Nordex Explosives Ltd.

Nordex Explosives Ltd.

August 05, 2016 15:27 ET

Nordex Explosives Announces INCREASE in OFFER PRICE From EPC Groupe to $0.22 for Each Nordex Share

KIRKLAND LAKE, ONTARIO--(Marketwired - Aug. 5, 2016) -


Nordex Explosives Ltd. ("Nordex" or the "Company") (TSX VENTURE:NXX) is pleased to announce that Société Anonyme d'Explosifs et de Produits Chimiques ("EPC") has agreed to increase its offer price to $0.22 per share in connection with the previously announced "going private transaction" with the Company (together with the previously announced "change of control transaction", the "EPC Transactions"). For further details regarding the EPC Transactions, please see the Company's news releases of June 15, 2016, July 18, 2016 and July 28, 2016 and its management information circular dated July 25, 2016 (the "Circular"), copies of which are available on under the Company's profile.

The increased price offered by EPC to Nordex shareholders matches the cash consideration offered by Omnia Holdings Limited through its mining division ("BME") under its unsolicited take-over bid to acquire Nordex announced on August 3, 2016. In addition to offering shareholders the same cash consideration as the BME offer, the EPC Transactions offer considerable benefits and advantages to Nordex and its stakeholders, including allowing Nordex shareholders to realize immediate and certain cash value for their shares without delay, contrary to the BME offer.

Jim O'Reilly, Chairman of the Board of Nordex, stated "We believe this agreement to improve the 'going private transaction' price reflects the commitment EPC has made throughout this process to the long-term success of the Company and underscores the Board's belief that the EPC Transactions are in the best interests of the Company and its shareholders."

Olivier Obst, Chairman and CEO of EPC stated, "EPC Groupe strongly believes that the EPC Transactions, which have been strenuously negotiated with Nordex, are in the best interest of all parties, including Nordex and its stakeholders. We will continue to monitor any developments with Omnia carefully and remain firmly committed to completing these transactions."

The EPC Transactions will be considered and voted on at the upcoming annual and special meeting of shareholders of Nordex (the "Meeting") to be convened on August 18, 2016. Nordex shareholders are encouraged to vote as soon as possible FOR the EPC Transactions following the directions and various mechanisms as described on the form of proxy or voting instruction form which accompanies the Circular. To ensure that your vote is counted, shareholders will need to vote at least 48 hours before the time of the Meeting. If you have any questions or need assistance voting your proxy, please contact D.F. King, our proxy solicitation agent, by telephone at 1-800-761-6707 (toll free in North America) or 1-201-806-7301 (Collect Outside North America), or by email at

While the Company appreciates the interest that BME has shown in Nordex, it is disappointed in the approach taken by BME in resorting to personal attacks against members of the Board of Nordex and in continuing to issue misleading statements. Although Nordex believes there is no value for shareholders in engaging in a campaign of "finger pointing", the Company is compelled to take this opportunity to correct a number of inaccuracies set out in BME's take-over bid circular dated August 3, 2016, BME's press release dated the same date as well as previous BME press releases dated July 20, 2016 and July 14, 2016. Set out below is our response to some of the misleading claims made by BME, as well as an outline of the significant benefits to Nordex shareholders and other stakeholders if the EPC Transactions are approved at the Meeting:

