Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

July 04, 2012 13:55 ET

Sale of Paragon Pharmacies to Shoppers Drug Mart- Update

KELOWNA, BRITISH COLUMBIA--(Marketwire - July 4, 2012) - Paragon Pharmacies Limited ("Paragon") (TSX VENTURE:PGN) wishes to update a number of matters related to the sale of substantially all of its operations to Shoppers Drug Mart Inc. ("Shoppers") (the "Transaction") previously announced in its press release of May 22, 2012.

Shareholder Approval and Meeting Materials

The Transaction will require the approval of Paragon shareholders. An annual general and special shareholders' meeting has been scheduled for Thursday, July 26, 2012 at 4:00 p.m., at the Fairmont Winnipeg, 2 Lombard Place, Winnipeg, Manitoba.

Meeting materials, including the Notice of Meeting, Information Circular and Instrument of Proxy was mailed to shareholders yesterday and filed on SEDAR and is available at www.sedar.com.

Transaction Adjustments

The agreement entered into in connection with the Transaction (the "Agreement") contemplated potential purchase price adjustments arising out of Shoppers confirmatory due diligence, which included a review of Paragon's store operating income. The maximum purchase price reduction under the due diligence adjustment provisions was $7,000,000. After Shoppers' due diligence review and negotiations between the parties, an adjustment of $1,500,000 to the purchase price was agreed upon. The current purchase price under the Agreement is now approximately $73,500,000, subject to certain usual closing adjustments (which may be positive or negative) for a transaction of this nature, including with respect to receivables, prepaid expenses, inventory and accrued liabilities.

Transaction Closing

The Transaction is currently expected to close on August 1, 2012, subject to fulfillment of closing conditions. The Agreement contemplates an outside closing date of September 19, 2012.

Further Information

Further information regarding the Transaction is contained in the information circular that Paragon has prepared, filed and mailed to its shareholders in connection with the annual and special meeting of Paragon shareholders and the asset purchase agreement entered into between Shoppers and Paragon is available on SEDAR at www.sedar.com.

Paragon Pharmacies Limited built a pharmacy with our customers in mind. Headquartered in Kelowna, BC and employing over 400 staff, Paragon currently owns and operates 19 retail pharmacies and three central fill pharmacies throughout British Columbia, Alberta and Manitoba. Paragon is a leading mid-market pharmacy, providing premier pharmacy services in a friendly, community-focused environment.

For more information, visit www.helloparagon.com.

Cautionary Statement on Forward-Looking Information

This news release contains forward-looking information and statements which constitute "forward-looking information" under Canadian securities law and which may be material regarding, among other things, Paragon's beliefs, plans, objectives, strategies, estimates, intentions and expectations. These include, but are not limited to, statements with respect to the completion of the Transaction,. Forward-looking information and statements are typically identified by words such as "anticipate", "believe", "expect", "estimate", "forecast", "goal", "intend", "plan", "will", "may", "should", "could" and similar expressions.

The forward-looking information and statements contained herein are based on certain factors and assumptions, certain of which appear proximate to the applicable forward-looking information and statements contained herein, including assumptions as to the time required to satisfy the conditions to the closing of the Transaction. Such timing may change for a number of reasons, including unforeseen delays to satisfy the conditions to the completion of the Transaction. In addition, there are no assurances the Transaction will be completed. In the event the Transaction is not completed, there will be no cash distribution to Paragon shareholders. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Readers are cautioned that the foregoing list is not exhaustive.

Inherent in the forward-looking information and statements are known and unknown risks, uncertainties and other factors beyond Paragon's ability to control or predict, which give rise to the possibility that Paragon's predictions, forecasts, expectations or conclusions will not prove to be accurate, that its assumptions may not be correct and that its plans, objectives and statements will not be achieved. Actual results or developments may differ materially from those contemplated by the forward-looking information and statements.

Certain of these risks, factors, estimates and assumptions are described in more detail in the "Risks and Risk Management" section of Paragon's most recently filed annual and interim Management's Discussion and Analysis for the year-ended August 31, 2011 and the six month period ended February 29, 2012 to which readers are referred and which are incorporated by reference in this news release. In addition, all forward-looking statements made in this news release are qualified by the full caution regarding Forward-Looking Information and Statements in such Management's Discussion and Analysis. These risks, factors, estimates and assumptions are not exhaustive. Paragon disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

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 release.

Contact Information

  • Paragon Pharmacies Limited
    Denis Taillieu
    Director
    (250) 868-8400
    information@paragonpharmacies.com

    Paragon Pharmacies Limited
    Unit 8, 2604 Enterprise Way
    Kelowna, BC V1X 7Y5