PBS Pacgen Life Science Corporation

Pacgen Life Science Corporation (“Pacgen” or the “Company”) (TSX-V: PBS) announced today that it has reached a definitive agreement pursuant to which General Biologicals Corporation (“GBC”), a Taiwan-based diagnostic and pharmaceutical company, will acquire the issued and outstanding shares of Pacgen in an all cash transaction. 

The proposed transaction will be implemented by way of a court-approved plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). Under the Arrangement, all issued and outstanding common shares of Pacgen (“Common Shares”), other than Common Shares held by GBC, its Executive Chairman and affiliated companies (the “Continuing Shareholders”), will be acquired by GBC at an acquisition price of $0.0275 per Common Share (the “Acquisition Price”). The Acquisition Price represents a premium of approximately 83.3% over the closing price of $0.015 per Common Share on the TSX Venture Exchange (“TSXV”) on July 6, 2020 and a premium of approximately 81.8% over the volume weighted average trading price of $0.0151 per Common Share on the TSX for 30-trading days ending on July 6, 2020. GBC and the Continuing Shareholders hold an aggregate of 14,904,801 Common Shares, representing 23% of the issued and outstanding Common Shares. The implied equity value of the Arrangement is $1.782 million, inclusive of the Common Shares owned by GBC and the Continuing Shareholders.

The Board of Directors of the Company (the “Board”) formed a special committee of independent directors (the “Special Committee”) to, among other things, review and evaluate the terms of the proposal from GBC, to obtain and supervise the preparation of a fairness opinion from Evans and Evans, Inc. (“Evans”), to make a recommendation to the Board in respect of the proposal and to negotiate the terms and conditions of the Arrangement Agreement and related matters. The fairness opinion provided by Evans confirms that, as at July 6, 2020 and subject to certain limitations, assumptions and qualifications set forth therein, the consideration offered to shareholders under the Arrangement is fair, from a financial point of view, to Pacgen shareholders other than GBC and the Continuing Shareholders (the “Public Shareholders”). 

The Special Committee unanimously recommended the Arrangement to the Board. Based on the recommendation of the Special Committee, the fairness opinion of Evans and other factors it considered relevant, the Board (with John Hsuan abstaining due to his directorships with both GBC and Pacgen) has unanimously determined that the Arrangement is fair, from a financial point of view, to the Public Shareholders and unanimously approved the Arrangement Agreement and resolved to recommend that holders of Common Shares vote in favour of the Arrangement.

Full details of the Arrangement will be included in the management information circular of Pacgen that is expected to be mailed to shareholders by end of July 2020. The Arrangement will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will be subject to approval at the annual general and special meeting of Pacgen shareholders expected to be held in mid-August 2020 by (i) 66⅔% of votes cast by shareholders of Pacgen at the meeting and (ii) “majority of the minority” approval under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). 

All of the directors and officers of the Company, who collectively own or exercise control or direction over approximately 40.0% of the outstanding Common Shares, have entered into voting support agreements with GBC pursuant to which they have agreed to vote their Common Shares in favour of the Arrangement, subject to the provisions thereof. For the purposes of the “majority of the minority” approval requirement under MI 61-101, the votes cast by the Continuing Shareholders and their affiliates will be excluded.

The Arrangement Agreement provides for, among other things customary board support and non-solicitation covenants, including “fiduciary out” provisions that allow Pacgen to accept a superior proposal, subject to a right to match in favour of GBC. The Arrangement Agreement also provides for a termination fee of $150,000 to be paid by Pacgen to GBC if the Arrangement Agreement is terminated in certain specified circumstances, including the termination of the Arrangement Agreement by Pacgen in order to accept a superior proposal. In addition to shareholder and court approvals, the Arrangement is subject to customary closing conditions and approvals including, the approval of the TSXV.

About PacgenPacgen is a life sciences company focused on building a global commercial platform to market innovative consumer health products developed by SMEs. Currently, the Company sells and markets over sixty different products in oral care, skin care and health supplement segments. Products under the tradename of P113+™ are marketed in Asia by GBC through a sublicense arrangement. The Company is entitled to royalties based on product sales by GBC. For additional information, please visit www.pacgenlife.com.

NEITHER THE 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.

Forward looking Statements

Certain statements included in this press release, including without limitation statements with respect to the completion of the Arrangement, may be considered forward-looking. Pacgen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For all forward-looking statements, Pacgen claims the safe harbour for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

For further information, please contact:Christina YipPresident and Chief Executive Officer Tel: 778-389-4323 or 604-436-4388Email: christina.yip@pacgenlife.com