Carmanah Enters into Arrangement Agreement for Going Private Transaction

July 4, 2019
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VICTORIA, BC, CANADA  – Carmanah Technologies Corporation (TSX: CMH) (the “Company” or “Carmanah”) announces that it has entered into an arrangement agreement (the “Arrangement Agreement”) with CMH Acquisition Corp. (“CMH Acquisition”) (an entity controlled by two of the current directors of the Company, James Meekison and Terry Holland), JDM Investment Holdings Inc. (“JDM”) and TMH Capital Limited Partnership (together with JDM, the “Guarantors”), pursuant to which CMH Acquisition will acquire all of the issued and outstanding common shares in the capital of Carmanah (“Carmanah Shares”), other than those Carmanah Shares currently owned by certain shareholders who have entered into support, voting and rollover agreements with CMH Acquisition (the “Rollover Shareholders”), pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”). All currency is stated in Canadian dollars.

Mr. Meekison and Mr. Holland are both current directors of Carmanah and, together, own or control a total of 5,709,904 Carmanah Shares, representing in aggregate approximately 32.7% of the currently issued and outstanding Carmanah Shares.

Under the Arrangement, Carmanah shareholders will receive $7.35 in cash for each Carmanah Share they own (the “Consideration”), representing a premium of 7.5% to Carmanah’s closing share price of $6.84 on May 6, 2019, the final trading day prior to the press release on May 7, 2019 disclosing the non-binding proposal to acquire all of the shares not currently controlled, directly or indirectly, by James Meekison or Terry Holland.

As contemplated in the Arrangement Agreement, prior to the completion of the Arrangement, Mr. Meekison and Mr. Holland, and entities controlled by them, and John Simmons, CEO and a director of Carmanah (collectively, the “Rollover Shareholders”), have agreed to transfer certain Caramanah Shares they own to the Purchaser in exchange for shares of the Purchaser, pursuant to support, voting and rollover agreements entered into with the Purchaser (the “Rollover Agreements”). Accordingly, upon the completion of the Arrangement, Mr. Meekison, Mr. Holland and Mr. Simmons will, directly or indirectly, solely own the Purchaser. Pursuant to the Rollover Agreements, Mr. Meekison and Mr. Holland have agreed to transfer all of the Carmanah shares they hold, directly or indirectly, to the Purchaser and Mr. Simmons has agreed to transfer approximately 7.3% of his Carmanah shares to the Purchaser, with the remainder to be acquired by the Purchaser under the terms of the Arrangement. The Rollover Shareholders have also agreed, subject to the terms and conditions of the Rollover Agreements, to vote their Carmanah Shares and options to purchase Carmanah Shares (“Carmanah Options”) in favour of the Arrangement.

“We are pleased to have entered into definitive agreements that will result in the privatization of the Company,” said John Simmons, CEO.  “The transaction, should it receive all required approvals, provides fair value for our shareholders and will allow the Company to continue its development in a much more efficient and private company structure.”


Summary of the Arrangement

The Arrangement is structured as a plan of arrangement pursuant to the Business Corporations Act (British Columbia) and will, among other conditions, require the approval of: (i) the Supreme Court of British Columbia, and (ii) the shareholders and optionholders of the Company at a meeting of securityholders to be held by the Company by (a) at least two-thirds of the votes cast by Carmanah shareholders at such meeting; (b) a simple majority of the votes cast by Carmanah shareholders at such meeting, excluding the Rollover Shareholders and any other Carmanah shareholders excluded for the purpose of such vote in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions; and (iii) at least two-thirds of the votes cast by the Carmanah shareholders and optionholders voting together as a single class at such meeting.

The board of directors of Carmanah (the “Board”), having received legal and financial advice and a recommendation from a special committee of the Board consisting of the sole independent and uninterested director of Carmanah (the “Special Committee”), has approved the Arrangement (with interested directors abstaining from voting) and recommends that shareholders and optionholders of Carmanah vote in favour of the Arrangement. The Special Committee, in conducting its review of the Arrangement, was advised by Capital West Partners (“Capital West”) as its financial advisor. In addition, Capital West provided the Special Committee and the Board with a fairness opinion, stating that in its opinion, based upon and subject to the assumptions, limitations, and qualifications set forth therein, the Consideration to be received by Carmanah shareholders (other than the Rollover Shareholders with respect to their Carmanah Shares) under the Arrangement is fair, from a financial point of view, to the Carmanah shareholders (other than the Rollover Shareholders with respect to their Carmanah Shares).

