Nors, S.A. to Acquire Strongco Corporation

MISSISSAUGA, Ontario and PORTO, Portugal, Jan. 24, 2020 (GLOBE NEWSWIRE) -- Strongco Corporation (“Strongco”) (TSX:SQP) and Nors, S.A. (“Nors”) are pleased to announce that they have entered into a definitive arrangement agreement (the “Arrangement Agreement”) pursuant to which Nors will acquire Strongco (the “Proposed aTransaction”).

Under the terms of the Arrangement Agreement, Nors, through a wholly-owned subsidiary, will acquire all of the outstanding equity of Strongco for CAD$3.15 per share in cash (the “Consideration”) and results in a transaction value of approximately CAD$193 million (inclusive of Strongco’s net interest bearing debt). The Consideration represents a premium of 75% to the closing price of the Strongco shares on the Toronto Stock Exchange on January 23, 2020 and a premium of 80% to the volume-weighted average trading price on such exchange for the 60 days ended on such date.

Robert Beutel, Executive Chairman of Strongco, commented: “As Strongco moves to enhance its product and service offerings in Canada we are pleased to become part of the Nors Group. Nors’ international experience and capital foundation, in many of the same product lines on four continents, brings the know-how and experience to elevate our potential to deliver leading edge quality to our growing customer base in an increasingly global environment. The Strongco board is confident that this represents a favourable outcome for all of our stakeholders.”

“In recent years, Strongco’s management has done an excellent job of strengthening the company’s capital structure, streamlining the business and reducing costs. As we welcome Strongco into the Nors family, we believe that Strongco will benefit from Nors’ global presence and brand recognition, and from its long experience in the automotive and construction equipment industry,” added Tomás Jervell, Chief Executive Officer of Nors.

Additional Transaction Details

The Proposed Transaction is to be completed by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) and is subject to customary closing conditions, including approval of 66⅔% of the votes cast by Strongco shareholders, voting together as one class, at a special meeting of Strongco. Completion of the Proposed Transaction is also subject to court, regulatory and stock exchange approval, as well as certain other closing conditions customary for transactions of this nature.

The Proposed Transaction has the unanimous support of the independent special committee of the Strongco board, as well as Strongco’s full board, which have (i) determined, after  receiving  financial  and  legal  advice,  that  the  consideration  to  be received  by  Strongco’s  shareholders  is  fair  from  a  financial  point  of  view  and  that  the  Proposed Transaction  is  in  the  best  interests  of  Strongco, and (ii) recommended the approval of the Proposed Transaction by Strongco’s shareholders. In addition, all of the directors and officers of Strongco, as well as certain significant shareholders of Strongco, have entered into voting support agreements with Nors under which they will vote an aggregate of approximately 48% of Strongco’s outstanding shares in favour of the Proposed Transaction.

Further details regarding the Proposed Transaction will be included in the proxy circular to be mailed to the Strongco shareholders in connection with the special meeting of Strongco. A copy of the Arrangement Agreement will be available under Strongco’s issuer profile on SEDAR at www.sedar.com.

Closing of the Proposed Transaction is expected to take place before the end of Q1 2020.

Dentons Canada LLP is serving as legal counsel and Crosbie & Company Inc. is serving as financial advisor to Strongco.  Baker & McKenzie LLP is serving as legal counsel and PwC is serving as financial advisor to Nors.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States pursuant to the United States Securities Act of 1933, as amended, or any state securities laws.

About Strongco

Strongco Corporation is a major multiline mobile equipment dealer with operations across Canada. Strongco sells, rents and services equipment used in diverse sectors such as construction, infrastructure, mining, oil and gas, utilities, municipalities, waste management and forestry. The Company has approximately 500 employees serving customers from 26 branches in Canada. Strongco represents leading equipment manufacturers with globally recognized brands, including Volvo Construction Equipment, Case Construction, Manitowoc Crane, including National and Grove, Terex Cedarapids, Terex Trucks, Fassi, Sennebogen, Konecranes and SDLG. Strongco is listed on the Toronto Stock Exchange under the symbol SQP.

