Zedi Inc.

Zedi Inc.

December 19, 2013 08:06 ET

Zedi Inc. Announces Agreement to Be Acquired by a Management-Led Group in a Transaction Valued at $125 Million

CALGARY, ALBERTA--(Marketwired - Dec. 19, 2013) -


Zedi Inc. ("Zedi" or the "Corporation") (TSX VENTURE:ZED) is pleased to announce that it has entered into a definitive arrangement agreement (the "Arrangement Agreement"), pursuant to which a management-led group ("Management") will acquire all of the issued and outstanding common shares of Zedi (the "Zedi Shares") at a price of $1.05 per Zedi Share (including any Zedi Shares issued upon the exercise of outstanding stock options or on the redemption of outstanding restricted share units or deferred share units). The transaction is valued at approximately $125 million, including assumed net debt and capital leases as of November 30, 2013, and the value of 18,532,540 Zedi Shares (the "Management Shares") held directly or indirectly or over which control and direction is exercised by certain executive officers and directors of Zedi, including Matthew Heffernan, President and Chief Executive Officer, Larry Spagnolo, Senior Vice President Market and Customer Solutions, Clement Gaudet, Chief Operations Officer, James Freeman, Chief Technology Officer, Robert W. Gordon, General Counsel and Corporate Secretary, David Johnson, Director, and Martin Lambert, Director and certain other shareholders acting jointly and in concert with Management (collectively, the "Management Shareholders").

The Arrangement Agreement provides that 1779958 Alberta Ltd. ("Acquireco"), a corporation formed by Management, will acquire all of the Zedi Shares pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Pursuant to the Arrangement, each Zedi shareholder, other than the Management Shareholders (collectively, the "Public Shareholders"), will receive $1.05 in exchange for each Zedi Share held. This purchase price represents an 8% premium to the closing price of the Zedi Shares on the TSX Venture Exchange (the "Exchange") on December 18, 2013, a 14% premium to the closing price of the Zedi Shares on October 31, 2013, the last trading day prior to the announcement that Zedi was reviewing strategic alternatives and a 59% premium to the average closing price of the Zedi Shares for the 90 trading days ending on October 31, 2013. The purchase price is being financed by equity provided by the Management Shareholders and certain other investors and by a committed debt financing provided by the Royal Bank of Canada and ATB Corporate Financial Services.

In early 2013, the Board of Directors of Zedi (the "Board") sought preliminary financial advice from select financial advisory firms in respect of, among other things, their views on Zedi and current market conditions. Following receipt of such advice, the Board formed a committee of independent directors (the "Independent Committee") to consider and, if thought appropriate, undertake a strategic alternative and value maximization review process. The Independent Committee determined to undertake such process and engaged Simmons & Company International ("Simmons") as its financial advisor. The Independent Committee, with assistance from Simmons, conducted a thorough review of strategic alternatives, which included identifying and approaching a number of potentially interested parties, including both strategic investors and private equity firms. The Independent Committee considered a number of alternatives available to Zedi including, among other things, a sale to a third party, partnering with a financial sponsor and other transactions which individually or in the aggregate would unlock shareholder value. Following its review and consideration of all non-binding expressions of interest received, the Independent Committee recommended that a sale to Acquireco was in the best interests of the Corporation.

A more complete discussion of the strategic alternative and value maximization review process undertaken by the Independent Committee and the reasons for the Board's recommendation that Zedi shareholders vote in favour of the Arrangement will be included in Zedi's information circular which will be sent to Zedi shareholders in connection with the special meeting to consider the Arrangement.

Simmons assisted the Independent Committee in the Strategic Review process and has provided the Board with a fairness opinion that the cash consideration to be received by the Public Shareholders pursuant to the Arrangement is fair, from a financial point of view, to such Public Shareholders.

The Arrangement was unanimously recommended by the Independent Committee to the Board. The Board, with interested directors abstaining, after receiving the unanimous recommendation of the Independent Committee, has unanimously determined that the Arrangement is in the best interests of Zedi and that the Arrangement is fair to Zedi shareholders other than Management Shareholders. The Board, with interested directors abstaining, has unanimously approved the Arrangement Agreement, the Arrangement and the transactions contemplated thereby, and has resolved to recommend that Zedi shareholders vote in favour of the Arrangement.