In connection with the Arrangement, CMH Acquisition has entered into support and voting agreements (the “Support and Voting Agreements”) with Michael Sonnenfeldt and certain other Carmanah shareholders (the “Specified Shareholders”) and each director and officer of the Company who owns Carmanah Shares or Carmanah Options (other than the Rollover Shareholders and their affiliates), pursuant to which the Specified Shareholders and such directors and officers have agreed, subject to the terms and conditions of the Support and Voting Agreements, to vote their Carmanah Shares and Carmanah Options in favour of the Arrangement. The Specified Shareholders and such directors and officers of the Company collectively beneficially own or exercise control over 4,775,339 Carmanah Shares, representing approximately 27.4% of the issued and outstanding Carmanah Shares, and 907,546 Carmanah Options, representing approximately 64.0% of the issued and outstanding Carmanah Options, and, together with the Rollover Shareholders, collectively beneficially own or exercise control over 10,485,243 Carmanah Shares, representing approximately 60.1% of the issued and outstanding Carmanah Shares, and 1,107,546 Carmanah Options, representing approximately 78.1% of the issued and outstanding Carmanah Options.

Holders of Carmanah Options will receive a cash payment equal to the difference (if any) between the Consideration ($7.35 per Common Share) and the applicable exercise price for each Carmanah Option held as of the date the Arrangement becomes effective, less applicable withholdings.

In addition to the aforementioned approvals, completion of the Arrangement is subject to other customary conditions. The Arrangement is expected to close in mid-August 2019.

The Arrangement Agreement provides for customary non-solicitation covenants on the part of Carmanah and a right in favour of the CMH Acquisition to match any unsolicited superior proposal. In the event that the Arrangement is not completed in certain circumstances, including the acceptance of a superior proposal, Carmanah has agreed to pay CMH Acquisition a termination fee of $2 million. If CMH Acquisition fails, under certain circumstances, to complete the Arrangement, and Carmanah terminates the Arrangement Agreement in accordance with its terms, CMH Acquisition has agreed to pay Carmanah an expense reimbursement fee of $2 million, and each of the Guarantors, jointly and severally, has guaranteed the payment of such fee.

The full details of the Arrangement will be set out in a management information circular, which will be mailed to Carmanah shareholders and filed with the Canadian securities regulatory authorities during July 2019. The documents will also be available under Carmanah’s profile on SEDAR ( and on Carmanah’s website (



Carmanah’s financial advisor is Capital West Partners and its legal advisor is Borden Ladner Gervais LLP. CMH Acquisition’s legal advisor is Fasken Martineau DuMoulin LLP.


About Carmanah Technologies Corporation

Carmanah designs, develops and distributes a portfolio of products focused on energy optimized LED solutions for infrastructure. Since 1996, we have earned a global reputation for delivering durable, dependable, efficient and cost-effective solutions for industrial applications that perform in some of the world’s harshest environments. We manage our business within three reportable segments:  Signals, Illumination and Offshore. The Signals segment serves the Traffic and Telematics markets.  The Illumination segment provides solar powered LED outdoor street lights for municipal and commercial customers, while the Offshore segment specializes in the provision of comprehensive safety and marking systems for offshore wind farms.



Carmanah Technologies Corporation:

Evan Brown, (250) 380-0052

Chief Financial Officer/Corporate Secretary


This release may contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation.  All information contained herein that is not historical in nature may constitute forward-looking information.  Often, but not always, forward-looking statements can be identified by the use of words such as  “will” and “expected” or variations of such words and phrases.  Forward-looking statements herein include, but are not limited to, statements regarding the anticipated Arrangement, including receipt of any required approvals, and the timing and anticipated benefits thereof and are based on management’s current expectations and assumptions.  Those expectations and assumptions are currently considered reasonable by management but are inherently subject to business, market and economic risks, uncertainties, and contingencies which may cause the actual results, performance, or achievements of Carmanah to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.


These forward-looking statements are based on management’s current expectations and beliefs but given the uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward-looking statements or information. Carmanah disclaims any obligation to update, or to publicly announce, any such statements, events or developments except as required by law. Risk factors include, among others: the risk that the Arrangement may not close on a timely basis, the risk that the Arrangement Agreement may be terminated, the risk that all conditions precedent to the Arrangement may not be satisfied, the risk that Carmanah will incur costs and may have to make a termination or expense payment and the risk that the market price for Carmanah Shares may decline.


For additional information on these risks and uncertainties, see Carmanah’s most recently filed Annual Information Form (“AIF”) and Annual MD&A (“MD&A”), which are available on SEDAR at and on the Company’s website at The risk factors identified in the AIF and MD&A are not intended to represent a complete list of factors that could affect Carmanah. Accordingly, readers should not place undue reliance on forward-looking statements. Carmanah does not assume any obligation to update the forward-looking information contained in this press release, unless required by law.