SPECTRA PREMIUM INDUSTRIES INC.
TSX : SPD

SPECTRA PREMIUM INDUSTRIES INC.

November 13, 2006 09:13 ET

Privatization Proposed to Spectra Premium Shareholders

BOUCHERVILLE, QUEBEC--(CCNMatthews - Nov. 13, 2006) - Spectra Premium Industries Inc. (TSX:SPD) ("Spectra Premium"), announced today that it has entered into an amalgamation agreement with a newly formed company, 6551399 Canada Inc. ("Newco"), pursuant to which shareholders of Spectra Premium, other than Newco, will be entitled to receive CDN$2.85 in cash for each Subordinate Voting Share and Multiple Voting Share held (the "Shares") for a total of approximately $90 million. Newco's shareholders shall consist of Jacques Mombleau, Denis Poirier and Kerry Best, members of senior management of Spectra Premium (collectively, the "Senior Management") and Fonds de solidarite des travailleurs du Quebec (F.T.Q.), Desjardins Capital Regional et Cooperatif and Groupe Camada Inc., a company controlled by Mr. Placide Poulin, a director of Spectra Premium. The offered price for the Shares represents a premium of 10 % over the closing price of $2,60 per Subordinate Voting Share on November 10, 2006, and 22 % over the 90-day volume-weighted average trading prices ending on November 10, 2006.

Mr. Denis Charest founder and chairman of the board of directors of Spectra Premium and the company he controls, 2988062 Canada Inc. (together the "Principal Shareholders"), which jointly hold more than 17 million Shares (approximately 54% of all issued and outstanding Shares), have entered into a lock-up and voting agreement with Newco in which they agreed, among other things, to vote their Shares in favor of the proposed transaction. In addition, in order to complete the equity financing required by Newco to finalize this transaction, Mr. Charest agreed to provide an indirect economic interest in Newco in the form of non-voting fixed rate Redeemable Preferred Shares of Newco.

The Board of Directors of Spectra Premium will unanimously recommend that Spectra Premium's shareholders vote their Shares in favor of the amalgamation as it is fair to Spectra Premium's Shareholders and in the best interests of Spectra Premium. The Board of Directors' recommendation follows the receipt of the unanimous recommendation of the Independent Committee previously established by the Board of Directors to consider Spectra Premium's strategic alternatives. This transaction represents the culmination of a review of the company's strategic alternatives by the Board of Directors and the Independent Committee since April 2005. Spectra Premium's Board of Directors received an opinion from RBC Dominion Securities Inc. that the offer is fair to Spectra Premium's public shareholders from a financial point of view.

The amalgamation agreement between Spectra Premium and Newco and the lock-up and voting agreement executed by the Principal Shareholders contain customary provisions prohibiting Spectra Premium or the Principal Shareholders from soliciting any other acquisition proposal, although they may respond to an unsolicited superior proposal, subject to termination fees of $1.6 million payable by Spectra Premium and $2 million payable by the Principal Shareholders.

As the proposed transaction is considered a business combination where related parties of Spectra Premium would acquire Spectra Premium, the Independent Committee of the Board of Directors appointed RSM Richter s.r.l. in order to provide an independent evaluation of the shares of Spectra Premium. In its report dated November 9, 2006, RSM Richter s.r.l. determined that the fair market value of the Shares of Spectra Premium was in the range of $2,40 and $3,03 with a midpoint of $2,72 per Share as at September 30, 2006.

The merger transaction will be carried out by way of an amalgamation under the Canadian Business Corporation Act and is subject to certain conditions such as the funding by different lenders including BMO Bank of Montreal and CIT Business Credit Canada inc. under firm debt commitments and the approvals of 66 2/3% of the votes cast by Spectra Premium Shareholders at the meeting and also the simple majority of the votes cast by shareholders other than the related parties of Spectra Premium. A proxy circular will be mailed to Spectra Premium's shareholders no later than on December 3, 2006 in connection with the special shareholder's meeting to approve the transaction. Subject to the satisfaction of the conditions of the merger transaction, the closing is expected to occur in January 2007.

PROFILES

Spectra Premium is the world leader in the manufacture of fuel tanks and related components for the automobile and light-truck aftermarkets. It ranks first in Canada and is a North American leader in the aftermarket for automotive and industrial radiators, radiator components and oil pans. It also maintains a presence in such markets as sending units, fuel pumps, body panels, condensers, compressors, complete heater cores and other air-conditioning parts. Over the past years, Spectra Premium expanded its activities in the OEM market by concluding agreements to supply steel fuel tanks and aluminum radiators and in addition, to supply radiators for industrial applications and heavy equipment. Spectra Premium has increased its presence in the OEM segment, following the acquisition of Trimag, one of the most important North American manufacturers of high-pressure die cast magnesium alloy parts. It currently employs approximately 1,300 people in its nine (9) plants and 18 distribution centers, which are located throughout Canada, the United States and Europe. Its shares are traded on the Toronto Stock Exchange (ticker symbol: SPD).

With assets of $6.6 billion, the Fonds de solidarite des travailleurs du Quebec (F.T.Q.) is a development capital fund that, through its RRSP, channels the savings of Quebecers into investments in all sectors of the economy to help create and maintain jobs and contribute to Quebec's economic development. The organization is a partner, either directly or through its network members, in 1,681 companies. The Fund currently has over 573,000 shareholders and has helped, on its own or with other financial partners, create, maintain and support over 116,644 jobs. For more information, visit www.fondsftq.com

Desjardins Capital Regional et Cooperatif is a publicly traded company founded in 2001 on the initiative of Desjardins Group. The Company's primary mission is to raise venture capital to develop Quebec's economy and actively take part in the growth of cooperatives and the resource regions. With an authorized capitalization of $1.3 billion, Desjardins Capital Regional et Cooperatif supports companies and cooperatives in all regions of Quebec. For more information, visit www.capitalregional.com

Groupe Camada Inc. is a private joint-stock company that specializes in the investment and acquisition of mid- sized manufacturing business in order to help them to raise to the top of their respective industries. For more information, visit www.camada.ca


PROSPECTIVE FINANCIAL INFORMATION

Certain statements made in this release, including those concerning the expected closing of the transaction referred to herein, are forward-looking statements that involve risks and uncertainties, which may prevent expected future results form being achieved. For those statements, Spectra Premium claims the protection of the safe harbour for forward-looking statements contained in the Canadian and U.S. securities laws. Spectra Premium cautions that the actual future performance could be affected by a number of factors, including the fact that the expected closing of the transaction referred to in this lease is subject to customary closing conditions, many of which are beyond Spectra Premium's control. Therefore, future events and results may vary substantially from what Spectra Premium currently foresees. You will find in the 2006 annual report on page 26 a non exhaustive presentation of risks which could result in an important variance between our actual results and our actual expectations, which can be consulted on the following websites: http://www.sedar.com and http://www.spectrapremium.com.

Contact Information

  • Source:
    Spectra Premium Industries Inc.
    or
    Jacques Mombleau, CA
    President and Chief Executive Officer
    450-641-3656 ext. 2230
    or
    Denis Poirier, CA
    Executive Vice-President
    Chief Financial Officer
    450-641-3656 ext. 2245
    or
    CG3 inc.
    Daniel Rheault
    514-286-5600 ext. 25