Westaim Corp. (WED.TO) reached a definitive agreement with Intact Financial Corp. (IFC.TO), under which Intact has agreed to purchase Westaim's wholly-owned subsidiary, JEVCO Insurance Co., for $530 million cash. Adjusting for the payment of a $30 million cash dividend paid by Jevco to Westaim during the 2012 first quarter, the purchase price is about 1.38 times the net book value of Jevco as at December 31, 2011.
After consultation with its financial and legal advisors, Westaim's board has unanimously approved entering into the agreement and urges that Westaim shareholders approve the transaction at a special meeting of shareholders to be convened and held for the purpose of approving the transaction. The transaction, which may close during the fall, is conditional upon the approval of Westaim's shareholders and the receipt of the required regulatory approvals. Following the transaction closure, it is anticipated that Westaim would distribute substantially all of the net proceeds from the sale in the form of a return of capital to the shareholders of Westaim.
Westaim's CEO commented, "We expect this transaction to produce an attractive return to Westaim shareholders who participated in our equity financing at the time of the Jevco acquisition in March 2010."
by RTT Staff Writer
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