EnerCare Inc.
TSX : ECI

EnerCare Inc.

October 20, 2014 09:12 ET

EnerCare Completes Acquisition of Direct Energy's Home and Small Commercial Services Business in Ontario

TORONTO, ONTARIO--(Marketwired - Oct. 20, 2014) -

NOT FOR RELEASE IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

EnerCare Inc. ("EnerCare") (TSX:ECI) and EnerCare Solutions Inc. ("EnerCare Solutions" and with EnerCare, the "Company"), one of Canada's leading providers of energy conservation products and services, announced today that it has completed its previously announced acquisition (the "Acquisition") of the Ontario home and small commercial services business of Direct Energy Marketing Limited ("Direct Energy").

"This is in all respects a transformational acquisition for EnerCare," said John Macdonald, President and CEO of the Company. "The reunification of the two companies gives us full control over our operations and direct access to our customers, ensuring a superior customer experience. Our combined assets, strengths and expertise form the platform of one of the largest home and small commercial services businesses in Canada."

The purchase price of the Acquisition was approximately $550 million, subject to working capital and other adjustments. The Acquisition was financed through a combination of debt and equity, including approximately $317 million from the net proceeds of EnerCare's recent offering of subscription receipts (the "Subscription Receipts"), approximately $124 million from debt facilities entered into in connection with the Acquisition, and approximately $100 million from the private placement of EnerCare common shares ("Shares") to Direct Energy. The 7,602,308 Shares issued to Direct Energy were issued at $13.00, the same price as the Subscription Receipts and are subject to a 12-month lock-up and thereafter, one-half of such Shares will be subject to a further 6-month lock-up.

In accordance with the terms of the agreement pursuant to which the Subscription Receipts were issued, each outstanding Subscription Receipt was exchanged today for one Share, resulting in the issuance of 25,635,525 Shares and a cash payment equal to $0.1208 per Subscription Receipt. The cash payment is equal to the aggregate amount of dividends per Share for which record dates occurred since the issuance of the Subscription Receipts, less any withholding taxes, if any. Trading in the Subscription Receipts has been halted on the Toronto Stock Exchange ("TSX") and EnerCare expects that the Subscription Receipts will be delisted from the TSX after the close of markets today and that the Shares issued in exchange for the Subscription Receipts will immediately commence trading on the TSX.

EnerCare's debt facilities with The Toronto-Dominion Bank and National Bank of Canada are comprised of: (i) a 4-year non-revolving, non-amortizing variable rate term credit facility in the amount of $210 million, which has been drawn for the purpose of financing the Acquisition and re-financing EnerCare Solutions' existing $60 million term loan; and (ii) a 5-year $100 million revolving, non-amortizing variable rate credit facility, which replaces EnerCare Solutions' existing $35 million revolving facility and which is currently undrawn.

Concurrent with the closing of the Acquisition, EnerCare and Direct Energy entered into a transition services agreement pursuant to which Direct Energy will provide certain transition services to EnerCare relating to, among other things, the provision of ongoing information technology, other support and information technology decoupling services for an initial period of 15-months, subject to extension by either party for up to two additional 3-month terms.

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). Statements other than statements of historical fact contained in this news release may be forward-looking statements, including, without limitation, management's expectations, intentions and beliefs concerning anticipated future events, results, circumstances, economic performance or expectations with respect to the Company, including the Company's business operations, business strategy and financial condition. Forward-looking statements may include words such as "anticipates", "believes", "budgets", "could", "estimates", "expects", "goal", "intends", "may", "outlook", "plans", "strive", "target" and "will", although not all forward-looking information contains these words. These forward-looking statements are subject to change as a result of new information, future events or other circumstances in which case they will only be updated by the Company where required by law.

About EnerCare and EnerCare Solutions

EnerCare and EnerCare Solutions (collectively, "EnerCare") is one of Canada's largest home and commercial services companies with more than 900 employees. EnerCare provides water heaters, furnaces, air conditioners and other HVAC rental products, protection plans and related services to approximately 1.1 million customers. EnerCare also owns EnerCare Connections Inc., a leading sub-meter provider, with metering contracts for condominiums and apartment suites in Ontario, Alberta and elsewhere in Canada.

Additional information regarding EnerCare and EnerCare Solutions is available on SEDAR at www.sedar.com or through EnerCare's investor relations website at www.enercareinc.com or www.enercare.ca.

Source: EnerCare Inc.

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