PHOTON CONTROL INC. To proactively deal with the ongoing public impact of the COVID-19 pandemic, and to mitigate risks to the health and safety of communities, shareholders, employees, directors and other stakeholders, the Meeting will be held in a virtual-only format conducted by live audio webcast at https://web.lumiagm.com/264239665 on
On
The Meeting Materials contain important information regarding the Transaction, how Securityholders can participate and vote at the Meeting, and the background that led to the Plan of Arrangement, including the reasons that led the special committee of independent directors of the Company (the “Special Committee”) as well as the board of directors of the Company (the “Board”) to unanimously determine that the Transaction is in the best interests of the Company and its Securityholders, to approve the Arrangement Agreement and to recommend that Securityholders vote IN FAVOUR of the Transaction. Securityholders should carefully review all Meeting Materials as they contain important information concerning the Arrangement and the rights and entitlements of the Securityholders. The Meeting Materials have been filed by the Company on SEDAR and are available thereat under the Company’s profile at www.sedar.com.
Pursuant to the terms of the Interim Order, Securityholders of record at the close of business on
Pursuant to the terms of the Interim Order, to be effective, the Transaction must be approved by (i) at least two-thirds of the votes cast by the shareholders of the Company present online or represented by proxy at the Meeting, and (ii) at least two-thirds of the votes cast by the Securityholders, voting together as a single class, present online or represented by proxy at the Meeting.
Subject to obtaining approval of the Transaction at the Meeting, and the satisfaction of the other customary conditions to completion of the Transaction, including final approval of the Court, all as more particular described in the Meeting Materials, the Transaction is expected to close on or around
Reasons for the Arrangement
In unanimously determining to recommend that the Securityholders vote in favour of the Transaction, the Board and the Special Committee considered a number of factors, as further described in the Meeting Materials, including, but not limited to:
- Premium to Trading Price. The Consideration (as defined below) represents a 10% premium to the all-time trading high prior to the announcement of the Arrangement of
$3.28 , a premium of 16% to the closing price of$3.11 on the TSX onMay 7, 2021 , being the last trading day before the Transaction was announced, and a premium of 26% to the volume weighted average price for the 30 trading days ended on that same date. - Review of Strategic Alternatives. Prior to entering into the Arrangement Agreement, the Company regularly evaluated business and strategic opportunities with the objective of maximizing shareholder value in a manner consistent with the best interests of the Company and its shareholders.
- Attractive Valuation in an Increasingly Competitive Market. The Arrangement with MKS delivers certainty and immediate cash consideration to Securityholders at a valuation which may not be achievable by Photon on a stand-alone basis in the future, or at all.
- Credibility of MKS to Complete the Arrangement. MKS is a credible and reputable
U.S. public company and has completed several successful acquisitions inNorth America . The Board therefore believes that MKS has the financial capability to consummate the Transaction. - Fairness Opinion. The Board and the Special Committee received a fairness opinion from their financial advisor in respect of the Arrangement to the effect that, as of the date thereof and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by the
Photon Control shareholders pursuant to the Arrangement is fair from, a financial point of view, to such shareholders. - Securityholder Value. Management of the Company and the Board, under the supervision of the Special Committee, concluded that the Arrangement represents the best available opportunity to maximize Securityholder value given current industry, economic and market conditions and trends.
- Likelihood of Closing. Assuming the required Securityholder approval is obtained at the Meeting, the Transaction is likely to be completed given the limited number of conditions to closing (including that there is no financing condition).
Transaction Details
Under the terms of the Arrangement,
The Arrangement Agreement provides for, among other things, customary non-solicitation covenants from the Company, including customary “fiduciary out” provisions that allow
All directors and executive officers of
Greenhill & Co. is acting as financial advisor to MKS.
Shareholder Questions and Voting Assistance
For any questions or assistance with voting,
About
Investor Relations Contact:
IR@photoncontrol.com
About MKS Instruments, Inc.
MKS Instruments, Inc. is a global provider of instruments, systems, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for its customers. MKS’ products are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, lasers, photonics, optics, precision motion control, vibration control and laser-based manufacturing systems solutions. MKS also provides services relating to the maintenance and repair of its products, installation services and training. MKS’ primary served markets include semiconductor, industrial technologies, life and health sciences, and research and defense. Additional information can be found at www.mksinst.com.
Forward-looking Statements
This news release contains “forward-looking statements” within the meaning of applicable Canadian securities legislation. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “could”, “would”, “should”, “might”, “expect”, “estimate”, “anticipate”, “intend”, “consider”, “believe”, “plan”, “project”, “assume”, “strategy”, “goals”, “objectives”, “potential”, “possible”, “confident” or “continue” or the negative thereof or similar variations. Such forward-looking statements concern the business of the Company and the Transaction (including, without limitation, in respect of the final Court approval to be obtained in connection therewith, the approval of the Transaction by the Securityholders and the expected timing of closing of the Transaction).
These forward-looking statements are based on certain factors and assumptions, including, without limitation: the Company’s ability to develop, manufacture and sell new products that meet the needs of its customers and gain commercial acceptance; the Company’s ability to continue to sell its products in line with expected quantity, price and delivery times; the Company’s ability to attract new business; continued and future demand for the Company’s products; continued sales to the Company’s major customers; the Company’s operations not being adversely affected by supply, operating, cyber security, litigation or regulatory risks; the Company’s ability to react to the cyclical nature of the semiconductor industry; the Company’s ability to enhance revenue diversification and open new market opportunities; and, the Company’s expectations regarding market risk, including interest rate changes, tax changes and foreign currency fluctuations; and, in respect of the Transaction, the Company’s ability to meet all condition precedents set forth in the Arrangement Agreement (including that there be no material adverse effect on the Company before closing of the Transaction) prior to the outside date set forth therein, the Company’s ability to secure the final Court approval in connection with the Transaction and the approval of the Transaction by the Securityholders.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward looking statements, including, without limitation: risks related to the completion of the Transaction, including the failure to obtain Securityholder or final Court approval in connection with the Transaction; uncertainties relating to the market for the Company’s products and maintaining a stable level of orders; fluctuations in revenue as a result of volatility in the markets and product mix; risks relating to the Company’s present reliance on its major customers for the majority of its sales; risks relating to the Company’s reliance on the financial health of and timing of cycles in the semiconductor industry; risks relating to the development of competing technologies and the possibility of increased competition; the effect of slow growth in
The foregoing assumptions, risks and uncertainties are not exhaustive of the items that may affect our forward-looking statements. Should underlying assumptions prove to be incorrect or one or more of these risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking statements. The Company’s forward-looking statements are based on beliefs, expectations, and opinions of management on the date the statements are made.
For the reasons set forth above, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements included herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.
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