NAPEC Inc.
TSX : NPC

NAPEC Inc.

June 02, 2015 15:34 ET

NAPEC Inc. Completes $7.5 Million Bought Deal Private Placement

DRUMMONDVILLE, QUEBEC--(Marketwired - June 2, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES

NAPEC Inc. ("NAPEC" or the "Corporation") (TSX:NPC) announces that it has completed a bought deal private placement, as previously announced on May 5, 2015, of 8,333,334 units of the Corporation (the "Units") at a price of $0.90 per Unit for gross proceeds of $7.5 million (the "Offering") pertaining to the terms and conditions of an underwriting agreement entered into between the Corporation and Laurentian Bank Securities Inc. (the "Underwriter") dated as of June 1st, 2015.

Each Unit is comprised of one common share and one common share purchase warrant (the "Warrant"). Each Warrant entitles its holder to subscribe for one common share at a price of $1.25 at any time during the 24-month period following the closing of the Offering. The Warrants are also subject to an early expiry if, at any time after September 30, 2015, the published closing trading price of the common shares of the Corporation on the TSX is equal or superior to $1.45 for any 10 consecutive trading days. Under such circumstances, the Corporation may give the holder a written notice that the Warrants will expire at 5:00 p.m. (Montreal time) on the 30th day from the receipt of such notice.

The net proceeds of the Offering will be used for working capital and general corporate purposes, to support NAPEC's organic growth as part of executing its strategic plan. The securities underlying the Units will be subject to a hold period of four months and one day from the closing date as provided under securities regulations which will expire on October 3, 2015.

In consideration for the services rendered in connection with the Offering, the Underwriter received a cash commission equal to 5.5% of the gross proceeds of the Offering.

Insiders have also subscribed for a total of 1,210,777 Units in connection with the Offering. These operations constitute "related party transactions" within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions ("Regulation 61-101"). However, the directors of the Corporation who voted in favour of the Offering have determined that the exemptions from formal valuation and minority approval requirements provided for, respectively, under subsections 5.5(a) and 5.7(1)(a) of Regulation 61-101 can be relied on as neither the fair market value of the Units issued nor the fair market value of the consideration paid exceed 25% of the Corporation's market capitalization. None of the Corporation's directors has expressed any contrary views or disagreements with respect to the foregoing.

A material change report in respect of this related party transaction will be filed by the Corporation but could not be filed earlier than 21 days prior to the closing of the Offering due to the fact that the terms of the participation of each of the non-related parties and the related parties in the Offering were not confirmed.

The securities offered under the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. State securities laws and may not be offered or sold, directly or indirectly, within the United States or to or for the account of any U.S. person (as defined in Regulation S under the U.S. Securities Act) without registration or other than under an available exemption from the registration requirements of the U.S. Securities Act or of any applicable U.S. State securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any such securities within the United States or to or for the account of any U.S. person, nor shall there be any sale of the securities in any territory in which such offer, solicitation or sale would be unlawful.

FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management assumes no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.

OVERVIEW OF THE CORPORATION

NAPEC is a corporation operating in the energy sector. The Corporation is a leading service provider to the public utility and heavy industrial markets mainly in Quebec, Ontario, and the eastern United States. NAPEC and its subsidiaries build and maintain electrical transmission and distribution grids, as well as networks for gas utilities. In addition, the Corporation installs gas-powered and electric-powered heavy equipment for utilities, industrial gas power plants, and petrochemical facilities in North America.

Further information regarding NAPEC is available in the SEDAR database (www.sedar.com) and on the Corporation's website at www.napec.ca.

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