MONTREAL, April 29, 2014
/CNW Telbec/ - OneCap Investment Corporation, a Capital Pool
Company, ("OneCap") (TSXV: OIC.P) is pleased to announce
that it has accepted on April 24, 2014 an offer to buy all the
outstanding Class A shares (the "Class A Shares")
of 8432155 Canada Inc. ("Canada Inc.") which are
indirectly controlled by Messrs. Daniel Dorey, Pierre Setlakwe, Jean-Guy Lambert and Pierre Bonin, who are all directors of OneCap
(the "Vendors"), subject to certain conditions (the
"Offer"). All the redeemable Class F shares of Canada
Inc. are indirectly controlled by Messrs. Jean-Guy Lambert, Daniel
Dorey, Pierre Albert Jean and
Jean Desmarais who are directors of
OneCap.
Subject to minority shareholder approval, the ability of OneCap
to raise sufficient equity capital and the approval of the TSX
Ventures Exchange (the "Exchange") acquisition by OneCap
from the Vendors of all the Class A Shares pursuant to the
terms of the Offer would constitute the Qualifying Transaction (the
"Qualifying Transaction") of OneCap pursuant to Policy 2.4 -
Capital Pool Companies ("Policy 2.4").
Terms not otherwise defined herein will have the meanings set
out in the Corporate Finance Manual of the Exchange.
OneCap has identified a development opportunity for its
Qualifying Transaction in a potential data centre in Winnipeg for Manitoba Telecom Services Inc.
("MTS") in the beginning of 2013.
Considering that OneCap was not allowed under Policy 2.4 of the
Exchange to make a deposit on a second potential property,
Mr. Daniel Dorey, Chairman of the Board of Directors of
OneCap, has offered to incubate that potential project with MTS in
OneCap Financial Corporation ("Financial"), a corporation
controlled by Mr. Dorey.
Financial signed a Memorandum of Undertaking on March 7, 2013 (the "March 7, 2013
MOU") with MTS for the purpose of acquiring land in
Winnipeg, build a data center and
rent it to MTS.
Financial, pursuant to the terms of the March 7, 2013 MOU
made a purchase offer dated May 21, 2013 with respect to
undeveloped land located in Winnipeg,
Manitoba (the "Data Centre Property"), which offer
was amended on June 21, July 24, August 13 and
November 28, 2013 (the "Purchase
Offer").
On August 19, 2013, Financial assigned its rights in the
Purchase Offer and the March 17, 2013 MOU to Canada Inc.
Canada Inc. was incorporated on August 19, 2013 by some of
the directors of OneCap in order to conclude, and has concluded
with MTS as of December 20, 2013, a construction memorandum of
undertaking and offer to lease for new turnkey data center on the
Data Centre Property (the "Construction and Lease
Offer").
Pursuant to the Construction and Lease Offer, Canada Inc. must
raise about $53 million in equity and
debt financing in order to finance the purchase of the land and the
construction of a data center on the Data Centre Property (the
"MTS Data Centre").
- The MTS Data Centre is being designed to meet Uptime
Institute's Tier III certification, along with other reliability
enhancements.
- The total building space will be approximately 64,000 sf,
inclusive of approximately 25,000 sf of raised floor to
accommodate server racks, with an initial critical power load of
3 MW and connected power up to 7.5 MW.
- The MTS Data Centre location is a 6.3 acre site that has
sufficient land to expand the data centre up to twice the initial
size and connected power. OneCap has not assigned any value
to the potential development of Phase II expansion.
On December 20, 2013, Canada Inc.,
as owner, has signed an agreement with a design-builder, with
respect to the building of the MTS Data Centre on the Data Centre
Property (the "Building Agreement") on a fixed price basis.
Such design-builder has over 20 years of experience
specializing in the design and construction of data centres.
The Building Agreement is bonded as to 50% for performance and 50%
for labour and materials.
On January 2, 2014, Canada Inc.
incorporated 6844244 Manitoba Ltd as a wholly owned subsidiary
("Manitoba Ltd") to hold title to the Data Centre
Property.
Canada Inc., as landlord, has signed on January 16, 2014
with 6842811 Manitoba Inc., a wholly owned subsidiary of MTS, as
tenant, and MTS, as indemnitor, a fifteen year lease with respect
to the MTS Data Centre (the "Lease").
On January 28, 2014, all the
shareholders of Canada Inc. have given OneCap a written commitment
that they will provide their best commercially reasonable efforts
to enable OneCap to acquire a 50% in the MTS Data Centre through
the acquisition of all the outstanding shares of the share capital
of Canada Inc.
OneCap must acquire an interest of at least 50% in the MTS Data
Centre in order that such acquisition qualifies as a "Qualifying
Transaction" pursuant to Policy 2.4.
On February 10, 2014, Manitoba Ltd closed the purchase of
the Data Centre Property.
