SARMENT HOLDING LIMITED (the “
Company” or
“
SAIS Group”) (TSXV: SAIS), today announced that,
further to its news release dated May 29, 2019, the Company has
entered into a non-binding, exclusive letter of intent dated June
21st, 2019 (the “
LOI”) with strategic buyers
comprised of certain insiders and controlling shareholders of the
Company (the “
Buyers”), pursuant to which the
Company would sell its traditional luxury distribution business to
the Buyers (the “
Proposed
Transaction”).
Under the terms of the LOI, it is intended that
the Company would continue to restructure its group structure to
create a stand-alone wine and spirits distribution division under a
newly incorporated holding company Sarment Wine & Spirits
Holding Pte. Ltd. (“Target”) and that the Proposed
Transaction would be carried out by way of a sale of 100% of the
outstanding shares of Target by the Company to the Buyers. Final
legal terms for the Proposed Transaction are still in the process
of being determined and finalized. It is expected that the Target’s
business on completion of the Proposed Transaction would comprise
of the distribution of premium wine and spirits, with offices in
Singapore, Hong Kong, Shanghai, Beijing and Tokyo. The Buyers are a
consortium of shareholders of the Company, comprising of
controlling shareholder El Greco International Investments S.r.l.
(28.9% shareholding in SAIS) and insider shareholders Claude
Dauphin Estate (14.4% shareholding in SAIS) and Mark Joseph Irwin
(14.7% shareholding in SAIS).
Following completion of the Proposed
Transaction, it is expected that the Company would continue to
operate from Singapore and would focus its resources on “KADDRA”,
its Customer Experience Management (“CEM”)
platform, and digital media and services. KADDRA’s technology helps
businesses combine their full suite of products and services into a
single ecosystem seamlessly integrated with their own branded
consumer interface.
Under the terms of the LOI, the intended
consideration for the Proposed Transaction consists of payment of
US$1 by the Buyers to the Company and assumption by the Buyers of
the Company’s obligation to pay all outstanding shareholders loans
of the Company, and accrued interest thereon, of approximately
US$20.45 million as at the date of the LOI. Detailed information in
respect of these loans is set out in the Company’s final prospectus
dated July 26, 2018 (under the heading “Liquidity and Capital
Resources – Shareholder Loans”) and the Company’s most recent
financial statements for the quarter ended March 31, 2019 (under
the heading “Loans and Borrowings – Loans from Shareholders”),
copies of which are available under the Company’s profile on SEDAR
at www.sedar.com.
The principal terms and conditions of the LOI
include, among others, an exclusivity period of 60 days, that no
liability or binding obligation is intended to be created between
the parties pursuant to the LOI and that the Proposed Transaction
is conditional on, among others, the Buyers having conducted and
are satisfied with the results of the financial, legal, and
regulatory due diligence of the Company and the parties signing a
legally binding share purchase agreement.
The board of directors of the Company (the
“Board”) has established a special committee of
the Board comprised of Ken Robertson, being the independent
director of the Board (the “Special Committee”),
to consider the Proposed Transaction on behalf of the Company. On
behalf of the Special Committee, the Company has retained MNP LLP
(“MNP”), an independent accounting and financial
advisory firm in Canada, to prepare a preliminary fairness opinion
with respect to the fairness of the Proposed Transaction on the
terms set forth in the LOI (the “Preliminary Fairness
Opinion”). The Special Committee will obtain a final
formal valuation and fairness opinion with respect to the finalized
terms of the Proposed Transaction once determined (the
“Valuation and Fairness Opinion”).
MNP has provided the Preliminary Fairness
Opinion dated June 14, 2019, with an effective date as of April 30,
2019 (the “Opinion Date”), to the Special
Committee, which concluded to the Special Committee that, based
upon and subject to MNP’s scope of review and the analysis,
qualifications and assumptions contained in the Preliminary
Fairness Opinion, as at the Opinion Date, the Proposed Transaction
on terms set forth in the LOI is fair, from a financial point of
view, to the shareholders of the Company. The conclusion contained
in the Preliminary Fairness Opinion should not be construed as a
recommendation for shareholders of the Company to vote in favour
of, or against, the Proposed Transaction. MNP reserves the right,
but will be under no obligation, to review all calculations
contained in the Preliminary Fairness Opinion and, if MNP considers
it necessary, to revise its conclusion in light of any information
existing at the Opinion Date which becomes known to MNP after the
date of the Preliminary Fairness Opinion.
