WINNIPEG, MB, Jan. 23, 2013 /CNW/ - (TSX:NFI, TSX:NFI.DB.U) New Flyer
Industries Inc. ("New Flyer" or the "Company"), the leading
manufacturer of heavy-duty transit buses in Canada and the United
States, announced today that Marcopolo S.A. has agreed to make a
strategic investment of C$116 million to acquire 11,087,834 newly
issued common shares, representing a 19.99% stake in New Flyer. Each
common share will be issued at a price of C$10.50 per share, or a 20%
premium to the 30 day volume-weighted average trading price of New
Flyer's common shares on the TSX for the period ending January 23,
2013. 4,925,530common shares will be issued to Marcopolo upon closing expected on or
prior to March 1, 2013 for aggregate consideration of C$51.7 millionwith the remainder of the shares to be issued to Marcopolo at the same
price per share in one tranche over the next 12 months following
closing as determined by New Flyer based on its investment and
financing needs and in certain other circumstances. The investment is
subject to customary TSX approval.
Founded in 1949, and headquartered in Caxias do Sul, Brazil, Marcopolo
is one of the world's largest bus builders and is primarily engaged in
the manufacturing of buses, bus bodies, and components with a product
line covering a wide range of models including: coach, urban,
micro-buses, and mini-buses. Marcopolo is listed on the Brazilian stock
exchange (BM&F Bovespa: POMO3, POMO4).
With anticipated annual net revenues of approximately US$1.9 billion in
2012, Marcopolo has a market capitalization of approximately US$2.8
billion and employs over 22,000 people around the world. Marcopolo
manufactures over 32,000 buses annually - 60% are for the Brazilian
market and 40% for international markets. Bus manufacturing is carried
out directly by Marcopolo and through various joint ventures with
companies like Daimler, Tata Motors, and others in seventeen plants
located in Brazil, South Africa, Argentina, Australia, Colombia, Egypt,
India and Mexico. Marcopolo also has a factory for bus parts and
component fabrication in China. Further information is available on
Marcopolo's web site at www.marcopolo.com.br.
Marcopolo's most recent investments include: a 75% stake in Volgren,
Australia's largest bus body manufacturer, and a 51% share of Metalsur
Carrocerias S.R.L, an Argentine company which specializes in
manufacturing intercity bus bodies through a Marcopolo controlled
company called Metalpar. Marcopolo also owns minority stakes in the
following Brazilian parts suppliers: Spheros (heating/ventilation/air
conditioning), WSUL (seating foam), and MVC (plastics).
Marcopolo's strategic plan has included a stated intent to enter the
Canadian and US market and as such it identified New Flyer as an
attractive investment given the Company's leading position in the
public transit market, operational excellence, commitment to LEAN
practises, and capacity to innovate and grow.
New Flyer plans to use the net proceeds of the Marcopolo investment to
continue to support its future growth and diversification initiatives
in accordance with the Company's strategic plan and for general
corporate purposes. In May 2012 of a Joint Venture with the UK's
largest bus builder, Alexander Dennis Limited, to introduce a MiDi bus
in Canada and the US to both public and private operators. In August
2012 New Flyer completed its conversion from an Income Deposit Security
structure to a common share corporation.
The two companies also signed a Memorandum of Understanding to explore
opportunities to cooperate on engineering, technical, purchasing and
operational matters, with a focus on reducing New Flyer's bus
manufacturing and aftermarket part costs and enhancing New Flyer's
competitiveness. The companies further agreed to assess Marcopolo's
technology and products for possible introduction into the Canadian and
US markets through New Flyer as well as New Flyer's technology and
products for potential distribution into global markets.
The investment agreement permits Marcopolo to nominate a member to the
Board of Directors of New Flyer (the "Board") while Marcopolo holds at
least 10% of the outstanding common shares of New Flyer and grants
Marcopolo pre-emptive rights to purchase additional securities in
certain circumstances to maintain its proportionate interest in New
Flyer. Marcopolo has agreed to certain disposition and standstill
restrictions including a requirement to hold the shares it acquires for
a period of at least two years and a restriction on acquisitions of
additional New Flyer securities and certain other actions for a period
of at least two years. The agreement also provides that if New Flyer in
the future enters into an agreement with a third party providing for
the acquisition of all of New Flyer's shares or assets, then Marcopolo
will, subject to certain exceptions, agree to vote in favor of and to
sell its shares as part of the transaction unless Marcopolo has made an
alternative proposal that the Board believes is superior or that the
shareholders have determined to accept.