  • BME offer to shareholders is NOT at a Premium to EPC's offer: Since EPC has agreed to pay $0.22 per share pursuant to the "going private transaction", the BME offer does not a represent any premium to the EPC "going private transaction".
  • Benefits to the Kirkland Lake community: BME has repeatedly claimed that its offer will benefit the local Kirkland Lake community but has not provided shareholders with any tangible information as to how this would be accomplished. In fact, BME has been adamant that even its previous proposals to inject ruinous amounts of debt into the Company are now off the table, with no details forthcoming as to how BME plans to fund the Company so it can continue its growth plans. In contrast, in addition to the cash consideration offered to shareholders for their common shares, EPC has also committed to inject approximately $5,000,000 in equity into Nordex in order for Nordex to pay out its high-cost debt and for working capital and investments, and EPC has committed a further $780,000 in low-cost loans, all in order to ensure the Company's long term survival in the community. EPC has been willing to legally commit to Nordex and its stakeholders in a way that is fair and sustainable, while BME has offered no workable solutions of its own.
  • Shareholders realize immediate and certain value under the EPC offer: BME repeatedly touts its "all-cash consideration" as an advantage of its offer, yet the EPC Transactions have always offered Nordex shareholders all-cash consideration well before BME launched its bid. The EPC Transactions can be completed immediately after the Meeting on August 18, 2016, without any undue delay.
  • BME's Offer will likely be open for more than 35 days: BME claims that its offer can be expected to be "able to be closed" shortly after September 9, 2016. However, with its offer conditional upon at least 66 2/3% of the outstanding shares tendering to the offer, it would require that approximately 13.6 million of the approximately 20.5 million outstanding shares be tendered to its bid before any shares can be taken up. BME's offer is also conditional upon the receipt of regulatory approvals including the prescribed time periods under the Investment Canada Act (the "ICA") having elapsed. BME has disclosed that it is not required to take up any shares until 5 days after the standard 45 day period has elapsed from the date BME's notice is accepted by the applicable Minister under the ICA. In contrast, the required regulatory approvals for the completion of the EPC Transactions, including confirmation that the authorities under the ICA have received the required notice from EPC, have either been obtained or are well underway, clearing the way to complete the EPC Transactions immediately after August 18, 2016 if approved by the shareholders.
  • BME Falsely Claims the EPC Transactions put Nordex Shareholders at Risk: Perhaps the most troubling statements made by BME to date relate to the "change of control transaction", which involves the injection of approximately $5,000,000 of new equity in Nordex, the proceeds of which are to be used to repay high-interest debt and for working capital and investments. If the "change of control transaction" is completed, Nordex and its shareholders, employees, customers, suppliers and other stakeholders will benefit from a clean balance sheet and a strong international partner that understands its business and can provide synergies, operational support and assistance with opening new markets, even if the "going private transaction" is not completed.
  • Change of control transaction is NOT dilutive: It is highly misleading for BME to suggest that the offering price of $0.12 per share for the new equity injection for Nordex under the "change of control transaction" is dilutive to shareholders when the price per share represents a 33.3% premium to the closing price of the common shares on the day prior to the announcement of the "change of control transaction" and an approximately 73% premium to the weighted average closing price for the 30 day period prior to such announcement. BME seems to suggest that Nordex shareholders would somehow receive the proceeds of the private placement or that someone else will provide Nordex with equity financing at a higher price - something BME is not proposing to do. In fact, the significant cash injection that EPC will make in Nordex is in addition to the cash consideration of $0.22 per share to be received by Nordex shareholders for their common shares. The proceeds of the equity financing will be used by Nordex to repay its high-interest unsecured debt as well as certain secured bank debt facilities, with the remainder of approximately $2.4 million to be used for working capital and investments.
  • EPC's Cash Commitment of $10.7 million to Nordex is more than double that of BME: BME's circular states that if all of the outstanding common shares of Nordex are taken up under its offer, BME's aggregate commitment would be approximately $4.9 million. In contrast, pursuant to the EPC Transactions, EPC has also committed to pay Nordex shareholders $4.9 million for their shares plus approximately $5,000,000 in new equity financing as well as $780,000 in low-cost loans, for an aggregate amount of approximately $10.7 million.
  • BME is putting Nordex shareholders and the Company at serious risk: BME is urging Nordex shareholders to vote against the EPC transactions at the Meeting. If BME is successful in its solicitation and the EPC Transactions are not approved on August 18, 2016, Nordex and its shareholders will be left at the mercy of BME and the conditions of its offer, including that 662/3% of the outstanding common shares are tendered to the offer and regulatory approvals and other consents are obtained. It is very important that the Company's stakeholders understand that BME is under no obligation to waive the conditions of its offer or to extend the offer upon its expiry. There is no assurance that the BME offer will be capable of being completed without undue delay, or at all, which will leave Nordex in a much worse position if it could not find alternate funding.

With the meeting date of August 18, 2016 fast approaching, either one or both of the EPC Transactions can be completed long before BME is permitted to take up any shares under its offer.

For all of the foregoing reasons shareholders are strongly encouraged to not jeopardize the immediate and certain value offered to Nordex and all of its stakeholders and VOTE FOR the EPC Transactions, and to not tender any of their shares to (or take any other action in respect of ) the BME offer until the outcome of the Meeting is known.

Shareholder Meeting

The annual and special meeting of shareholders of Nordex will be held at the offices of Wildeboer Dellelce LLP, Suite 800, Wildeboer Dellelce Place, 365 Bay Street, Toronto, Ontario, on August 18, 2016 commencing at 10:00 a.m. (Toronto time). Shareholders are encouraged to attend the Meeting in person or to vote their common shares by completing and submitting the form of proxy accompanying the Circular. If a shareholder is not registered as the holder of their common shares but holds them through a broker or other intermediary, they should follow the instructions provided by their broker or other intermediary to vote their common shares.

About EPC

EPC Groupe (, a pioneer in France in manufacturing and distributing industrial explosives, is one of the leading independent players in the core business of explosives and drilling and blasting in Europe, the Middle East and Africa. With total annual revenues of approximately Cdn$480,000,000 and over 1,800 employees, the EPC Groupe is currently active in more than 20 countries around the world. For over 120 years, the EPC Groupe has been committed to providing solutions for its customers: geographically, technically and commercially. This commitment is demonstrated both by its global and expanding presence as well as by its development of innovative technologies. For Olivier Obst, Chairman and CEO of EPC, "the integration of Nordex within the EPC Groupe is a synergy driven operation. It is a unique opportunity as it will both allow EPC to develop its presence in North America and will provide Nordex with a wider range of technologies, products and services in order to consolidate its existing activity and access new market segments."

About Nordex Explosives

Nordex Explosives Ltd. is a Canadian based manufacturer and distributor of explosives for the mining, quarry and construction industries since 1970. Its manufacturing operations and distribution centre is strategically located in one of the world's largest mining regions near Kirkland Lake, Ontario. Nordex is the exclusive supplier of the "Buttbuster" perimeter control explosive products in Canada. Additional information can be found at

Disclosure Regarding Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of applicable securities legislation relating to the BME offer, and to the proposal to complete the EPC Transactions and associated transactions, including statements regarding the terms and conditions of the EPC Transactions and the use of proceeds from the completion of the change of control transaction. The information about EPC contained in this press release has not been independently verified by Nordex. We use words such as "might", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "forecast" and similar terminology to identify forward looking statements and forward-looking information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and information and accordingly, readers should not place undue reliance on such statements and information. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. In evaluating forward-looking statements and information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward looking statements and forward-looking information depending on, among other things, the risks that the one or both of the EPC Transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities or that the parties determine not to proceed with one or both of such transactions) or that the BME offer will be completed in a manner outlined in BME's circular. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, EPC, or their respective financial or operating results (as applicable).

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

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

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

All information contained in this press release relating to EPC was provided by EPC to Nordex for inclusion herein. Nordex has not independently verified such information and shall bear no liability for any misrepresentation contained therein.

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