Organic Resource Management Inc.
TSX VENTURE : ORI

Organic Resource Management Inc.

October 17, 2012 20:15 ET

ORMI Reaches Agreement to Be Acquired for $3.25 Per Share in Cash

TORONTO, ONTARIO--(Marketwire - Oct. 17, 2012) - Organic Resource Management Inc. (TSX VENTURE:ORI) ("ORMI" or "the Company"), today announced it has entered into a definitive arrangement agreement (the "Agreement") with Walker Industries Holdings Limited ("Walker"), pursuant to which Walker proposes to acquire all of the outstanding common shares of ORMI. Under the terms of the Agreement, ORMI shareholders will receive $3.25 per common share in cash, representing a premium of approximately 100% to the volume weighted average price of the common shares on the TSX Venture Exchange over the 30 trading day period ending on October 17, 2012. The transaction will be implemented by way of a court-approved plan of arrangement under the CBCA (the "Arrangement").

The completion of the Arrangement is subject to the approval of ORMI's shareholders at a special meeting which is expected to be held in December 2012. In addition, the Arrangement will require approval by the Ontario Superior Court of Justice. The Arrangement has been approved unanimously by the Board of Directors of ORMI (with interested directors abstaining) following the unanimous recommendation of a Special Committee of independent directors comprised of Matthew Gaasenbeek III and Gary Kain. In doing so, the ORMI Board determined that the proposed Arrangement is fair to ORMI's shareholders and is in the best interests of ORMI and authorized the submission of the Arrangement to shareholders of ORMI for their approval at the special meeting. The ORMI Board has also unanimously resolved (with interested directors abstaining) to recommend to ORMI shareholders that they vote in favour of the Arrangement.

The Arrangement must be approved: (a) by at least 66 2/3% of the votes cast by the holders of common shares at the meeting; and (b) by a simple majority of the votes cast by the disinterested holders of common shares at the meeting, which would exclude, among others, the votes in respect of common shares held by Charles Buehler, the Chairman and CEO of ORMI.

The Special Committee's financial advisor, Duff & Phelps Canada Limited, has provided an opinion to the ORMI Board and the Special Committee dated October 17, 2012 to the effect that based upon and subject to the analyses, assumptions, qualifications and limitations set out therein, as of the date of the opinion the consideration to be received by the shareholders of ORMI in the Arrangement is fair from a financial point of view to the shareholders of ORMI.

Under the Agreement, ORMI is subject to a restriction on its ability to solicit third party proposals, provide information and engage in discussions with third parties. The restriction is subject to a customary "fiduciary out" that allows ORMI, subject to certain conditions, to provide information and participate in discussions with respect to any unsolicited acquisition proposal received which the ORMI Board has determined in good faith would reasonably be expected to result in a transaction more favourable to shareholders, from a financial point of view, than the Arrangement. ORMI has agreed to provide Walker with notice of any superior acquisition proposal and to negotiate with Walker for a period of five business days prior to accepting a superior acquisition proposal. If ORMI terminates the Agreement in order to accept a superior acquisition proposal it must pay to Walker: (i) a fee of $225,539; and (ii) the reasonable documented out-of-pocket expenses actually incurred by Walker in connection with the Arrangement and related transactions subject to a maximum of $400,000.

The Arrangement is not subject to any financing condition but is subject to various customary conditions precedent. The closing of the Arrangement will take place after satisfaction or waiver of all conditions. While the timing associated with satisfying these conditions is not certain, ORMI currently expects the Arrangement to close in the fourth calendar quarter of 2012, subject to the terms of the Agreement.

ORMI has been advised that the directors and senior officers (including Charles Buehler, Chairman and CEO) and another shareholder holding in the aggregate approximately 52.8% of the outstanding common shares of ORMI have entered into voting agreements with Walker to vote the shares of ORMI owned by such shareholders in favour of the Arrangement, subject to the terms and conditions of such agreements.

Copies of the Agreement and certain documents will be filed with the Canadian securities regulators and will be available at the SEDAR website at www.sedar.com. The management information circular in connection with the special meeting of shareholders to be called to consider the arrangement is expected to be mailed to shareholders over the coming weeks. The circular will also be available as part of ORMI's public filings at www.sedar.com.

Forward-Looking Statements

This media release includes certain forward-looking statements within the meaning of applicable securities laws relating to the proposal to acquire all of the outstanding shares of ORMI. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements and therefore subject to unknown risks or uncertainties. The completion of the Arrangement is subject to a number of terms and conditions, including, without limitation: (i) required ORMI shareholder approval, (ii) necessary court approvals, and (iii) certain termination rights available to the parties under the arrangement agreement. These approvals may not be obtained, the other conditions to the Arrangement may not be satisfied in accordance with their terms, and/or the parties to the arrangement agreement may exercise their termination rights, in which case the Arrangement could be modified, restructured or terminated, as applicable. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with a transaction, that the ultimate terms of the transaction will differ from those that are currently contemplated, and that the transaction will not be successfully completed for any reason (including the failure to obtain any required approvals). ORMI does not intend, and disclaims any obligation, except as required by law, to update or revise any forward looking statements whether as a result of new information, future events or otherwise.

About Organic Resource Management Inc.

Organic Resource Management is Canada's largest provider of vacuum truck services for the collection, processing and recycling of food‐related organic residuals into feedstock for biogas renewable energy production. ORMI services in excess of 10,000 grease interceptors for industrial, commercial and institutional food‐industry customers across Canada on a regularly‐scheduled basis. These services are a critical component of current program initiatives in North American landfill waste diversion and wastewater treatment. Further information about ORMI may be obtained at the Company's web site at www.ormi.com.

Neither 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.

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