AgJunction Inc. (TSX: AJX) ("
AgJunction"
or the "
Corporation"), is pleased to announce that
it has filed on SEDAR and mailed to shareholders, the information
circular of AgJunction dated October 21, 2021 and related proxy
materials (collectively, the "
Meeting
Materials") prepared in connection with a special
meeting (the "
Meeting") of common shareholders of
AgJunction (the "
AgJunction Shareholders") to be
held at 10:00 am (Scottsdale time) on November 24, 2021 at the
offices of AgJunction at 9105 E Del Comino Drive, Suite 115,
Scottsdale, Arizona, USA. The record date for the Meeting is set at
the close of business on October 21, 2021. The Meeting is being
held pursuant to an interim order from the Court of Queen’s Bench
of Alberta obtained on October 19, 2021.
At the Meeting, AgJunction Shareholders will be
asked to consider, and if deemed advisable, to pass a special
resolution (the "Arrangement
Resolution") approving a statutory arrangement
(the "Arrangement") pursuant to Section 193 of the
Business Corporations Act (Alberta), which provides for the
acquisition by Kubota Corporation or a wholly-owned subsidiary
thereof (the "Purchaser" or
"Kubota") of all the outstanding common shares of
AgJunction for cash consideration (the
"Consideration") of CAD $0.75 per common share
(the "Transaction"), to be completed by way of a
plan of arrangement.
The Board unanimously recommends that AgJunction
Shareholders vote their AgJunction shares in favour of the
Arrangement.
"This Arrangement is the successful culmination
of a lengthy and comprehensive review of strategic alternatives,"
commented Lori Ell, Chair of AgJunction's Board of Directors (the
"Board"). "In excess of 40 potentially interested
parties were contacted to determine their interest level in
pursuing a transaction with AgJunction. The board also considered
financing options, which were determined very likely to be
materially dilutive without necessarily guaranteeing eventual
liquidity for our shareholders. This Transaction offers the
AgJunction Shareholders compelling cash value for their AgJunction
shares.”
The Meeting Materials contain important
information regarding the Transaction, how AgJunction Shareholders
can vote their shares at the Meeting and a summary of the events
leading up to the Transaction, including the reasons that led
AgJunction's Board to unanimously determine that the Transaction is
fair to AgJunction Shareholders and is in the best interests of
AgJunction. AgJunction Shareholders are strongly urged to read the
Meeting Materials.
The Arrangement Agreement and
Shareholder Support
Under the terms of the arrangement agreement
entered into between Kubota Corporation and AgJunction dated
October 7, 2021 in respect of the Arrangement (the
"Arrangement Agreement"), Kubota
will acquire all of the issued and outstanding common shares of
AgJunction for CAD $0.75 per common share in an all-cash
transaction with a total equity value, on a fully diluted basis, of
approximately CAD $91 million.
Each of the senior officers and directors of
AgJunction who own AgJunction shares and who collectively hold 4.5%
of the outstanding AgJunction shares, and IGC Holding LP, a
significant AgJunction Shareholder who holds 15.6% of the
outstanding AgJunction shares, together holding common shares
representing in aggregate 20.1% of the outstanding AgJunction
shares as of the record date for the Meeting, have entered into
support and voting agreements with the Purchaser, pursuant to which
they have agreed to vote in favour of the Arrangement
Resolution.
Reasons for the Arrangement
In making its determination to recommend that
AgJunction Shareholders vote in favour of the Arrangement
Resolution, the Board considered, among other things, the
following factors, as more fully described in the Meeting
Materials:
- Strategic Alternatives and
Business Objectives. While the Board remained positive
with respect to the long-term prospects of the Corporation and its
strategic business plan, management and target market, after a
comprehensive review of the Corporation’s strategic alternatives,
including remaining an independent publicly-traded company and
continuing to pursue the Corporation's strategic plan on a
stand-alone basis, and after contacting in excess of 40 potentially
interested parties in pursuing a strategic transaction with
AgJunction, the Board determined that the Arrangement is the best
alternative available to the Corporation. In particular, to achieve
the Corporation’s strategic plan, the Corporation requires
significant available capital and potential access to additional
capital on a go-forward basis. The Arrangement will provide the
Corporation with an enhanced platform and support to enable the
Corporation to execute on its strategic plan. Given the current
market dynamics, should the Corporation not pursue the Arrangement
and instead complete the financing necessary to pursue the
Corporation’s strategic plan, such financing is very likely to be
materially dilutive to AgJunction Shareholders and not alleviate
the natural execution risk that exists with any growth-oriented
strategic plan.
- Premium to AgJunction
Shareholders. The Consideration, being CAD $0.75 in cash
per common share, to be received by the AgJunction Shareholders
under the Arrangement represents a premium of approximately 60% to
the closing price of the common shares on the Toronto Stock
Exchange on October 7, 2021, the last trading day prior to the
announcement of the Arrangement, and a 57% premium to the 30-day
volume-weighted average trading price of the common shares on the
Toronto Stock Exchange as of October 7, 2021.
- Liquidity and Certainty of
Value. The Arrangement provides AgJunction Shareholders
with immediate liquidity and certainty of value that is not
subject to market fluctuations, and an ability for AgJunction
Shareholders to redeploy such cash in alternative
investments.
