India's TransWorks to acquire Canada's Minacs

Source: Minacs

Minacs Worldwide Inc. (TSX: MXW) and TransWorks Information Services Ltd. today announced that they have entered into a definitive agreement wherein a wholly-owned subsidiary of TransWorks will offer CDN$5.50 (approximately US$5.00) per share in cash for all outstanding common shares of Minacs on a fully-diluted basis.

ReichmannHauer Capital Partners, a Toronto-based private investment firm, partnered with the Aditya Birla Group in its evaluation of the transaction and intends to invest in the combined entity.

Minacs is Canada's leading Business Process Outsourcing (BPO) provider. TransWorks is a one of India's leading providers of premium BPO solutions and is a wholly owned subsidiary of the Aditya Birla Group, one of India's largest and most-respected business houses. Together Minacs and TransWorks will create a business with revenues in excess of CDN$330 million, approximately US$300 million. (Minacs: CDN$290M, TransWorks: CDN$40M).

Norman Betts, Chair of the Board of Directors of Minacs, said: "I am very pleased that as a result of disciplined efforts and hard work by the Board, its Special Committee, our management team, and our advisers that we have been able to find a great new partner for Minacs, for our customers and for our shareholders. I am proud of this agreement and the future it secures."

Says Mr. Kumar Mangalam Birla, Chairman of Aditya Birla Group: "The acquisition demonstrates our commitment to emerge as a leading global BPO services provider and expand our global footprint. The integrated expertise of both companies will create and provide more powerful and compelling BPO solutions to clients. The result will be a firm with distinctive industry knowledge and execution capability delivered through a unique "same-shore, near-shore, offshore" global delivery platform. The objective will be to reliably deliver outstanding BPO services to global clients from anywhere in the world."

Bruce Simmonds, Chief Executive Officer of Minacs, said: "This deal means a great future for our clients and our employees. I look forward to working with the TransWorks team in building a great new international competitor. We will draw on the strengths, experience and client relationships of both companies, and our experience on three continents."

TransWorks' offer represents a premium of approximately 44.7% based on the closing market price of Minacs common shares on the Toronto Stock Exchange on February 3, 2006 (this was the last completed trading day prior to the announcement that the late Ms. Elaine Minacs, the company's founder and principal shareholder, believed a process to maximize shareholder value, including a sale of the business to a third party, should be launched). Minacs' stock closed trading on June 23, 2006 at CDN$5.56.

Atul Kunwar, CEO of TransWorks, commented on the offer: "This is a transformational move for both organizations. It offers many longer-term opportunities to deliver enhanced services to new and existing clients. Of course, our top priority in the near-term will be to ensure continuing consistent and reliable service to both our firms' existing clients."

Philip Reichmann, Co-Founding Partner of ReichmannHauer Capital Partners, said: "The combination of TransWorks and Minacs creates a BPO provider positioned for industry leadership. The firm will have an outstanding global delivery footprint, superior solutions, backed by strong brands and customer relationships."

The Special Committee's independent financial advisor, Genuity Capital Markets, conducted an extensive process to analyze approaches to maximize value for Minacs shareholders. Following a broad canvass of potential strategic and financial partners, the TransWorks offer is the culmination of this process. Genuity has provided an opinion to the Minacs Board that, from a financial point of view, the consideration under the TransWorks' offer is fair to the Minacs shareholders.

Christine Croucher, Chair of the Special Committee, said: "Getting to this positive moment has required strict governance and management discipline. It has been an exemplary process and I want to thank the Board and everyone involved for their commitment to it."

Since its formation on February 10, 2006, the Special Committee has considered how best to maximize shareholder value. They recommended and the Minacs Board approved the definitive agreement. The Board unanimously recommended that Minacs’ shareholders accept the offer and tender their common shares. The offer will expire 35 days after it is made, unless extended by TransWorks under the terms of the agreement.

It is expected that the TransWorks offer and the Minacs Director's circular will be mailed to shareholders before July 10, 2006. In addition to the customary conditions, TransWorks' offer will be subject to a minimum tender condition that two-thirds of Minacs common shares outstanding, calculated on a fully diluted basis, have been validly deposited under the offer and not withdrawn at the expiry time."

The definitive agreement contains customary provisions prohibiting Minacs from soliciting any other acquisition proposal. It allows the Minacs Board to accept and to recommend a superior proposal, if it is required to do so to avoid breaching its fiduciary duties, and upon payment of a termination fee of CDN$4.5 million. Under the definitive agreement, TransWorks has the right to match any such superior proposal.

Andrea Minacs, Minacs Board Member, and daughter of the founder, said, "I believe that this agreement provides a good opportunity for the company my mother built to reach new heights, becoming an even stronger competitor. I know that she would have liked to have had an opportunity to thank all of the employees for their support and loyalty in these past few months. I deeply regret that after the painful experiences my mother endured in the final months of her life, she will not be able to see this new chapter unfold."

Minacs and TransWorks also announced they have entered into a definitive agreement with the Estate of Elaine Minacs, and with certain entities controlled by it, (the EM Shareholders) whereby the EM Shareholders have agreed to tender all of the common shares of Minacs held by them, subject to the customary conditions. The EM Shareholders own 10,123,304 common shares, representing approximately 46.4% of the outstanding common shares. Under the agreement, the EM Shareholders are entitled to tender their common shares to any superior proposal recommended by the Board of Directors of Minacs.

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