Pacific Safety Products Inc.
TSX VENTURE : PSP

Pacific Safety Products Inc.

January 23, 2012 07:58 ET

Pacific Safety Products Inc. Enters Into Letter of Intent With an Affiliate of Sun Capital Partners to Sell Substantially All of Its Assets

ARNPRIOR, ONTARIO--(Marketwire - Jan. 23, 2012) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or the "Company"), a North American manufacturer of advanced armour and personal protection solutions, today announced that it has entered into a letter of intent with an affiliate of Sun Capital Partners, Inc., an arm's length third party (the "Purchaser") to sell substantially all of its assets on a cash-free, debt-free basis for cash payable at closing (the "Sale Transaction"). During an exclusivity period, the Purchaser will complete a due diligence review, and the parties will endeavor to negotiate a mutually satisfactory definitive purchase agreement.

Faced with a challenging operating environment, management and the board of directors of the Company have concluded the Sale Transaction is in the best interests of the Company and its stakeholders.

If the Sale Transaction closes, it is expected that the Company will have no operating assets, the Company will cease to be a manufacturing company and the Company's common shares will be transferred to the NEX board of the TSX Venture Exchange while it formulates a strategic direction to maximize value for shareholders.

COMPLETION OF THE PROPOSED SALE TRANSACTION IS SUBJECT TO A NUMBER OF CONDITIONS, INCLUDING BUT NOT LIMITED TO TSX VENTURE EXCHANGE ACCEPTANCE AND SHAREHOLDER APPROVAL. THE SALE TRANSACTION CANNOT CLOSE UNTIL THE REQUIRED SHAREHOLDER APPROVAL IS OBTAINED. THERE CAN BE NO ASSURANCE THAT THE SALE TRANSACTION WILL BE COMPLETED AS PROPOSED OR AT ALL. THERE IS ALSO NO ASSURANCE THAT THE NET PROCEEDS OF SUCH A TRANSACTION WILL REPRESENT A PREMIUM TO THE CURRENT TRADING PRICE OF THE COMPANY'S SECURITIES.

INVESTORS ARE CAUTIONED THAT, EXCEPT AS DISCLOSED IN THE MANAGEMENT INFORMATION CIRCULAR WHICH IS TO BE MAILED TO SHAREHOLDERS, ANY INFORMATION RELEASED OR RECEIVED WITH RESPECT TO THE PROPOSED SALE TRANSACTION MAY NOT BE ACCURATE OR COMPLETE AND SHOULD NOT BE RELIED UPON. TRADING IN THE SECURITIES OF THE COMPANY SHOULD BE CONSIDERED HIGHLY SPECULATIVE.

About PSP:

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely®. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems® brand to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.

About Sun Capital Partners, Inc.

Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital affiliates have invested in more than 285 companies worldwide with combined sales in excess of $45 billion since Sun Capital's inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York, as well as affiliates in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen. Sun Capital Partners Sourcing, LLC has dedicated teams in Shanghai and Shenzhen, China, that assist affiliated portfolio companies in developing an offshore sourcing plan. It provides logistical support and works with affiliates to develop their in-house skills to handle this function and maximize their potential savings in sourcing. For more information, please visit www.SunCapPart.com.

For complete consolidated financial statements with notes and management discussion and analysis, refer to SEDAR (www.sedar.com).

Forward-Looking Information: This news release contains certain statements which may constitute "forward-looking information" within the meaning of applicable securities laws. These statements relate to anticipated or assumed events or results including, without limitation, the conditions of closing the Sale Transaction and the anticipated outcomes of closing the Sale Transaction. Forward-looking information is based on estimates and assumptions made by PSP in light of its experience and its perception of historical trends, current conditions and expected future developments as well as management's best judgment based on current facts and assumptions that it considers reasonable including that all necessary third party approvals and other conditions to completion of the Sale Transaction will be satisfied or waived. Although the Company believes that the expectations conveyed by the forward-looking information are reasonable based on information currently available to it, these statements are not guarantees and there can be no assurance that reasonable business people in possession of the same information would reach the same conclusions. Forward looking information involves a number of known and unknown risks, uncertainties and assumptions which may cause actual results or events to differ materially from those stated including the inability to satisfy any of the conditions of closing for the Sale Transaction as well as general industry and market conditions and other factors which are discussed more fully in documents filed by PSP with applicable securities regulatory authorities at www.sedar.com. The Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change, except as required by applicable law.

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

Contact Information

  • Pacific Safety Products Inc.
    Douglas Lucky
    Chief Executive Officer
    (613) 623-6001
    www.pacsafety.com