The Meeting
The Arrangement Resolution must be approved by
not less than two-thirds of the votes cast by the AgJunction
Shareholders present in person or represented by proxy at the
Meeting. The Arrangement Resolution must also be approved by a
simple majority of the votes cast by AgJunction Shareholders
present in person or represented by proxy at the Meeting, excluding
those AgJunction Shareholders whose votes are required to be
excluded in determining minority approval pursuant to Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions, as further described in the Meeting
Materials.
AgJunction intends to hold the Meeting in
person. However, in view of the current COVID-19 pandemic, the
Corporation asks that, in considering whether to attend the Meeting
in person, AgJunction Shareholders follow the instructions of
Arizona Department of Health Services (https://www.azdhs.gov/). The
Corporation strongly encourages AgJunction Shareholders to vote
their common shares via proxy rather than attending the Meeting in
person, particularly if they are experiencing any of the described
COVID-19 symptoms of fever, cough or difficulty breathing.
Registered AgJunction Shareholders and proxyholders who nonetheless
wish to attend the Meeting in person may be subject to health
screening at the entrance to the Meeting and will be asked to
socially distance themselves from others at the Meeting.
Your vote is important. Whether or not
you plan to attend the Meeting, we encourage you to vote
promptly.
Shareholder Questions and
AssistanceShareholders who have questions regarding the
Arrangement or require assistance with voting may contact
AgJunction’s proxy solicitation agent, Kingsdale Advisors, by
telephone at 1-800-749-9890 (toll-free in North America) or at
416-867-2272 (for collect calls outside of North America) or by
email at contactus@kingsdaleadvisors.com.
About
AgJunction AgJunction Inc. is a global leader
of advanced guidance and autosteering solutions for precision
agriculture applications. Its technologies are critical components
in over 30 of the world’s leading precision Ag manufacturers and
solution providers and it owns or licenses over 200 patents and
patents pending. AgJunction markets its solutions under leading
brand names including Novariant®, Wheelman®, Whirl™ and
Handsfreefarm® and is committed to advancing its vision by bringing
affordable hands-free farming to every farm, regardless of terrain
or size. AgJunction is headquartered in Scottsdale, Arizona, and is
listed on the TSX under the symbol "AJX." For more information,
please go to AgJunction.com.
Forward-Looking
Statements This press release contains
forward-looking information and forward-looking statements within
the meaning of applicable securities laws and is based on the
expectations, estimates and projections of management of AgJunction
as of the date of this press release, unless otherwise stated. The
use of any of the words "expect", "anticipate", "continue",
"estimate", "objective", "ongoing", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information. In
particular, this press release contains, without limitation,
forward-looking information and statements pertaining to: the
Transaction and the anticipated timing of required court and
shareholder approvals; mailing of the Meeting Materials related to
the Meeting and the timing of the Meeting; the anticipated benefits
of the Transaction for AgJunction shareholders; the ability of the
parties to satisfy the other conditions to, and to complete, the
Transaction; and the anticipated timing for the closing of the
Transaction.
With respect to the forward-looking statements
contained in this press release, AgJunction has made assumptions
regarding, among other things, that the Transaction will be
completed on the terms contemplated by the Arrangement Agreement;
the ability of the parties to receive, in a timely manner and on
satisfactory terms, the necessary court, shareholder, stock
exchange and other third party approvals; the ability of the
parties to satisfy, in a timely manner, the other conditions to the
closing of the Transaction; and other expectations and assumptions
concerning the Transaction. Although AgJunction believes that the
expectations reflected in the forward-looking statements contained
in this press release, and the assumptions on which such
forward-looking statements are made, are reasonable, there can be
no assurance that such expectations will prove to be correct.
Readers are cautioned not to place undue reliance on
forward-looking statements included in this press release, as there
can be no assurance that the plans, intentions or expectations upon
which the forward-looking statements are based will occur.
By their nature, forward-looking statements
involve numerous assumptions, known and unknown risks and
uncertainties that contribute to the possibility that predictions,
forecasts, projections and other forward-looking statements will
not occur, which may cause AgJunction's actual performance and
financial results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward-looking statements. These risks and
uncertainties include, without limitation, completion of the
Transaction is subject to a number of conditions which are typical
for transactions of this nature, certain of which are outside the
control of AgJunction, failure to satisfy any of these conditions,
the emergence of a superior proposal or the failure to obtain
approval of AgJunction's shareholders may result in the termination
of the Arrangement Agreement. As a consequence, actual results may
differ materially from those anticipated in the forward-looking
statements.
Readers are cautioned that the forgoing lists of
factors are not exhaustive. Additional information on these and
other factors that could affect AgJunction's operations and
financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com) and at AgJunction's website
(AgJunction.com). Furthermore, the forward-looking statements
contained in this press release are made as at the date of this
press release and AgJunction does not undertake any obligation to
update publicly or to revise any of the forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.
This release does not constitute an offer to
purchase or a solicitation of an offer to sell securities.
Shareholders are advised to review any documents that may be filed
with securities regulatory authorities and any subsequent
announcements because they will contain important information
regarding the Transaction and the terms and conditions thereof.
Contact:
MediaAgJunction Inc.press@agjunction.com
Investor RelationsGateway Investor
RelationsCody Slach or Cody Cree1-949-574-3860AJX@gatewayir.com