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VANCOUVER, March 3, 2017 /CNW/ - A&W Food Services of Canada Inc. ("Food Services") announced today that it has completed its previously announced secondary offering of 373,300 units (the "Units") of A&W Revenue Royalties Income Fund (the "Fund") (TSX: AW.UN) in a private placement on a bought deal basis at a price of $39.25 per Unit (the "Offering"), for gross proceeds of $14,652,025. The Units are subject to a four month statutory hold period under applicable securities laws.
Laurentian Bank Securities Inc. ("LBS") acted as sole underwriter for the Offering pursuant to the terms of an underwriting agreement between LBS and Food Services dated March 1, 2017 pursuant to which the Units were sold.
The sale of the Units was made at the request of certain indirect shareholders of the parent company of Food Services who will receive the net proceeds from the sale of the Units, as well as a dividend of approximately $14.5 million paid by Food Services and other funds payable in the future from funds expected to be derived from Food Services, in the repurchase of shares of the parent company of Food Services from these shareholders. The Fund will not receive any proceeds of the sale of the Units.
The 373,300 Units sold in the Offering represent approximately 2.4% of the outstanding units of the Fund on a fully-diluted basis. In connection with the disposition of the Units, Food Services exercised its right to exchange securities of certain subsidiaries of the Fund that were exchangeable for the 373,300 Units sold.
Prior to the sale of these 373,300 Units, Food Services owned securities that were indirectly exchangeable for 3,733,000 Units of the Fund, representing approximately a 23.5% indirect interest in the Fund on a fully-diluted basis. Following the exchange of securities for 373,300 Units of the Fund and the sale of these Units, Food Services now owns securities indirectly exchangeable for 3,359,700 units of the Fund, or approximately a 21.1% indirect interest in the Fund, on a fully-diluted basis. Accordingly, Food Services' indirect ownership interest in the Fund has decreased by approximately 2.4% on a fully-diluted basis as a result of the completion of the Offering.
Food Services may acquire additional securities of the Fund in the future and may continue to acquire, on a yearly basis, further securities of certain subsidiaries of the Fund which are indirectly exchangeable for units of the Fund as part of annual adjustments made to the royalty pool.
Food Services will file an early warning report with respect to its sale of the 373,300 Units (the "Early Warning Report"), a copy of which will be available under the Fund's profile on SEDAR at www.sedar.com.
Forward Looking Information
This news release may contain certain forward-looking statements related to: Food Services' intended use of the proceeds for the Offering; the payment of a dividend by Food Services to its shareholders and future payments by Food Services in connection with the repurchase of shares of the parent company of Food Services from certain of the parent company's shareholders; the potential future acquisition by Food Services of securities of certain subsidiaries of the Fund which are indirectly exchangeable for units of the Fund as part of annual adjustments made to the royalty pool; and the future filing of an early warning report by Food Services with respect to its sale of the 373,300 Units. Investors are cautioned that all forward-looking statements are based on certain assumptions of Food Services and the Fund and involve risks and uncertainties, including, without limitation, changes in market, competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund's or Food Service's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.
This news release shall not constitute an offer to sell or a solicitation of any offer to buy nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Units being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such Securities may not be offered or sold within the United States absent registration under the U.S. Securities Act or an applicable exemption from the registration requirements thereunder.
SOURCE A&W Food Services of Canada Inc.