extensive review and negotiation process undertaken, the detailed reasons behind the special independent committee's recommendation in favour of the DAFS Disposition, as well as the complete third party Formal Valuation and Fairness Opinion prepared by Capital Canada.

The Circular is available on SEDAR at www.sedar.com. The Circular is also being mailed to all shareholders of record. The Company has fixed October 12, 2016, as the record date (the "Record Date") for the purpose of determining Company shareholders entitled to receive notice of and vote at the Meeting or any adjournment or postponement thereof.

Process of Approval

As described in greater detail in the Circular, the approval of the DAFS Disposition will require the affirmative vote of a majority of the votes attached to the Class A shares and the Class B shares of the Company, voting together as one class, held by the Company shareholders present in person or represented by proxy at the Meeting, excluding for this purpose votes attached to Class A shares and Class B shares of the Company held by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions. The DAFS Disposition is also subject to receipt of any necessary regulatory approvals. It is anticipated that the DAFS Disposition will be completed as soon as all conditions have been satisfied or waived.

How to Vote

Registered Shareholders: if you are a registered shareholder, you can vote your shares either by attending the Meeting and voting, or if you cannot attend the Meeting, by having your shares voted by proxy in accordance with the instructions set out on the form of proxy mailed to shareholders who were registered as of the Record Date.

Non-Registered Shareholders: if you are a non-registered shareholder (meaning that your shares are held beneficially on your behalf, or for your account, by an intermediary (i.e. banks, trust companies, securities brokers, clearing agencies, trustees or other nominees)), you should contact your intermediary to determine what documentation the intermediary needs from you in order for you, or someone else appointed by you, to vote your shares at the Meeting.

Votes must be submitted not later than 10:00 a.m. (Eastern time) on November 11, 2016, or if the Meeting is adjourned or postponed, prior to 10:00 a.m. (Eastern time) on the second business day before any adjourned or postponed Meeting.

If you have any questions about the information contained in the Circular, please contact Sheila Venman, the Company's Vice President of Communications, at sheila.venman@discoveryair.com, and if you require assistance in completing your form of proxy, please contact Computershare Investor Services Inc., the Company's registrar and transfer agent, at 1-800-564-6253 or by e-mail at Service@Computershare.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements made in this press release are forward-looking statements (as defined in applicable securities laws). These statements include, without limitation, statements relating to the DAFS Disposition, approval of the DAFS Disposition by majority of the minority shareholders of Discovery Air, the expected timing and impact of the DAFS Disposition, obtaining the required regulatory and shareholder approvals, the time and date of the Meeting, operational and financial benefits expected to result from the DAFS Disposition, Discovery Air's business outlook, objectives, plans and strategic priorities with respect to the remaining businesses, and other statements that are not historical facts.

Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. For a description of relevant assumptions and risks, please consult the Circular, Discovery Air's 2016 Annual Information Form dated April 28, 2016, and Discovery Air's 2016 Second Quarter MD&A dated July 31, 2016, all filed with the Canadian provincial securities regulatory authorities (available at www.sedar.com) and which are also available on Discovery Air's website at www.discoveryair.com. Additional details regarding the DAFS Disposition are disclosed in the Circular.

The forward-looking statements contained in this press release describe our expectations as of the date hereof, and, accordingly, are subject to change after such date. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise.

About Discovery Air

Discovery Air is a global leader in specialty aviation services. We deliver exceptional air combat training, medevac equipped aircraft services, airborne fire services, air charter services, helicopter operations, and transport and logistics support to ensure operational readiness, health, safety and vital lifelines for our clients and the communities we serve.

Discovery Air Fire Services Inc. currently provides, and has provided for almost three decades, aerial fire surveillance, airspace and aircraft management, and air transport services in support of the Ontario government's forest fire management program. As well, DAFS' provides court-related air transport services to a variety of provincial government agencies which operate in northwestern Ontario (carried on by DAFS' charter division, Walsten Air).

Discovery Air's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange (symbols DA.A and DA.DB.A, respectively).

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