The Proposed Transaction would be a "related
party transaction" within the meaning of Multilateral Instrument
61-101 Protection of Minority Shareholders in Special Transactions
("MI 61-101") as the Buyers comprise of certain controlling
shareholders and insiders of the Company. Accordingly, the Proposed
Transaction would be subject to the applicable requirements set
forth in MI 61-101, including the requirement for the Company to
obtain minority shareholder approval.
As part of the Proposed Transaction, it is
expected that completion of certain ancillary restructuring
transactions, whereby Mark Joseph Irwin would acquire a significant
portion of El Greco International Investments S.r.l.’s and Claude
Dauphin Estate’s shareholding in SAIS, would result in the creation
of Mark Joseph Irwin as a new “control person” of the Company and
it will be necessary for the Company to also obtain disinterested
shareholder approval for the creation of a new control person in
accordance with the rules and policies of the TSX Venture
Exchange.
The LOI is non-binding and there is no assurance
that the Proposed Transaction will be completed as proposed or at
all, and completion of the Transaction remains subject to Board
approval. In the event a definitive agreement with respect to the
Proposed Transaction (the “Definitive Agreement”)
is executed, the closing of the Proposed Transaction will be
subject to a number of conditions, including, but not limited to,
receipt of a favourable Valuation and Fairness Opinion and a
positive recommendation by the Special Committee, along with
customary regulatory, third party and shareholder approvals,
including the final approval of the TSX Venture Exchange. Full
details of the Proposed Transaction will be included in the
Definitive Agreement and in the management information circular
expected to be filed with the regulatory authorities and mailed to
the securityholders of the Company in accordance with applicable
securities laws. A copy of the Valuation and Fairness Opinion, and
a description of the various factors considered by the Special
Committee in respect of the Definitive Agreement, will be included
in the management information circular. All securityholders of the
Company are urged to read the Definitive Agreement and the
management information circular once they become available as they
will contain additional important information about the terms of
the Proposed Transaction and the Definitive Agreement.
About SAIS GroupSingapore-based
SAIS Group is a leader in Customer Experience Management
technology, business intelligence and services solutions. Across
its business units, the group connects businesses with their
customers through end-to-end intelligent solutions. Together with a
roundup of world-leading industry and tech experts SAIS offering is
crafted to create ground-breaking digital business-customer
relationships. Since its establishment in 2012, SAIS Group has
expanded throughout Asia and is now looking towards global
expansion.To learn more about SAIS, visit our website:
www.sais-group.com
Cautionary Statement Certain
statements contained in this press release contain “forward-looking
information” (“forward-looking statements”) within the meaning of
Canadian securities laws. All statements, other than statements of
historical fact, included herein, including, without limitation,
statements regarding, the completion of any potential strategic
transaction such as the sale of its luxury distribution business,
and the terms and result of any such transaction, are
forward-looking statements. Forward-looking statements are
typically identified by words such as: believes, expects,
anticipates, intends, estimate, postulate and similar expressions
or are those which, by their nature, refer to future events.
Forward-looking statements include, but are not limited to,
statements relating to the proposed business of the Company
following completion of the Proposed Transaction, the proposed
business of the Target following completion of the Proposed
Transaction, the definitive terms and the outcome of the Proposed
Transaction, the expected entry into a Definitive Agreement, the
expected completion of the Proposed Transaction on the terms of the
Definitive Agreement and the expected approval of, among others,
the shareholders of the Company and the TSX Venture Exchange. These
forward-looking statements represent SAIS Group’s expectations or
beliefs concerning future events, and it is possible that the
results described in this press release will not be achieved. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of SAIS Group’s control,
which could cause actual results to differ materially from the
results discussed in the forward-looking statements When
considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in the
Company’s final prospectus, dated July 26, 2018, filed with the
applicable Canadian securities regulatory authorities. Although the
Company believes that such statements are reasonable, there can be
no assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. The Company cautions investors that
any forward-looking statements by the Company are not guarantees of
future performance, and that actual results may differ materially
from those in forward-looking statements. For this reason, readers
should not place undue reliance on forward looking statements. Any
forward-looking statement speaks only as of the date on which it is
made, and, except as required by law, SAIS Group does not undertake
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
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.
Contact Deborah
Krish
SAIS Corporate Officedeborah.krish@sais-group.com
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