Savaria Corporation

TSX : SIS


Savaria Corporation

March 26, 2014 07:53 ET

Savaria Announces $16,250,000 Bought-Deal Private Placement

LAVAL, QUEBEC--(Marketwired - March 26, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Savaria Corporation ("Savaria") (TSX:SIS), North America's leader in the accessibility industry, today announced that it has entered into an agreement with Laurentian Bank Securities Inc. pursuant to which Laurentian Bank Securities has agreed to purchase, on a bought-deal private-placement basis, 5,000,000 units of Savaria (the "Units") at a price of $3.25 per Unit for gross proceeds to Savaria of $16,250,000 (the "Offering"). Each Unit will be comprised of one common share and one-half of a common share purchase warrant of Savaria. Each full warrant will entitle its holder to subscribe for one additional common share of Savaria at an exercise price of $4.25 for 36 months from the closing date of the Offering. The Offering will be effected pursuant to prospectus exemptions under applicable securities legislation. The pricing of the Offering is the result of arm's-length negotiations between Savaria and Laurentian Bank Securities. The issue price of the Units represents a discount of approximately 8% to the current market price of Savaria's common shares and the exercise of the warrants comprised in the Units represents a premium of approximately 21% to such market price.

Savaria has also granted an option to Laurentian Bank Securities to purchase up to 750,000 additional Units at the issue price of $3.25 per Unit (the "Option"), which if exercised in full would result in total gross proceeds of $18,687,500 to Savaria from the Offering. The Option is exercisable in whole or in part at any time until 5:00 p.m. on the second business day preceding the closing of the Offering.

The net proceeds of the Offering will be used by Savaria for product development, working capital and general corporate purposes.

Mr. Marcel Bourassa, President and Chief Executive Officer of Savaria, and Mr. Jean-Marie Bourassa, Chief Financial Officer of Savaria, have committed to acquire through a holding company owned by them in equal proportions, an aggregate of 1,000,000 Units, or 20% of the Units to be issued pursuant to the Offering. After giving effect to the issuance of the common shares comprised in these Units and those issuable further to the exercise of the warrants comprised therein, but without giving effect to the Option, an aggregate of 1,500,000 common shares, representing approximately 6.3% of the current number of issued and outstanding common shares, will be issued to such executives. Savaria will not pay any commission in respect of their subscription for Units.

The Offering is expected to close on or about April 15, 2014 and is subject to certain conditions, including the receipt of all necessary regulatory approvals. The securities issued by Savaria in the Offering will be subject to a hold period of four months and one day in Canada calculated from the closing date of the Offering.

The Offering represents the possible issuance of up to 8,625,000 common shares (assuming the exercise in full of the Option and after giving effect to the issuance of the common shares issuable upon exercise of the warrants comprised in the Units), which represents approximately 36% of the 23,804,614 common shares issued and outstanding as of the date hereof. Savaria does not anticipate that the completion of the Offering will have a material effect on its control or result in the creation of any new holder of 10% or more of the common shares.

Pursuant to the rules of the Toronto Stock Exchange (the "TSX"), shareholder approval must be obtained for private placements for an aggregate number of listed securities which is greater than 25% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of closing of the transaction if the price per security is less than the market price. As the aggregate number of common shares comprised in the Units and issuable further to the exercise of the warrants comprised in the Units exceeds 25% of the current number of issued and outstanding common shares, Savaria intends to obtain the requisite shareholder approval by way of written consent in lieu of holding a shareholders' meeting as permitted by Section 604d) of the TSX Company Manual. Savaria has been advised that Messrs. Marcel Bourassa and Jean-Marie Bourassa, who together currently control, directly or indirectly, approximately 58.9% of the outstanding the common shares, will consent to the issuance of common shares pursuant to the Offering.

This news release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

About Savaria

Savaria (www.savaria.com) is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, installs and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts wheelchair accessible automotive vehicles. The diversity of its product line, one of the world's most comprehensive, enables Savaria to stand out by proposing an integrated and customized solution for its customers' mobility needs. Its operations in China have substantially grown and the collaboration with Savaria's other Canadian facilities increases its competitive edge in the market place. Savaria records some 60% of its revenue outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs some 360 people at its head office in Laval and at its plants and sales offices in Montreal (Quebec), Brampton and London (Ontario), Calgary (Alberta) and Huizhou (China).

Forward-Looking Statements

This news release contains forward-looking statements and other statements that are not historical facts, including statements about the proposed closing of the Offering and the intended use of the proceeds therefrom. Such forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to vary materially from target results and the results or events predicted in these forward-looking statements. As a result, investors are cautioned not to place undue reliance on these forward-looking statements.

The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, Savaria disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking information reflects the current expectations or belief of Savaria based on information currently available and such information is subject to a number of assumptions, risks and uncertainties, including risks related to the state of the capital markets, the ability of Savaria to implement its growth strategy, to develop new products, to have access to additional financing and capital, to obtain regulatory approvals, to protect and maintain its intellectual property, unexpected product safety or efficacy concerns, new legislation or regulatory requirements, reliance on third parties for supply and manufacture of products, quarterly fluctuations in sales, product pricing regulation, concentration of credit risks and other risks associated with being an accessibility industry company.

www.savaria.com

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