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All outstanding common shares of Points to be acquired for US$25.00 per share
TORONTO, May 09, 2022 (GLOBE NEWSWIRE) -- Points.com Inc. (TSX:PTS) (NASDAQ:PCOM) (“Points” or the “Company”), the global leader in powering loyalty commerce, is pleased to announce that it has entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which a wholly-owned subsidiary (the “Purchaser”) of Plusgrade Parent L.P. (“Plusgrade”), a leading ancillary revenue platform for the global travel industry, will acquire all of the issued and outstanding common shares of the Company for US$25.00 per common share in cash (equivalent to C$32.21 assuming a 1.2882 exchange rate as per the Bank of Canada May 6 noon rate) (the “Consideration”) by way of a statutory plan of arrangement under the Canada Business Corporations Act (the “Transaction”).
The Transaction values Points at approximately US$385 million on an equity value basis and the Consideration represents a 52% premium to the 20–day volume-weighted average price of the Company’s common shares on the Toronto Stock Exchange (“TSX”) for the period ending May 6, 2022.
“We are thrilled to be joining forces with Plusgrade in what will become a truly global leader and provider of value-adding and revenue-generating services for partners in the airline, hospitality, rail and financial services industries,” said Rob MacLean, Chief Executive Officer of Points. “Additionally, we have benefitted from a supportive group of shareholders over the past number of years and are pleased to have created this compelling outcome.”
David Adams, Chairman of Points’ Board of Directors, added: “Points’ board of directors and senior management team are in full support of this transaction, which we believe comes at an attractive valuation that maximizes the value we create for our Shareholders. The all-cash consideration of US$25.00 per share represents a significant premium to our current and historic trading price, and it reflects the continued operating performance strength and strategic synergies we expect to drive with Plusgrade.”
“The combination of our two companies provides a unique opportunity to bring together two Canadian success stories that are each leading operators in different aspects of ancillary revenue and loyalty commerce, to create something much greater, for the benefit of our partners in the global travel industry, and ultimately for the benefit of the traveller,” said Ken Harris, Founder and Chief Executive Officer of Plusgrade. “The strong cultural fit between our teams will act as a catalyst for future combined growth.”
Transaction Highlights
Transaction Summary
Under the terms of the Transaction, Shareholders will receive US$25.00 in cash per common share held. The Transaction will be subject to the approval of (i) at least 66 2/3% of the votes cast by Shareholders at a special meeting of the Shareholders (the “Meeting”); and (ii) a simple majority of the votes cast by Shareholders at the Meeting, excluding votes from certain Shareholders, as required under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions. The Meeting is expected to be held in late June.
In connection with the Transaction, officers and directors of Points collectively holding approximately 6.7% of the issued and outstanding common shares have entered into support and voting agreements with the Purchaser, pursuant to which they have agreed, among other things, to vote their common shares in favour of the Transaction. The Purchaser will fund the Transaction with a combination of equity from Novacap and CDPQ and debt from recognized financial institutions. The Transaction is not subject to a financing condition.
In addition to Shareholder approval, the Transaction is subject to approval by the Ontario Superior Court of Justice (Commercial List) (the “Court”) and certain other regulatory approvals as well as the satisfaction of certain other customary closing conditions. The Arrangement Agreement contains customary non-solicitation, “fiduciary out” and “right to match” provisions, as well as a C$18 million termination fee payable to the Purchaser if the Arrangement Agreement is terminated in certain circumstances. The Arrangement Agreement also provides for payment by the Purchaser of a reverse termination fee to Points of C$27 million and C$45 million if the Arrangement Agreement is terminated in certain specified circumstances, with the fee payable depending on the circumstances of the termination.
Further details of the Transaction and the Arrangement Agreement will be set out in the management information circular (the “Circular”) that will be prepared and mailed to Shareholders in connection with the Meeting, and which will be filed by the Company under its issuer profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Subject to the satisfaction or waiver of all conditions to closing, the Transaction is expected to close in early July 2022. In connection with and subject to closing the Transaction, Points will apply to have its common shares delisted from the TSX and NASDAQ Capital Market (“NASDAQ”) and Points will cease to be a reporting issuer under Canadian and U.S. securities laws.
Board of Directors’ Recommendation and Fairness Opinions
After receiving legal and financial advice and considering a number of factors, the Board of Points unanimously approved the Transaction and unanimously recommends that Shareholders vote in favour of the Transaction at the Meeting. The Board has received an oral fairness opinion from each of RBC Capital Markets and Blair Franklin Capital Partners Inc. which states that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as RBC Capital Markets and Blair Franklin Capital Partners Inc., respectively, considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to Shareholders. Both fairness opinions will be made available to Shareholders in the Circular.
