Automodular to repurchase up to $5 million of its shares pursuant to a substantial issuer bid
Toronto - June 11, 2010
Automodular Corporation (TSX: AM)
(“Automodular” or the “Corporation”) announced today that it intends to make a substantial
issuer bid (the “Offer”) pursuant to which the Corporation will offer to repurchase for
cancellation up to Cdn$5 million in value of its outstanding common shares (the “Shares”) from
shareholders. The Offer will proceed by way of a modified “Dutch Auction” and the range of
Offer prices will be Cdn$0.90 to Cdn$1.10 per Share. The maximum Purchase Price under the
Offer represents a premium of approximately 100% over the volume weighted average trading
price of the Shares on the TSX for the last 30 trading days preceding the date of this
announcement.
The modified Dutch Auction tender process allows shareholders to individually select the price,
within the specified range, at which they are willing to sell all or a portion of their Shares. When
the Offer expires, Automodular will select the lowest tendered price from within the range of
prices (the “Purchase Price”) allowing it to buy up to Cdn$5 million of the Shares validly
tendered to the Offer. All Shares tendered at or below the selected price level will be bought at
the Purchase Price, subject to pro-ration in the event that the aggregate cost to purchase all of
such Shares exceeds Cdn$5 million. All Shares tendered at prices higher than the Purchase Price
will be returned to shareholders. The Corporation will fund any purchases of Shares pursuant to
the Offer from available cash on hand.
The Offer will be for up to approximately 21.4% of the total number of issued and outstanding
Shares (based on a Purchase Price equal to the minimum purchase price per Share of Cdn$0.90
and 25,949,233 Shares outstanding on June 11, 2010).
The Offer will not be conditional on any minimum number of Shares being tendered to the Offer,
but will be subject to other conditions customary for transactions of this nature. It is anticipated
that the formal offer to purchase and issuer bid circular and other related documents (the “Offer
Documents”), containing the terms and conditions of the Offer and instructions for tendering
Shares will be mailed to shareholders and filed with the applicable securities regulators and
available on SEDAR at www.sedar.com on or around June 14, 2010. The Offer will remain open
for acceptance for at least 35 days after the date of commencement, unless withdrawn or
extended by the Corporation.
The Board of Directors of Automodular, following a recommendation of a special committee of
independent directors (the “Independent Committee”), has authorized the making of the Offer.
Capital Canada Limited (“Capital Canada”) was engaged by Automodular as the independent
valuator to prepare a formal valuation of the Shares (the “Valuation”) for the Board. The
Valuation contains Capital Canada’s opinion that, based on the scope of its review and subject to
the assumptions, restrictions and limitations provided therein, as of June 11, 2010, the fair
market value per Share falls within the range of Cdn$0.80 to Cdn$1.34. After reviewing the
Valuation and considering the assumptions underlying the valuation methodology used therein,
the Independent Committee recommended and the Board has determined to set the maximum
and minimum price of the Offer within a range that is narrower than the range ascribed to the
Shares in the Valuation. A copy of the Valuation will be filed separately on SEDAR.
Neither the Corporation nor its Board of Directors makes any recommendation to shareholders as
to whether to tender or refrain from tendering their Shares to the Offer.
Shareholders are strongly urged to consult their own financial, tax and legal advisors and to
make their own decisions whether to tender or refrain from tendering their Shares to the Offer
and, if so, how many Shares to tender and at what price or prices.
The Board of Directors’ decision to authorize making the Offer, was based on a number of
factors, including that the Offer is an equitable and efficient means of distributing capital of up to
approximately $5 million in the aggregate to shareholders, the deposit of Shares is optional and
Shareholders are free to accept or reject the Offer, the positive impact that the purchase of Shares
under the Offer could have on Automodular’s operating results calculated on a per Share basis
and that, after giving effect to the Offer, Automodular is expected to continue to have sufficient
financial resources and working capital to conduct its ongoing business and operations.
Further information concerning the factors considered by the Independent Committee and Board
of Directors, along with the terms and conditions of the Offer, will be contained in the Offer
Documents that will be mailed to shareholders and available on SEDAR when the Offer is
formally launched.
This press release is for information purposes only and is not an offer to buy or the solicitation of
an offer to sell any Shares.
Automodular is a supplier of sub-assembly, sequencing and transportation services to three OEM
plants in Ontario and Ohio. The Corporation has four operating facilities and employs
approximately 650 people.
For further information, contact:
Christopher S. Nutt
Vice President, Finance and Chief Financial Officer
Automodular Corporation
(905) 619 4202
invest@automodular.com
This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the
important factors that could cause actual results to differ materially from those indicated by such forward-looking
statements are market and general economic conditions and the risk factors detailed from time to time in the
Corporation’s periodic reports filed with the Canadian securities regulatory authorities and on SEDAR at
www.sedar.com. Readers are cautioned not to rely on forward-looking statements. Except as required under
continuous disclosure obligations, the Corporation undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise. As of the fourth
quarter of 2008, Automodular no longer provides a financial outlook.
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