On February 10, 2014, Manitoba Ltd borrowed $3,000,0000 from FAM Management Limited
Partnership ("FAM LP") secured by a first mortgage for the
same amount on the Data Centre Property (the
"Mortgage").
On March 27, 2014, Canada Inc. and FAM LP have executed a
letter agreement (the "Letter Agreement") confirming the
terms of the $3,000,000 loan to
Manitoba Ltd, establishing the required budget for the purchase of
the land, the construction of the building and other improvements
for the data center and related soft costs and applicable taxes at
approximately $53,000,000, providing
for the creation of FAM–OneCap Data Centre Limited Partnership
("Data LP") and FAM–OneCap Data Centre GP Inc., as
general partner, in which Canada Inc. and FAM LP shall each have a
50% interest. Furthermore, the Letter Agreement provides, in
particular: (i) for the discharge of the Mortgage; (ii) for FAM LP
providing to Canada Inc. a loan in the maximum amount of
$6,500,000 (the "Loan
facility"), $3,000,000 having
been already advanced; (iii) for a capital contribution of
$9,491,750 to Data LP by FAM LP to
maintain its ownership proportion of 49.95% as a limited partner;
(iv) for a capital contribution to Data LP by Canada Inc. of
$3,491,750 and all its interest in
the MTS Data Centre, including the Data Centre Property, the Lease,
the Building Agreement, the shares of Manitoba Ltd and the
Construction and Lease Offer, as well as all the goodwill and
rights related thereto (collectively, the ("Non-Cash
Assets") to maintain its ownership proportion of 49.95% as a
limited partner. FAM LP acknowledged that the fair market
value of the Non-Cash Assets was evaluated at $6,000,000.
As at April 3, 2014, Manitoba Ltd
signed a loan offer with Desjardins Group with respect to a
construction loan and long term financing of $39,000,000 (the "Desjardins Financing
Agreement").
Altus Group Limited has issued on April 7, 2014 a valuation
for the MTS Data Centre based on the Lease at $63,000,000, before any construction change
orders (which have already been provided for through the current
equity contribution) initiated by MTS, which could increase the
Base Rent and therefore increase proportionally said valuation.
On April 22, 2014, FAM Real Estate
Investment Trust issued a press release describing its
participation in the MTS Data Centre through FAM LP.
At a 50% ownership interest, Canada Inc.'s equity investment is
projected to generate $2.9 million of Net Operating Income,
$2.0 million of Adjusted Funds
From Operation, and $1.2 million
of free cash flow after deducting mortgage principal repayments in
the first full year following rent commencement in mid-2015.
The Construction and Lease Offer, the Building Agreement, the
Lease, the Desjardins Financing Agreement and the Letter Agreement
provide for the assignment of the shares of Canada Inc.
The acquisition by OneCap of all the outstanding shares of
Canada Inc. would constitute a "related party" transaction pursuant
to Policy 2.4 and Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI –
61-101") requiring minority shareholder approval.
Pursuant to the terms of the Offer, OneCap will, for a total
consideration of $12 million payable
on October 16, 2014, at the latest:
- Reimburse the Loan facility in full;
- Redeem all the outstanding Class F shares of Canada Inc.;
and
- Purchase all the outstanding Class A Shares fully in cash
or partly in cash and up to $1
million in common shares of OneCap.
After closing of the Qualifying Transaction, the only security
on the Data Centre Property will be the Desjardins Financing
Agreement.
Upon completion of the Qualifying Transaction, the Resulting
Issuer is expected to meet the minimum requirements of the Exchange
for issuers in the real estate sector.
The current directors of OneCap, Messrs. Daniel Dorey, Pierre
Albert Jean, Pierre Bonin,
Pierre Setlakwe, Jean Desmarais and Jean-Guy Lambert will be insiders of the
Resulting Issuer.
Daniel Dorey – Chairman of the
Board
Daniel Dorey possesses
over 20 years of experience in real estate acquisition, integration
of real estate assets and real estate corporations as well as asset
management and real estate financial structuring. Mr. Dorey is
Senior Vice President (Real Estate) Canada Lands Company since
July 2013 and also President of
OneCap Financial Corp., a financial services company involved in
real estate investments and services since 2003. Previously,
he was President of Oxford Quebec from 1995 to 2003. Prior to
Oxford, Mr. Dorey founded Koral
Properties in 1991, which was acquired by Oxford Properties Group
in 1996. He has also worked for Trust General's
Institutional-Commercial-Industrial property brokerage division,
for Edgecombe Realty Advisors and for Mercantile Bank-National
Bank. Mr. Dorey sits on the board of the Youth Protection Agency
Foundation (Fondation CJM). He is past chairman, Urban Development
Institute; past member of the board of the Montréal Economic
Institute; member of the Quebec
Board of Directors, World Presidents' Organization (WPO); and
previous member of the Quebec
Board of Directors of the Young Presidents' Organization
(YPO). He holds an MBA from McGill
University (1985), a Bachelor's degree in Business
Administration from Bishop's University
(1983) as well as a real estate brokerage licence.