The Honourable Brian Tobin P.C., O.C., Chair of the New Flyer Board of
Directors, said "We are thrilled to have such a respected global leader
in the industry invested in our company and actively supporting New
Flyer's strategic plan. We were approached by Marcopolo nearly one
year ago and both companies have invested considerable time and
resources to get to know one another, thereby ensuring that this
investment makes sound strategic, economic and cultural sense for each
of us".
Paul Soubry, President and CEO of New Flyer added: "Marcopolo is a
world-class company with extensive technology, expertise and experience
and we look forward to working with them to take New Flyer to the next
level. We were impressed with Marcopolo on so many levels: from
product range, to technology and capability, to their commitment to all
stakeholders (employees, customers, shareholders, suppliers and their
communities in which they operate). This investment will allow us to be
more aggressive in executing our growth, diversification and new
product development agenda while giving us timing flexibility in
drawing the second portion of the funds to ensure that the additional
dividend requirements can be better matched to cash flows generated
from the use of those funds".
José Rubens de la Rosa, CEO of Marcopolo, said "The investment is in
line with Marcopolo's growth strategy and marks its definitive entry
into the U.S. and Canadian markets, two of the most sophisticated and
advanced in the world. New Flyer has experience in manufacturing
products with high standards in terms of specifications and
sophistication and in the development and application of sustainable
technologies, such as hybrid vehicles powered by renewable and
alternative fuels."
BMO Capital Markets acted as financial advisor to New Flyer on the
transaction and Blair Franklin acted as financial advisor to Marcopolo.
A conference call for analysts and interested listeners will be held on
Thursday January 24, 2013 at 1:00 p.m. (ET). The call-in number for
listeners is 888-231-8191 or 647-427-7450. A live audio feed of the
call will also be available at http://www.newswire.ca/en/webcast/detail/1103267/1202307. Management will discuss the Marcopolo Strategic Investment Transaction
presentation which will be available on New Flyer's web site at http://www.newflyer.com/index/events_and_presentations. A replay of the call will be available from 4:00 p.m. (ET) on January
24th until 11:59 p.m. (ET) on January 31st. To access the replay, call
toll free 1-855-859-2056 or 416-849-0833 and then enter pass code
number 92676348. The replay will also be available on New Flyer's web
site at http://www.newflyer.com/index/events_and_presentations.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in
Canada and the United States. The Company's three manufacturing
facilities - in Winnipeg, MB; St. Cloud, MN and Crookston, MN - are all
ISO 9001, ISO 14001 and OHSAS 18001 certified. The Company currently
operates a parts fabrication facility in Elkhart, IN and four parts
distribution centers in Winnipeg, MB; Brampton, ON; Erlanger, KY and
Fresno, CA. The Company also operates a New Product Development center
in Winnipeg, MB and a service center in Arnprior, ON. With a skilled
workforce of over 2,200 employees, New Flyer is a technology leader,
offering the broadest product line in the industry, including drive
systems powered by clean diesel, natural gas, electric trolley as well
as energy-efficient diesel-electric hybrid and now all-electric battery
vehicles. New Flyer has delivered over 32,000 heavy-duty buses in
Canada and the United States. All products are supported with an
industry-leading, comprehensive parts and service network. Further
information is available on New Flyer's web site at www.newflyer.com. The common shares and convertible unsecured subordinated debentures of
New Flyer are traded on the Toronto Stock Exchange under the symbols
NFI and NFI.DB.U, respectively.
Forward-Looking Statements
This press release may contain forward-looking statements relating to
expected future events, including the timing, and completion, of the
investment described herein and commercial cooperation between New
Flyer and Marcopolo. Although the forward-looking statements contained
in this press release are based upon what management believes to be
reasonable assumptions, investors cannot be assured that actual results
will be consistent with these forward-looking statements, and the
differences may be material. Actual results may differ materially from
management expectations as projected in such forward-looking statements
for a variety of reasons, including satisfaction of conditions to
closing contained in the investment agreement, risks related to
acquisitions, joint ventures and other strategic relationships with
third parties, market and general economic conditions and economic
conditions of and funding availability for customers to purchase buses
and to purchase parts or services, customers may not exercise options
to purchase additional buses, the ability of customers to terminate
contracts for convenience and the other risks and uncertainties
discussed in the materials filed with the Canadian securities
regulatory authorities and available on SEDAR at www.sedar.com. Due to the potential impact of these factors, the Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, unless required by applicable law.
SOURCE: New Flyer Industries Inc.
