Enterprise Capital Corporation
TSX VENTURE : ECE.P

September 09, 2010 17:31 ET

Enterprise Capital Corporation Announces Revised Terms of Merger Transaction With Silverock Holdings Inc.

EDMONTON, ALBERTA--(Marketwire - Sept. 9, 2010) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN

Enterprise Capital Corporation (TSX VENTURE:ECE.P), a capital pool company ("Enterprise" or the "Company"), is pleased to announce that it has entered into a amended and restated letter of intent dated September 8th, 2010 (the "Agreement") pursuant to which it will acquire all of the issued and outstanding common shares (the "Silverock Shares") in the capital of Silverock Holdings Inc. ("Silverock"), a privately held British Columbia corporation. The proposed transaction (the "Transaction"), which the Company initially announced via a news release dated June 16, 2010, will constitute the Company's Qualifying Transaction pursuant to TSX Venture Exchange (the "Exchange") Policy 2.4 concerning capital pool companies. The Transaction is an Arms Length Qualifying Transaction.

The Agreement has been amended to reflect (i) an increase in the aggregate deemed purchase price of Enterprise Shares (as defined below) to be acquired by holders of Silverock Shares to $152,057,063 and (ii) an increase in the amount of the Private Placement (as defined below) to $80 million. See paragraphs (d) and (g) under the heading "Terms of the Transaction" below.

Terms of the Transaction

Subject to certain conditions, including, but not limited to, the receipt of all requisite approvals, including that of the Exchange, the parties will enter into a definitive agreement setting forth the terms and conditions by which Enterprise will acquire, by way of amalgamation, plan of arrangement or other form of business combination, all of the issued and outstanding Silverock Shares which, together with the steps outlined below will constitute the Transaction. As of closing of the Transaction:

  1. The initial seed capital investors in Enterprise will arrange to transfer, within escrow, if applicable, an aggregate of 3,400,000 common shares in the capital of Enterprise (the "Enterprise Shares") to shareholders of Silverock, each of which will be a principal of the Resulting Issuer (as defined in Exchange Policy 2.4) upon completion of the Transaction, at a price of $0.10 per share (the "Acquired Seed Shares").
  2. 425,000 of the outstanding 700,000 options to acquire Enterprise Shares at an exercise price of $0.20 per share (the "Enterprise Options") will be exercised by the holders thereof, with the balance of the outstanding Enterprise Options (275,000 options) being cancelled.
  3. Enterprise will issue 175,000 Enterprise Shares (on a pre-consolidation basis, as described below) to Macquarie Private Wealth as a finder's fee at an aggregate deemed purchase price of $59,937.50.
  4. After giving effect to the share consolidation described below, and inclusive of the Silverock Shares to be issued pursuant to the Private Placement (as defined below), holders of Silverock Shares will receive Enterprise Shares at an aggregate deemed purchase price of $152,057,063.
  5. Enterprise Shares will be consolidated at a ratio which takes into consideration the issue price of Silverock Shares under the Private Placement. Assuming an issue price of $1.00 per Silverock Share, Enterprise Shares will be consolidated at a ratio of 1 to 0.3425 which means that for every 2.92 pre-consolidation Enterprise Shares held, Enterprise shareholders will receive one (1) post-consolidation Enterprise Share. Regardless of the consolidation ratio selected, the aggregate value to holders of Enterprise Shares (excluding the holders of the Acquired Seed Shares) will be approximately $925,000 in shares of the Resulting Issuer. Holders of Enterprise Shares (excluding the holders of the Acquired Seed Shares) shall hold approximately 0.6% of the outstanding shares of the Resulting Issuer. 
  6. It is a condition to closing the Transaction that, prior to or concurrently with the closing of the Transaction, Silverock will have completed a business combination (the "Business Combination") with two privately held agricultural corporations engaged in specialty crop processing and distribution (together "Agrico"). The terms and conditions of the Business Combination are subject to ongoing negotiation and shall be set forth in a definitive agreement to be entered into between Silverock and Agrico prior to the closing the Transaction.
  7. It is also a condition to closing the Transaction that prior to or concurrently with the closing of the Transaction, Silverock will complete a brokered private placement of its securities for aggregate gross proceeds of approximately $80,000,000 (the "Private Placement"). The private placement will be brokered by a syndicate of agents led by Cormark Securities Inc. The proceeds from the Private Placement shall be used to fund the cash portion of the purchase price payable for Agrico, a majority investment in a canola crushing business and for general corporate purposes. The terms of the Private Placement, including the compensation payable to the syndicate of agents, will be reflected in a definitive agency agreement to be entered into prior to closing the Transaction. Silverock Shares issued pursuant to the Private Placement will be exchanged for Enterprise Shares at the exchange ratio described in subparagraph (d) above.
  8. Upon completion of the Transaction, the Resulting Issuer will take steps to change its name to "Silverock Inc." and, if deemed appropriate by its board of directors and assuming it complies with all minimum listing requirements, the Resulting Issuer may also apply to move its listing to the Toronto Stock Exchange.

The completion of the Transaction is subject to certain conditions, which include, but are not limited to, the following: (i) the approval of applicable regulatory authorities including the Exchange, (ii) the completion of due diligence by the parties, (iii) the negotiation and execution of the required definitive agreement(s), (iv) certain approvals of the shareholders of the Company, (v) receipt of all necessary third party consents, and (vi) completion by Silverock of the Private Placement and Business Combination.

Silverock Holdings Inc.

Silverock, a newly incorporated entity under the Business Corporations Act (British Columbia), is a growth-oriented company focused on the value added processing of agricultural commodities for distribution and sale throughout North America and globally. Silverock's initial operations will consist of two complimentary lines of business: (i) specialty crop processing and distribution through wholly-owned subsidiaries, and (ii) canola crushing through a majority ownership position in a canola crushing facility. Going forward, the Resulting Issuer will look to gain operational scale and efficiency in these operations through accretive acquisitions, investments and development activities in North America and internationally.

The board of directors and senior officers of the Resulting Issuer will be finalized and publicly announced prior to the completion of the Transaction.

Sponsorship

In connection with the Transaction, it is the intention of the Company to seek an exemption from the sponsorship requirements set forth in Exchange Policy 2.2. There can be no assurance that the Company will be successful in obtaining such exemption.

Trading Halt

Trading in our stock will remain halted until such time as we release further detailed information concerning the Transaction, including, but not limited to, particulars of the Private Placement, the Business Combination, Silverock and its insiders, and the insiders of the Resulting Issuer. We anticipate releasing such further detailed information promptly upon such information being determined or made available to us. Trading in our stock may remain halted until the Transaction closes or is abandoned.

Cautionary Notes

This news release includes forward-looking statements regarding Enterprise, Silverock and their respective businesses. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this news release, including completion of the Transaction, the Business Combination and the Private Placement, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the agricultural industry, economic factors and the equity markets generally. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Enterprise undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Completion of the Transaction is subject to a number of conditions including, but not limited to, satisfactory completion of due diligence investigations, completion of definitive agreements, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed, or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S. Person" (as such term is defined in Regulation S under the US. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of the Company. The securities to be issued in connection with the Private Placement have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a US. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Enterprise Capital Corporation
    Glen Murphy
    President, Chief Executive Officer, Chief Financial Officer
    and Secretary
    (403) 660-3933