Pacific Safety Products Inc.
TSX VENTURE : PSP

Pacific Safety Products Inc.

December 05, 2016 09:19 ET

Pacific Safety Products Inc. receives unsolicited offer of $0.25 per share from MKU Limited

ARNPRIOR, ONTARIO--(Marketwired - Dec. 5, 2016) - Pacific Safety Products Inc. ("PSP" or the "Company") (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour and personal protection solutions, announced today that it has received an unsolicited offer from an affiliate of MKU Limited ("MKU") to acquire all of the outstanding common shares of PSP, including those issuable upon conversion of PSP's outstanding convertible debentures, for $0.25 in cash per share (the "MKU Offer"). The Board of Directors of PSP (the "Board") is, together with if financial advisor and legal counsel, reviewing the MKU Offer to determine whether it constitutes a "Superior Proposal" as defined in the arrangement agreement between PSP and Med-Eng Holdings ULC, a Canadian wholly-owned subsidiary of Safariland, LLC ("Safariland"), announced on November 10, 2016 (the "Safariland Agreement") and has provided notice of such review to Safariland. At this time, the Board has not changed its recommendation with respect to the pending transaction with Safariland. In order to constitute a Superior Proposal pursuant to the Arrangement Agreement, among other conditions, the Board must determine that the MKU Offer is reasonably capable of being completed without undue delay, taking into account all financial, legal, regulatory and other aspects of the MKU Offer and MKU.

In the event that the Board determines that the MKU Offer constitutes a "Superior Proposal" under the terms of the Safariland Agreement, it will immediately advise Safariland of such determination. Safariland will then have a period of five business days (the "Response Period"), during which it may offer to amend the terms of the Safariland Agreement. However, in such event, Safariland is under no obligation to make such an offer. If, within the Response Period, Safariland offers to amend the Safariland Agreement such that the Board determines that the MKU Offer would cease to be a Superior Proposal, PSP will be required to enter into an amendment to the Safariland Agreement and implement the amended agreement. Subject to the determination of the Board described above, if, within the Response Period, Safariland does not offer to amend the Safariland Agreement, or if the proposed MKU Offer is determined to continue to constitute a Superior Proposal following a proposed amendment to the Safariland Agreement, PSP may accept the MKU Offer, terminate the Safariland Agreement, pay to Safariland the agreed termination fee of $780,000 and enter into a definitive arrangement agreement with MKU (the "MKU Agreement"), all in accordance with the terms of the Safariland Agreement.

The Board cautions that there can be no assurance that the MKU Offer will lead to the termination of the Safariland Agreement and the execution of an arrangement agreement with MKU, or that the transaction contemplated by the MKU Offer will be approved by shareholders or consummated. PSP shareholders and prospective investors are advised to carefully review the Safariland Agreement and consult with their professional advisors before trading in securities of PSP.

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 GH 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.

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 and, in some cases, can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms. The forward-looking events and circumstances discussed in this news release, including statements regarding whether the Board will determine that the MKU Offer constitutes a Superior Proposal, if so, whether Safariland will exercise its right to match the MKU Offer, whether the MKU Offer will be accepted and the Safariland Agreement terminated and, if so, whether MKU and PSP are able to negotiate and execute the MKU Agreement to their mutual satisfaction, and whether all conditions of closing set forth or to be set forth in either the Safariland Agreement or the MKU Agreement (if entered into) will be satisfied and therefore the transaction contemplated thereby will be completed, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.

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

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