People Corporation

People Corporation

November 01, 2017 16:46 ET

People Corporation Announces Agreement to Acquire Assurances Dalbec and $22 Million Bought Deal Private Placement Common Share Offering

Dalbec's Extensive Expertise and Strong Presence in the Quebec Market Significantly Enhances People Corporation's Existing Operations, Positioning it as a Market Leader in this Large and Highly Attractive Market

WINNIPEG, MANITOBA--(Marketwired - Nov. 1, 2017) -


People Corporation (TSX VENTURE:PEO) (the "Company") announced today that it has entered into a definitive agreement to acquire the assets and business operations of Assurances Dalbec Ltée and related entities ("ADL"), one of the leading Third Party Administrator (TPA) and Third Party Payor (TPP) service providers for employee benefit plans of small and medium-sized companies in the Quebec market (the "Transaction"). Founded in 1975 by Louis Dalbec and Bernard Dalbec, ADL is based in Montreal, Quebec. Following the closing of the Transaction, People Corporation will continue to operate the business in Quebec as Assurances Dalbec ("Dalbec").

Laurie Goldberg, Chairman and CEO of People Corporation, commented, "We are very excited to announce the acquisition of Dalbec, our largest transaction to date in the Quebec market, and an outstanding complement to our existing SourceSanté Plus / HealthSource Plus operations. The addition of Dalbec to the People Corporation family is a game-changer for our presence in the Quebec market, the second largest employer market in the country." Mr. Goldberg continued, "We are very pleased to welcome Louis and the Dalbec team into the People Corporation family. We look forward to building upon the strong reputation and relationships that Dalbec has in the region, to continue to grow the People Corporation business in this very important market."

Louis Dalbec added, "After building ADL for 40-plus years, the timing was right for me to find a partner to work with to continue to grow the business. I have known People Corporation for many years, and am confident of the strong fit for ADL's clients, suppliers, employees and all other stakeholders. We share a commitment to client service and creative solutions, and our clients will continue to benefit from this approach, while gaining access to a broader product and service suite that can be offered by a large organization." Mr. Dalbec, along with all of the management and staff, will continue on with the Dalbec business after the closing of the Transaction.

Highlights of the Transaction include:

  • Significantly enhances the Company's market position and service offering in the Quebec market by adding a business that complements the Company's existing operations in Quebec, SourceSanté Plus / HealthSource Plus
  • Another addition to the Company's portfolio of TPA businesses, further building its position as one of the largest group benefits TPAs in Canada, and providing further opportunities related to supplier relationships, integration and technology investments
  • Dalbec's offering focused on the small group market, PME+, represents another option in the Company's expanding portfolio of solutions available to the small group segment of the market
  • The approach to providing innovative and high-quality service and advice to its clients that ADL has taken over the past 42 years to build its excellent reputation upon will be maintained, and People Corporation is excited to continue this legacy
  • Transaction expected to be immediately accretive to the Company's earnings

Dalbec provides consulting, third party administration and third party payor services related to the employee group benefits plans of hundreds of Quebec-based small and medium-sized businesses, as well as union groups. Dalbec services its client base both directly and through relationships with third party brokers. ADL's co-founder and President, Louis Dalbec, and its management team and staff, bring significant experience in the group benefits market, and have used their deep knowledge and expertise to grow ADL into one of the leaders in the Quebec TPA market.

People Corporation has agreed to purchase the assets of ADL for $16.1 million, subject to post-closing adjustments. Of the total purchase price, $11.3 million will be paid on closing of the Transaction, with the balance to be paid by way of deferred payments following the first, second and third anniversaries of the closing. The deferred payments are subject to potential adjustment related to the financial performance of the business over that period. Closing of the Transaction, which is subject to customary conditions, is expected to occur prior to the end of the Company's fiscal second quarter.

Bought Deal Private Placement Common Share Offering

In connection with the Transaction, the Company has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc. (collectively the "Underwriters") pursuant to which the Underwriters have agreed to purchase on a bought deal private placement basis, 3,284,000 common shares (the "Shares") at a price of $6.70 per Share (the "Issue Price"), for gross proceeds to the Company of approximately $22 million (the "Offering"). The Underwriters have also been granted an option, exercisable in whole or in part at any time prior to the closing date of the Offering (the "Offering Closing Date"), to purchase for resale up to an additional 15% of the Shares sold pursuant to the Offering at the Issue Price, which would result in additional gross proceeds of approximately $3.3 million.

The Offering is scheduled to close on or about November 22, 2017. The Company intends to use a portion of the net proceeds of the Offering to fund the acquisition of the assets of ADL, with the balance to be used to repay indebtedness and fund growth initiatives. The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and any applicable securities regulatory authorities. The Underwriters have agreed to endeavour to arrange for substituted purchasers for the Shares. The Company will pay the Underwriters a cash commission equal to 5% of the gross proceeds of the Offering.

This press release does not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction. The common shares will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for account or benefit of, U.S. persons, absent registration or applicable exemption from the registration requirements. Any public offering of securities in the United States must be by means of a prospectus containing detailed information about the Company and management as well as financial statements.

Amendment to Credit Facility

Related to the Transaction, the Company's existing credit facility will be amended to increase the availability under the various components of the facility. More specifically, total availability under the facility will be increased to approximately $83 million, with an additional $15 million available through the 'Accordion' feature that remains in place, providing the Company with significant capacity as it continues to pursue additional acquisitions as part of its growth strategy.

Mr. Goldberg concluded, "This acquisition is strategically significant for our TPA business, not only in Quebec, but across the country, given the additional scale and capabilities associated with it. Our acquisition of Dalbec represents our third transaction this calendar year, strong evidence of the momentum in our growth strategy. Our acquisition pipeline remains robust, and we are well-positioned with a strong team, significant capital, and an exceptional reputation for working with our partners to structure transactions that achieve all parties' objectives."

About People Corporation

People Corporation is a national provider of group benefits, group retirement and human resource services. The Company has offices across Canada; each led by a team of experts and backed by the resources of a national company that is traded on the TSX-V. The Company's industry experts provide uniquely valuable insight while customizing an innovative suite of services to the specific needs of its clients. Whatever your sector, whatever your scale, putting People Corporation's expertise and proven track record to work will make a difference to your people and your bottom line. Further information is available at

Forward-Looking Information

This news release contains "forward-looking statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", "intends", "likely", or other words of similar effect may indicate a "forward-looking" statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at Those risks and uncertainties include the ability to maintain profitability and manage organic or acquisition growth, reliance on information systems and technology, reputation risk, dependence on key clients, reliance on key professionals and general economic conditions. Many of these risks and uncertainties can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on its behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.

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 press release.

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