Ovivo releases its fiscal 2017 first quarter results
Highlights – Fiscal 2017 Q1
- As announced on July 13, 2016, SKion Water International GmbH (“SKion”) and the Caisse de dépôt et placement du Québec (“the Caisse”) partner to acquire Ovivo for the proposed price of $4.00 per share in cash (the “Transaction”).
- Revenues of $81.8 million, up 8% from the same quarter of the previous fiscal year; 9% increase in new equipment market revenues and 6% growth in Upgrading, Parts and Services market revenues.
- Adjusted EBITDA(1) of $3.0 million, comparable to the corresponding quarter of the previous fiscal year.
- Adjusted net earnings(1) from continuing operations attributable to shareholders of Ovivo Inc. of $0.7 million, up $2.2 million, owing primarily to lower financial charges.
- Backlog of $235.7 million as at June 30, 2016, $26.3 million decrease from the March 31, 2016 level, primarily seen in the Energy market which is currently under the persistent challenging economic conditions and in the Electronic market.
- Total net debt of $1.2 million as at June 30, 2016, slightly higher than as at March 31, 2016. Ovivo received large advances on certain contracts during the fourth quarter of fiscal 2016, without which the debt level would have amounted to between $5.0 million and $10.0 million as at June 30, 2016.
SKion and the Caisse partner to acquire Ovivo: Key Transaction Highlights
- The proposed purchase price of $4.00 in cash per share represents a premium of 28.2% to the Class A subordinate voting shares (“SVS”) closing price on July 12, 2016, a premium of 38.1% to the 30-day volume weighted average SVS price and a premium of 64.1% to the 90-day volume weighted average on the TSX.
- The Transaction total enterprise value is approximately $185 million, including the assumption of indebtedness, which is equivalent to approximately 11x of FY2016 EBITDA(2).
- Ovivo’s Board has concluded that the Transaction is in the best interests of Ovivo and unanimously recommends (Mr. François R. Roy who is also a director of la Caisse abstained from voting) that holders of subordinate voting shares and multiple voting shares vote in favour of the Transaction.
- SKion is an investment company owned by German entrepreneur Susanne Klatten with a strong track record of investing in water technology companies. SKion is partnering with the Caisse, a long-time shareholder of Ovivo, who will increase its ownership from 18.7% to 30% post-transaction.
- Ovivo will continue to operate as a standalone company while leveraging SKion’s water treatment expertise with its other portfolio companies.
- Strong commitment from SKion to maintain Ovivo’s head office in Québec in the long term and to keep the current management team in place, led by Marc Barbeau, President and Chief Executive Officer.
- On July 29, 2016, the Superior Court of Québec granted an interim order confirming the calling and holding of the special meeting of shareholders of the Corporation on September 9, 2016 to vote on the Transaction, the record date as of July 29th, 2016 for shareholders to be entitled to receive notice of and vote at the special meeting, in addition to confirming certain other matters related to the special meeting and the Transaction. The Corporation intends to send a management proxy circular to its shareholders no later than August 15, 2016, which shall include a copy of the interim order.
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