MagIndustries Corp.

MagIndustries Corp.

April 20, 2011 09:58 ET

MagIndustries Enters Into Support Agreement With Evergreen Industries Group in Respect of A Proposed $0.25 Per Share Cash Offer

TORONTO, ONTARIO--(Marketwire - April 20, 2011) -MagIndustries Corp. (TSX:MAA)("MagIndustries" or the "Company") announced today that it has entered into a definitive agreement (the "Support Agreement") pursuant to which Evergreen Industries Group ("Evergreen"), a diversified industrial company based in Shanghai, China, has agreed, subject to the terms of the Support Agreement, to make an offer to acquire all the outstanding MagIndustries common shares by way of a friendly take-over bid (the "Offer") for C$0.25 per share in cash, valuing the Company's equity at approximately C$115 million. The Offer represents a premium of approximately 64% to MagIndustries's 20-day volume weighted average trading price of $0.15 on the Toronto Stock Exchange (the "TSX") for the period ending on April 19, 2011.

The Support Agreement provides for, among other things, customary board support and non-solicitation covenants subject to customary "fiduciary out" provisions and a reciprocal non-completion fee of C$3 million, payable if the acquisition is not completed in certain specified circumstances.

In connection with the Offer, all of the directors and officers of MagIndustries have agreed to enter into lock-up agreements with Evergreen pursuant to which they will, among other things, agree to tender of all their MagIndustries shares to the Offer.

The MagIndustries Board of Directors, after consulting with its financial and legal advisors, has unanimously determined that the Offer is fair and in the best interests of the MagIndustries shareholders and to recommend acceptance of the Offer. BMO Capital Markets, the financial advisor to the MagIndustries Board of Directors, has provided an opinion that the Offer is fair, from a financial point of view, to the MagIndustries shareholders. The Board of Directors has also deferred the Separation Time of the Rights (as such terms are defined in the Company's Shareholder Rights Plan) in respect of the Offer and will, immediately prior to the expiry of the Offer, waive or suspend the operation of the Shareholder Rights Plan in respect of the Offer.

Gerard Munera, Chairman of MagIndustries, commented, "Over a period of several years, MagIndustries has thoroughly reviewed, analyzed and assessed all the possible options for the Company to finance the Mengo project and we have now come to the conclusion that the Evergreen's offer is the best available option to our shareholders and to the Company. We are delighted that a company of the financial and technical strength of Evergreen is going to take the Mengo project to the next stage of its development."

Full details of the Offer will be included in the formal offer and take-over bid circular to be mailed to MagIndustries shareholders by Evergreen in mid-May 2011. The Offer will be open for acceptance for a period of not less than 35 days following commencement of the Offer and will be conditional upon, among other things, valid acceptances of the Offer by MagIndustries shareholders holding not less than 66 2/3% of the outstanding MagIndustries shares. In addition, the Offer will be subject to certain customary conditions, including receipt of the relevant government and regulatory approvals and the absence of any material adverse change with respect to MagIndustries. The obligation of Evergreen to take up and pay for shares pursuant to the Offer is also subject to the receipt of certain Chinese Government approvals. Evergreen may choose to waive the conditions of the Offer in certain circumstances.

About MagIndustries Corp.

MagIndustries is a Canadian company whose common shares are listed on the TSX and trades in Canadian currency under the symbol "MAA". The Company has 456,772,463 shares outstanding on an undiluted basis. MagIndustries is focused on the development of its potash assets in the Republic of Congo. More information on the Company is available on its website,

About Evergreen Industries Group

Evergreen Industries Group is an industrial holding group based in Shanghai, China with a focus on the fields of shipbuilding, marine engineering, mining and logistics.

Except for historical information, this press release contains forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, changing market conditions, and other risks detailed from time-to-time in the Company's ongoing filings. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.

Cusip: 55917T 102

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