Pierre Albert Jean - Chief Financial Officer and
Director
Pierre Albert Jean is the
President of Construction Albert Jean Ltd., a family business
established since 1927 working in the construction industry.
In 1991 he graduated from Concordia
University with a Bachelor's Degree in Civil Engineering and
became a member of the Ordre des ingénieurs du Québec in
2001. On his arrival in the family business in 1991, Mr. Jean
acted as a Project Manager. In 1994, he was then appointed as
Vice-President of Operations and since 2000, he is the President
and Chief Operating Officer of Construction Albert Jean Ltd.
He is also past Chairman of the Board of Directors of the
« Club Richelieu Montreal ». During 8 years, he was
a dedicated member of the Board of Directors of the « Young
President Organisation – Quebec Chapter » and became its
President in 2010. Presently, he is vice-president of the
Board of Directors of « Accueil Bonneau ».
Pierre Setlakwe -
Secretary and Director
Pierre Setlakwe obtained a
B.C.L. and LL.B (Law) from McGill
University in 1986 and a Bachelor of Science (Political
Science) from University of Montreal in
1982. Mr. Setlakwe participates to various real estate
law seminars, including the 2005 Continuing Education course on
Commercial Leasing at Georgetown
University, Faculty of Law. Since obtaining the Quebec Bar
in 1987, he has continuously practiced commercial law within
private law firms, and since 2012 joined De Grandpré Chait
LLP. Mr. Setlakwe is featured as a recommended lawyer in real
estate since the 2011 edition of Chambers Global's The World's
Leading Lawyers for Business. Mr. Setlakwe is
specialized in real estate law and urban development. He was a
member of the Board and President of the Caisse Populaire de
Rivière-des Prairies from 1987 to 1994. Mr. Setlakwe is a founding
member in 1994 of the Société de développement économique
Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est and is
up-to-date still a member of its Board. From 2007 to 2011, Mr.
Setlakwe was a Board member of the Urban Development Institute of
Quebec.
Jean Desmarais – Vice
President and Director
Jean Desmarais is the
President and Chief Executive Officer of Amseco Exploration
Ltd. Previously, he was Vice President at Desjardins
Securities and an investment advisor at Nesbitt Burns. Mr.
Desmarais has worked 18 years in the financial sector.
Pierre Bonin – Vice President
and Director
Pierre Bonin is currently
Chief Information Officer at Videotron since March 3, 2014 and
has been actively involved for the past nine years in the Data
Center industry through various investments and ventures.
Prior to 2005, Mr. Bonin held various executive positions in the
Telecommunication Industry such as Executive Vice-President and CIO
at Microcell Telecommunications Inc. (FIDO) (from January 2001 to May
2005), Vice-President Information Technology as well as
Vice-President Finance and Administration at Bell Canada. Mr.
Bonin is a member of the Board of Directors and chairman of the
audit committee of TelcoBridges, a telecom equipment manufacturer,
and member of the advisory Board of iMetrik, a Machine to Machine
solution provider. Mr. Bonin graduated in Mathematics and
Computer Science from the Université de Sherbrooke (1987) and subsequently received an
MBA from HEC Montréal (1997). He holds the designation of Chartered
Director (C. Dir.) from the Collège des administrateurs de
sociétés, Université Laval and
The Directors College of McMaster
University.
Jean-Guy Lambert –,
Director
Jean-Guy Lambert, MBA,
served as Chief Executive Officer and President of Dacha Capital
Inc, an investment company, from September
1996 until March 2010. Mr. Lambert has more than
thirty-five years of business experience in the areas of corporate
management, investment banking and financial consulting. Mr.
Lambert is currently director and was director and officer of
several reporting issuers in Canada. He has listed a number of private
companies on Canadian and US Exchanges through IPO or RTO.
Mr. Lambert holds a Master's degree in Business Administration
from the University of Sherbrooke.
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange Requirements, majority of the
minority shareholder approval. Where applicable, the transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the transaction, any information released or
received with respect to the transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of a capital pool company should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Caution Concerning Forward-Looking Statements
This press release may contain forward-looking statements with
respect to OneCap. These statements generally can be identified by
use of forward looking words such as "projected to", "may", "will",
"expect", "estimate", "anticipate", "intends", "believe" or
"continue" or the negative thereof or similar variations. The
actual results and performance of OneCap could differ materially
from those expressed or implied by such statements. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Some important
factors that could cause actual results to differ materially from
expectations include, among other things, general economic and
market factors, competition, changes in government regulation and
the factors described from time to time in the documents filed by
OneCap with the securities regulators in Canada. The cautionary statements qualify all
forward looking statements attributable to OneCap and persons
acting on their behalf. Unless otherwise stated or required by
applicable law, all forward-looking statements speak only as of the
date of this press release.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE OneCap Investment Corporation