About Nors

Nors is a Portuguese based private company that sells, rents and services construction, infrastructure, mining and forestry equipment, trucks, busses, cars and marine and industrial engines in 16 countries in four continents: Portugal, Spain, Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, Turkey, Brazil, Angola, Mozambique, Botswana, Namibia, Mexico and the USA. The company was founded in 1933, has 3,600 employees and a turnover of over €1.6 billion. Nors represents leading heavy equipment manufacturers with global brands like Volvo Construction Equipment, Volvo Trucks, Volvo Bus, Volvo Penta, Renault Trucks, UD Trucks, DongFeng Trucks, SDLG, Sennebogen, Grove, Epiroc, Sandvik, Case IH, Kohler-SDMO, Yale and Hyster.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. All statements other than statements of present or historical fact are forward-looking statements, including statements with respect to the Proposed Transaction and the likelihood that the Proposed Transaction will be consummated on the terms and timeline provided herein or at all, the business and growth strategies, prospects and operation following the Proposed Transaction, the anticipated timing of completion of the Proposed Transaction, the expected benefits of the Proposed Transaction and the receipt of all required approvals, including without limitation the approval of the Strongco shareholders, the court, applicable regulatory authorities and applicable stock exchanges.

Forward-looking statements include words or expressions such as “will”, “may”, “shall”, “if”, “subject to”, “in the event”, “expected”, and other similar words or expressions. In respect of the forward-looking statements and information concerning the likelihood that the Proposed Transaction will be consummated and the anticipated benefits of the completion of the Proposed Transaction, Strongco and Nors have provided such statements and information in reliance on certain assumptions that they each believe are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, stock exchange, court and shareholder approvals where applicable; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Proposed Transaction; general assumptions respecting the business and operations of both Strongco and Nors, including that each business will continue to operate in a manner consistent with past practice and pursuant to certain industry and market conditions; and other expectations and assumptions concerning the Proposed Transaction. Although Strongco and Nors believe that the expectations reflected in these forward-looking statements are reasonable, neither Strongco nor Nors can give assurance that these expectations will prove to have been correct, that the Proposed Transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, without limitation, significant transaction costs or unknown liabilities; economic, competitive, political and social uncertainties; the state of capital markets; risks relating to (i) the ability of the parties to satisfy the closing conditions of the Arrangement Agreement, (ii) the ability of the Strongco board to consider and approve a superior proposal for Strongco prior to the completion of the Proposed Transaction, (iii) failure to receive the necessary shareholder, court or regulatory approvals where applicable, or failure of the parties to obtain such approvals or satisfy such conditions in a timely manner, (iv) unforeseen challenges in integrating the businesses of Nors and Strongco, (v) failure to realize the anticipated benefits of the Proposed Transaction, (vi) the business, operational and/or financial performance or achievements of Strongco and Nors may be materially different from that currently anticipated, (vii) other unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and (viii) other factors ultimately being inaccurate or irrelevant. In particular, the benefits anticipated in respect of the Proposed Transaction are based on the current business, operational and financial position of each of Strongco and Nors, which are subject to a number of risks and uncertainties. Readers are cautioned that the foregoing list of risks, uncertainties and assumptions are not exhaustive. In addition, if the Proposed Transaction is not completed, and Strongco continues as an independent entity, there are risks that the announcement of the Arrangement Agreement and the dedication of substantial resources of Strongco to the completion of the Proposed Transaction could have an impact on its business and strategic relationships (including with regulatory bodies, future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Consequently, the reader is cautioned not to place undue reliance on the forward-looking statements and information contained in this press release. The forward-looking statements in this press release reflect the expectations of the parties on the date hereof and are subject to change thereafter. The parties disclaim any obligation to update or revise these forward-looking statements, except as required by applicable law.

You can find further information with respect to these and other risks in filings made by Strongco with the Canadian securities regulatory authorities and available at www.sedar.com.

Notice to U.S.  Holders

Both Nors and Strongco have been formed outside of the United States.  The Proposed Transaction will be subject to disclosure requirements of Canada that are different from those of the United States. Financial statements included in  the  documents,  if  any,  will  be  prepared  in  accordance  with  Canadian  accounting  standards  and  may  not  be  comparable  to  the  financial  statements  of United  States companies.  It  may  be  difficult  for  a  securityholder  in the  United  States to  enforce  his/her/its rights and any claim a securityholder may have arising under U.S. federal securities laws, since the companies are located outside the United States, and some or all of their officers or directors may be residents of Canada or another country outside of the United States. A securityholder may not be able to sue a Canadian company or its officers or directors in a court in Canada or elsewhere outside of the United States for violations of U.S. securities laws. It may be difficult to compel a Canadian company and its affiliates to subject themselves to a U.S. court's judgment.

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