Prism Medical Ltd.
TSX VENTURE : PM

Prism Medical Ltd.

June 27, 2016 20:38 ET

Prism Medical Ltd. Agrees to Be Acquired by Handicare Group AB

Agreement Provides for All Cash Consideration of $12.50 Per Share

TORONTO, ONTARIO and KISTA, SWEDEN--(Marketwired - June 27, 2016) - Prism Medical Ltd. ("Prism Medical") (TSX VENTURE:PM) and Handicare Group AB ("Handicare") today announced that they have entered into an arrangement agreement (the "Arrangement Agreement") pursuant to which Handicare will acquire all of the outstanding common shares of Prism Medical (the "Prism Medical Shares"). Pursuant to the Arrangement Agreement, shareholders of Prism Medical will receive $12.50 in cash for each Prism Medical Share, which represents a 31.6% premium to the closing price of the Prism Medical Shares on the TSX Venture Exchange (the "TSXV") on June 27, 2016 of $9.50 and a premium of 34.2% to the 20-trading day volume weighted average trading price of the Prism Medical Shares on the TSXV. The total equity purchase price is approximately $62 million on a fully diluted basis.

Handicare is a Sweden based company which supplies technical aids for the elderly and physically disabled. Its products include homecare products (such as stairlifts), patient handling and bathroom safety products, and personal transfer and automobile adaptation solutions. Handicare is owned by Nordic Capital Fund VII.

"The knowledge of our employees applied with passion to solve the moving and handling problems of the mobility disadvantaged and their caregivers in all health environments, has made Prism Medical a leader in its field. Handicare has a similar values profile, has recognized what our team has accomplished, and should add value for all stakeholders as the two companies combine their market leading products and service capabilities," said Andrew McIntyre, Chairman of Prism Medical.

"Through this acquisition Handicare will be able to access greater opportunities in the North American market. In addition, the combined product portfolio will be among the best in the industry and serve as a good platform for further growth," said Johan Ek, Chairman of Handicare.

Transaction Details

The transaction will be carried out by way of a court approved plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement") and will require the approval of, among others, (i) the holders of at least 66 2/3% of the Prism Medical Shares, and (ii) a majority of minority shareholders, present in person or represented by proxy at a special meeting of Prism Medical shareholders (the "Prism Medical Meeting") to be called to consider the Arrangement. The Prism Medical Meeting is expected to be held before the end of August, 2016 with completion of the transaction expected to follow shortly thereafter.

In addition to shareholder and court approvals, the Arrangement is subject to other closing conditions customary in transactions of this nature. The Arrangement is not subject to a financing condition. Directors, senior executive officers and certain shareholders of Prism Medical, who together hold an aggregate of approximately 36% of the issued and outstanding Prism Medical Shares (calculated on a non-diluted basis), have entered into a voting agreement with Handicare and agreed to vote their Prism Medical Shares in favour of the Arrangement at the Prism Medical Meeting.

Under the Arrangement, each holder of Prism Medical Shares will receive $12.50 in cash per Prism Medical Share and each outstanding stock option of Prism Medical will be cancelled at the effective time of the Arrangement in exchange for a cash payment equal to the amount by which the consideration per Prism Medical Share payable pursuant to the Arrangement exceeds the exercise price of such option. The Arrangement Agreement also includes a non-solicitation covenant on the part of Prism Medical, subject to customary "fiduciary out" provisions that entitle Prism Medical to consider and accept a superior proposal and a right in favour of Handicare to match any superior proposal. If the Arrangement Agreement is terminated in certain circumstances, including if Prism Medical enters into an agreement with respect to a superior proposal or if the Board of Directors of Prism Medical (the "Board") withdraws or modifies its recommendation with respect to the Arrangement, Handicare will be entitled to a termination fee of $2,250,000. Full details of the Arrangement will be included in an information circular to be mailed to Prism Medical shareholders in accordance with applicable securities laws.

The Board, after consultation with its financial and legal advisors, unanimously recommends that Prism Medical shareholders vote in favour of the Arrangement. The Board has also received a fairness opinion from Canaccord Genuity Corp. in connection with the Arrangement to the effect that, as of the date of such opinion, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Prism Medical's shareholders pursuant to the Arrangement is fair from a financial point of view.

Complete details of the Arrangement are set out in the Arrangement Agreement, which will be filed by Prism Medical with Canadian securities regulators and will be available for viewing under Prism Medical's profile at www.sedar.com.

Canaccord Genuity Corp. is acting as financial advisor to Prism Medical. Torys LLP is acting as legal counsel to Prism Medical. Fasken Martineau DuMoulin LLP is acting as legal counsel to Handicare.

Unless otherwise stated, all amounts in this news release are expressed in Canadian dollars.

ABOUT PRISM MEDICAL

Prism Medical is a vertically integrated manufacturer and leading provider of equipment and services used to move and handle mobility challenged individuals in a safe and dignified manner. Prism Medical's products are marketed under the brand names of Prism Medical, ErgoSafe, Waverley Glen and Nightingale in the homecare, acute care and long-term care markets throughout North America. Prism Medical offers solutions that encourage improved care, quality of life and mobility, while seeking to lower the overall cost of the caregiving function in a number of ways, including reducing the incidence of handling-related injuries among caregivers. Through its network of dealers, Prism Medical provides an integrated suite of products and services that make homecare a viable option for many people. For further information visit Prism Medical's website at www.prismmedicalltd.com or www.sedar.com.

ABOUT HANDICARE GROUP AB

Handicare was founded in 1986 and supplies technical aids for the elderly and physically disabled. Its products include stairlifts, transfer and lifting products, automobile adaptation solutions and homecare products. Handicare's brand products are distributed through a comprehensive network of professional dealers and distributors in 30 countries around the world. Through its subsidiary Puls, the group is also a market leader in the sale of capital goods and consumables to hospitals and institutions in Norway. Handicare has 950 employees and its headquarters in Kista, Sweden, and has subsidiaries in Norway, Denmark, Germany, the Netherlands, England, Belgium, France, and the US. For more information, please see www.handicare.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information within the meaning of applicable securities laws that reflects the current expectations of management of Prism Medical regarding the Arrangement and its consummation, including whether conditions to the consummation of the Arrangement will be satisfied, and the timing for completing the Arrangement. The words "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "project", "continue", "predict", "potential", or the negative of these terms or other similar expressions have been used to identify these forward-looking statements.

Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond management's control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

The following factors could cause actual results to differ materially from those discussed in the forward-looking information: failure to satisfy the conditions to completion of the Arrangement, including approval by Prism Medical's shareholders and court approval and the occurrence of any event, change or other circumstance that could give rise to the termination of the Arrangement Agreement. Additional risks and uncertainties regarding Prism Medical are described in its most recent financial statements and MD&A which are available on SEDAR at www.sedar.com.

This forward-looking information represents management's views as of the date of this press release. While subsequent events and developments may cause such views to change, Prism Medical does not intend to update this forward-looking information, except as required by applicable securities laws.

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