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Classified in: Mining industry, Business
Subject: CON

Polaris Announces Arrangement Agreement with U.S. Concrete and Termination of Arrangement Agreement with Vulcan Materials

VANCOUVER, Sept. 29, 2017 /PRNewswire/ - Polaris Materials Corporation (TSX:PLS) (the "Company" or "Polaris"), announced today that it has entered into an arrangement agreement (the "USCR Arrangement Agreement") with U.S. Concrete, Inc. (NASDAQ:USCR) and a wholly-owned indirect subsidiary of U.S. Concrete, Inc. (together, "U.S. Concrete"), pursuant to which U.S. Concrete will acquire all of the issued and outstanding common shares of Polaris for C$3.40 per share in cash by way of a statutory plan of arrangement (the "USCR Arrangement").  Prior to entering into the USCR Arrangement Agreement, Polaris terminated the previously announced arrangement agreement (the "Vulcan Agreement") between the Company, Vulcan Materials Company ("Vulcan") and a wholly-owned subsidiary of Vulcan (the "Original Purchaser") dated August 25, 2017.  In connection with the termination of the Vulcan Arrangement Agreement, the Company paid C$10 million to Vulcan as a termination fee (the "Termination Fee") in accordance with the Vulcan Agreement.  The price per share in the USCR Arrangement Agreement implies an aggregate fully diluted equity value for Polaris of approximately C$309 million.

The Company's special meeting of securityholders scheduled for October 20, 2017 will be adjourned and a new special meeting of the Company's securityholders to consider the USCR Arrangement will be held on a date to be determined by the Board of Directors of Polaris (the "Special Meeting").

Transaction Highlights

"We are pleased to have signed an agreement with U.S. Concrete in respect of its proposal to acquire Polaris.  The offer represents increased value for our shareholders and U.S. Concrete has committed to work closely with Polaris, its First Nations partners, customers and other stakeholders to ensure a smooth transition.  U.S. Concrete has used our products in a number of marquis projects in California and is committed to ensuring a smooth transition," said Ken Palko, President and CEO of Polaris.

"The Special Committee and the Board of Directors of Polaris are pleased to provide its recommendation to support the agreement with U.S. Concrete.  The new agreement provides increased value for our shareholders and will continue to provide value to our First Nations partners, employees and other stakeholders in the future." said Terry Lyons, Chairman of the Board of Directors of Polaris.

"We believe that Polaris is an ideal strategic fit and enables a replication in California of our vertically integrated business model that we successfully operate in New York" said U.S. Concrete's President, CEO and Vice Chairman William J. Sandbrook. "The acquisition of Polaris will provide U.S. Concrete with long term, high quality aggregate reserves and is expected to deliver meaningful synergies and strengthen the Company's strategic position in the highly attractive, aggregate supply-constrained Californian markets. Following completion of the acquisition, U.S. Concrete expects to have the capability to self-supply a large majority of its market leading ready-mixed concrete operations' aggregate requirements in Northern California and to drive increased production volumes at Polaris' Orca Quarry. The acquisition also provides us an entrance into Southern California through the Polaris-operated Long Beach Terminal."

USCR Arrangement Details

The transaction will be implemented by way of the USCR Arrangement under the Business Corporations Act (British Columbia).  The implementation of the USCR Arrangement will be subject to approval by the Affected Securityholders of Polaris at a Special Meeting, which is expected to be held in the fourth quarter of 2017.  The USCR Arrangement will require the approval at the Special Meeting of 66 2/3% of all votes cast by shareholders of Polaris, 66 2/3% of all votes cast by the Affected Securityholders voting as a single class and a majority of all votes cast by the shareholders of Polaris after excluding votes of U.S. Concrete (if any) and any other persons whose votes must be excluded in accordance with Multilateral Instrument 61-101.  The USCR Arrangement is also subject to the approval of the British Columbia Supreme Court and certain closing conditions customary for a transaction of this nature. The approval of shareholders of U.S. Concrete is not required in connection with the USCR Arrangement.  The USCR Arrangement will be financed with cash on hand and is not subject to any financing contingency.