All of the members of the Board and Zedi's executive officers and certain other Zedi shareholders, who collectively own approximately 30% of the outstanding Zedi Shares, have entered into, or have agreed to enter into, voting support agreements with Acquireco pursuant to which they have agreed to vote their Zedi Shares in favour of the Arrangement, subject to the provisions thereof.

The Arrangement is subject to customary Exchange, court and regulatory approvals, including, but not limited to, the approval of at least 66 2/3% of the votes cast in person or by proxy at a special meeting of Zedi's shareholders and the approval of a "majority of the minority" of the Corporation's shareholders, being a majority of the votes cast by shareholders excluding shareholders whose votes may not be included in determining if minority approval is obtained pursuant to Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions. Closing of the Arrangement is also subject to the satisfaction of a number of conditions precedent customary for transactions of this nature. The special meeting of Zedi to consider the Arrangement is expected to be held on or about February 18, 2014. An information circular in connection with the Arrangement is expected to be mailed to Zedi shareholders by January 20, 2014, with closing expected to occur on or about February 20, 2014.

The Arrangement Agreement provides that Zedi will not solicit, assist, initiate, facilitate or encourage any discussions, negotiations, proposals or offers concerning the pursuit of any alternative acquisition proposals. However, Zedi is able to respond to alternative proposals that could result in a "superior proposal" (as defined in the Arrangement Agreement). Acquireco has the right to match any competing superior proposal for Zedi in the event a superior proposal is made. No termination fee is payable by Zedi to Acquireco if Zedi terminates the Arrangement Agreement in connection with a superior proposal. No termination fee is payable by Acquireco to Zedi if Acquireco fails to obtain the financing necessary to complete the Arrangement.


This press release contains forward-looking statements within the meaning of Canadian securities laws. These forward-looking statements contain statements of intent, belief or current expectations of Zedi. Forward-looking information is often, but not always identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook.

The forward-looking statements included in this press release, including statements regarding the Arrangement, the anticipated benefits of the Arrangement, the receipt of necessary approvals, the shareholder vote, and the anticipated timing for mailing the information circular, holding the special meeting of shareholders of Zedi and completing the Arrangement, are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Arrangement and the anticipated timing for completion of the Arrangement, Zedi has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare and mail shareholder meeting materials, the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court, shareholder, Exchange and other third party approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Arrangement.

Risks and uncertainties that may cause such differences include but are not limited to: the risk that the Arrangement may not be completed on a timely basis, if at all; the conditions to the consummation of the Arrangement may not be satisfied; the risk that the Arrangement may involve unexpected costs, liabilities or delays; the risk that expected benefits of the Arrangement may not materialize as expected; the risk that, prior to the completion of the Arrangement, Zedi's business may experience significant disruptions, including loss of customers or employees, due to transaction-related uncertainty or other factors; the possibility that legal proceedings may be instituted against Zedi and/or others relating to the Arrangement and the outcome of such proceedings; the possible occurrence of an event, change or other circumstance that could result in termination of the Arrangement Agreement; risks regarding the failure of Acquireco to obtain the necessary financing to complete the Arrangement; risks related to the diversion of management's attention from Zedi's ongoing business operations; risks relating to the failure to obtain necessary shareholder and court approval; risks related to obtaining the requisite consents to the Arrangement; other risks inherent in the oilfield services industry; and risks, including litigation, associated with our intellectual property and with the performance of our technology. Failure to obtain the requisite approvals, or the failure of the parties to otherwise satisfy the conditions to or complete the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, and Zedi continues as an independent entity, the announcement of the Arrangement and the dedication of substantial resources of Zedi to the completion of the Arrangement could have a material adverse impact on Zedi's share price, its current business relationships (including with future and prospective employees, customers, distributors, supplies and partners) and on the current and future operations, financial condition and prospects of Zedi. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

The forward-looking statements in this press release are made as of the date it was issued and Zedi does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that outcomes implied by forward-looking statements will not be achieved. Zedi cautions readers not to place undue reliance on these statements.


Zedi Inc. (TSX VENTURE:ZED) helps the world's oil and gas producers be more productive, more profitable, and more sustainable through technology backed by expert consultation and services. Our 60 years of continuous operations in North America and recognition as one of the industry's best workplaces, sets us apart in the production operations landscape. With our unique combination of award-winning automation, data management, and field and professional services, we offer solutions to our customers' challenges and help them realize their production potential.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Zedi Inc.
    Debra Deane
    Investor Relations
    403-444-1101 (FAX)