Québec City, Canada and Myrtle Beach, United States, August 23, 2019 – TSO3 Inc. (“TSO3” or the “Company”) (TSX: TOS), an innovator in sterilization technology for medical devices in healthcare settings, announces today the filing of its management information circular (the “Circular”) and related proxy materials with Canadian securities regulatory authorities in connection with the special meeting of shareholders (the “Special Meeting”) to be held at 3:30 p.m. (Eastern Daylight Time) on September 23, 2019 at the offices of Lavery, de Billy, L.L.P. located at 1 Place Ville Marie, Suite 4000, Montréal, Québec, Canada, in accordance with the terms of an interim order of the Québec Superior Court obtained on August 22, 2019. A copy of the Circular may be found under the Company’s profile on SEDAR at www.sedar.com and on TSO3’s website at https://www.tso3.com/library/. The Company intends to mail the Circular to its shareholders in the upcoming days.
The purpose of the Special Meeting is to obtain shareholder approval of the proposed plan of arrangement (the “Arrangement”) involving the Company, Stryker Corporation (“Stryker”) and 9402-4874 Québec Inc. (the “Purchaser”), a subsidiary of Stryker, for the acquisition by the Purchaser of all of the issued and outstanding shares of the Company, as previously announced on August 12, 2019.
The Arrangement is the result of a broad strategic review process overseen by a special committee of the board of directors (the “Special Committee”), as well as the board of directors of TSO3 (the “Board”). Pursuant to this process, the Company contacted 117 potential parties during 2018 and 2019 with respect to any of a sale of the Company, a financing or refinancing of the Company, or a strategic partnership with the Company. The Board has unanimously determined that the Arrangement is in the best interests of the Company, is fair to shareholders and represents the best outcome of reasonably available alternatives, and therefore unanimously recommends that shareholders vote FOR the Arrangement.
The determination of the Board is based on various factors described more fully in the Circular, including among others:
• the fairness opinions delivered by each of Piper Jaffray & Co. and Desjardins Capital Markets, both to the effect that, as of the date of each such fairness opinion, and subject to the scope of review, assumptions, qualifications and limitations set forth therein, the consideration to be received by shareholders pursuant to the Arrangement is fair, from a financial point of view, to the shareholders;
• that the consideration to be received by the shareholders pursuant to the Arrangement is the best available consideration for the shareholders, and that it is more favorable to the shareholders than the potential value that could result from maintaining the Company’s status quo or from the other alternatives that were reasonably available to the Company; and
• the certainty of value and liquidity of the consideration for shareholders.
Furthermore, in the event that the Arrangement is not completed and the Company is required to pay, in addition to the various transaction costs and expenses incurred with respect to the Arrangement, the termination fee or the expense fee in connection with such termination (including, in the latter case, as a result of the shareholders not approving the Arrangement), the Company expects it would be in breach of the USD$5.0 million minimum cash liquidity covenant under its existing financing agreements with its principal lender. Such breach would accelerate the repayment of all principal and interests outstanding thereunder and the Company would as a result not be able to continue as a going concern.
Shareholders should review carefully the Circular, which contains important information regarding the Arrangement, how shareholders can vote at the Special Meeting, the background that led to the Arrangement and the reasons that led each of the Special Committee and the Board to unanimously determine that the Arrangement is in the best interests of TSO3 and is fair to shareholders, approve the arrangement agreement and recommend that shareholders vote in favour of the Arrangement.
Shareholders of record at the close of business on August 21, 2019 will be entitled to vote at the Special Meeting in accordance with the voting rights corresponding to their shares. It is currently anticipated that the Arrangement will be completed at the end of September 2019 or in October 2019.
Shareholder Questions and Assistance
The Company has retained Shorecrest Group Inc. to act as proxy solicitation agent and to answer information requests from shareholders. Communications with Shorecrest Group Inc. may be made (i) by e-mail at firstname.lastname@example.org or (ii) by phone at toll free in North America at 1-888-637-5789 or at 647-931-7454.
Founded in 1998, TSO3’s activities encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related consumable supplies and accessories for heat-sensitive medical devices. The Company designs products for sterile processing areas in the hospital environment that offer an advantageous replacement solution to other low temperature sterilization processes currently used in hospitals. TSO3 also offers services related to the maintenance of sterilization equipment and compatibility testing of medical devices with such processes.
For more information about TSO3, visit the Company’s website at www.tso3.com.
Forward looking statements
Certain statements set forth in this press release may constitute “forward-looking statements” within the meaning of applicable securities laws, including, but not limited to, statements with respect to the timing, outcome and completion of the proposed transaction with the Purchaser and Stryker, the anticipated benefits of such transaction, the anticipated timing of the Special Meeting and the effects of a failure to complete the proposed transaction. There can be no assurance that the proposed transaction will be completed, or that it will be completed on the terms and conditions contemplated in this press release. The proposed transaction could be modified or terminated. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.
Each forward-looking statement contained in this press release is subject to known and unknown risks and uncertainties and other unknown factors that could cause actual results to differ materially from historical results and those expressed or implied by such statement. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes”, “belief”, “expects”, “intends”, “anticipates”, “will”, “would” or “plans” to be uncertain and forward-looking. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Risks and uncertainties inherent in the nature of the proposed transaction include, without limitation, the failure of the parties to obtain the necessary shareholder and court approvals or to otherwise satisfy the conditions to the completion of the transaction; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; significant transaction costs or unknown liabilities; the occurrence of events that may give rise to a right of one or both of the Company and Stryker to terminate the arrangement agreement; the failure to realize the expected benefits of the transaction; and general economic conditions. Failure to obtain the necessary shareholder and court approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the transaction or to complete the transaction, may result in the transaction not being completed on the proposed terms, or at all. In addition, if the transaction is not completed, and the Company continues as an independent entity, there are risks that the announcement of the proposed transaction and the dedication of substantial resources of the Company to the completion of the transaction could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have an adverse effect on the Company’s current and future operations, financial condition and prospects. Furthermore, the failure of the Company to comply with the terms of the arrangement agreement may, in certain circumstances, result in it being required to pay a fee to Stryker, the result of which could have a material adverse effect on its financial position and results of operations and its ability to fund growth prospects and current operations. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of TSO3, which could in turn also impact the completion of transaction, are described in the Circular and the reports filed from time to time by TSO3 with securities authorities in Canada. Investors are encouraged to read the Circular and TSO3’s filings available on its website at https://www.tso3.com/ and on SEDAR at www.sedar.com, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this press release, and TSO3 undertakes no obligation to update or revise any of these statements, whether as a result of new information, future events or otherwise, except as required by law.Back to Posts