The USCR Arrangement has been reviewed by the Special Committee of Polaris and has been unanimously approved by the Board of Directors of Polaris following the unanimous recommendation of the Special Committee.  The Board of Directors has also unanimously determined that the transaction is fair to its shareholders and the Affected Securityholders, and that it is in the best interests of Polaris and unanimously recommends that the Affected Securityholders vote in favour of the transaction. The Special Committee has received a fairness opinion from Fort Capital Partners ("Fort Capital") to the effect that the consideration payable under the Arrangement Agreement is fair, from a financial point of view, to the shareholders of Polaris. The Board of Directors has received a fairness opinion from Canaccord Genuity Corp. ("Canaccord Genuity") to the effect that the consideration payable under the USCR Arrangement Agreement is fair, from a financial point of view, to the shareholders of Polaris.  The directors and officers of Polaris have entered into voting agreements whereby they have agreed to, among other things, vote their securities in favour of the USCR Arrangement.

U.S. Concrete has loaned to the Company an aggregate of $10 million by way of an unsecured loan, payable on demand at any time following the earlier of completion of the USCR Arrangement or termination of the USCR Arrangement Agreement, which loan was utilized to pay the Termination Fee under the Vulcan Agreement.


The Board of Directors retained Canaccord Genuity as its exclusive financial advisor.  Fasken Martineau DuMoulin LLP is acting as legal counsel to the Company, Osler, Hoskin & Harcourt LLP is acting as legal counsel to the Special Committee and Dorsey & Whitney LLP is acting as legal counsel to the Company on US matters.

RBC Capital Markets, LLC is serving as U.S. Concrete's financial advisor, NMB Advisory, Inc. is serving as an outside advisor and Akin Gump Strauss Hauer & Feld LLP and Cassels Brock & Blackwell, LLP are serving as U.S. Concrete's legal advisors in the United States and Canada, respectively.

Additional Information About the USCR Arrangement

Copies of the fairness opinions put forth by Fort Capital and Canaccord Genuity, and a description of the various factors considered by the Board of Directors of the Company in its determination to approve the transaction and recommend that Affected Securityholders approve the transaction, as well as other relevant background information, will be included in the management information circular to be sent to the Affected Securityholders in advance of the Special Meeting. The management information circular, the USCR Arrangement Agreement, and certain related documents will be filed with the Canadian securities regulators and will be available on SEDAR at www.sedar.com.

Securityholders who have questions regarding the USCR Arrangement or require assistance with voting may contact the Proxy Solicitation Agent below:

Laurel Hill Advisory Group
North American Toll Free: 1-877-452-7184
International: +1-416-304-0211
By Email: assistance@laurelhill.com

About Polaris Materials Corporation:

Polaris Materials Corporation is engaged in the development and operation of construction aggregate quarries in Canada to supply distribution facilities in the United States through coastal shipping. The Company's active construction aggregate interests consist of its Orca Sand and Gravel Quarry in British Columbia and two associated receiving terminals in Richmond and Long Beach, California. The Company also owns the Black Bear Project located in close proximity to the Orca Quarry, and a controlling interest in the Eagle Rock Quarry Project, located on the coast of central Vancouver Island.

About U.S. Concrete:

U.S. Concrete serves the construction industry in several major markets in the United States through its two business segments: ready-mixed concrete and aggregate products. The Company has 158 standard ready-mixed concrete plants, 17 volumetric ready-mixed concrete facilities, and 17 producing aggregates facilities. During 2016, U.S. Concrete sold approximately 8.1 million cubic yards of ready-mixed concrete and approximately 5.6 million tons of aggregates.

For further information, please contact:
Ken Palko
President & CEO
Polaris Materials Corporation
Tel: (604) 915-5000 Ext. 103

Nicholas Van Dyk
Vice President, Investor Relations and Corporate Development
Polaris Materials Corporation
Tel: (604) 915-5000 Ext. 104

Cautionary Note Regarding Forward Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. These statements and information appear in this document and include estimates, forecasts, information and statements as to management's expectations with respect to, among other things, the completion of the USCR Arrangement, receipt of all approvals, including from the British Columbia Supreme Court and the Affected Securityholders, necessary to complete the USCR Arrangement and the timing of the Special Meeting and the completion of the USCR Arrangement. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", and "scheduled" or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's continuous disclosure documents which are filed with Canadian regulators on SEDAR (www.sedar.com), including in the circular to be sent to the Affected Securityholders in advance of the Special Meeting, under the heading "Risk Factors Relating to the Arrangement" and under the heading "Risk Factors" in the Company's Annual Information Form. Such factors include, amongst others, the receipt of all necessary approvals to complete the USCR Arrangement, the timing of the Special Meeting, the receipt of any superior proposals, and the completion of all conditions to the Arrangement. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, except as required by applicable law. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

SOURCE Polaris Materials Corporation

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News published on 29 september 2017 at 11:45 and distributed by: