People Corporation to be Acquired by Goldman Sachs Merchant Banking
Transaction facilitates People Corporation’s next chapter of growth and expands its opportunity to further enhance the delivery of market-leading solutions to its clients
All-cash consideration delivers significant and immediate value to People Corporation shareholders: purchase price represents a 37% premium to the 20-day volume-weighted average price per share for the period ending on December 11, 2020, and a 36% premium to the closing price on December 11, 2020Unanimously approved by People Corporation’s Board of DirectorsWINNIPEG, Manitoba, Dec. 14, 2020 (GLOBE NEWSWIRE) — People Corporation (the “Company”) (TSX Venture: PEO) today announced that it has entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which investment funds managed by the Goldman Sachs Merchant Banking Division (the “Purchaser” or “Goldman Sachs”) will acquire all of the issued and outstanding common shares (the “shares”) of the Company for $15.22 per share in cash (the “Purchase Price”), representing a total equity value of approximately $1.13 billion (the “Transaction”). The Purchase Price represents a 37% premium to the 20-day volume-weighted average price per share for the period ending on December 11, 2020, and a 36% premium to the closing price on December 11, 2020.Laurie Goldberg, Executive Chairman and Chief Executive Officer of People Corporation, said, “This Transaction delivers tremendous value for our shareholders while creating the conditions that will enable our team to write People Corporation’s next chapter. As a private company with a committed, well-capitalized and long-term owner, People Corporation will accelerate its scale in talent and technology, consistent with its commitment to bring to bear industry-leading group benefits, group retirement and HR solutions to each client engagement, delivered by its best-in-class consultants across its national platform. I look forward to continuing to lead our outstanding team as we look to the future.”Scott Anderson, Chairman of the Special Committee of independent directors of People Corporation, said, “This transaction is an excellent opportunity for People Corporation’s shareholders, and for the Company’s clients, partners, employees and other stakeholders. The Transaction recognizes the value of People Corporation’s growth, success, and long-term track record of delivering shareholder returns. The Purchase Price represents a significant premium to both current and historical trading prices for People Corporation’s shares. We are confident that the partnership with Goldman Sachs will enhance the Company’s ability to pursue its long-term vision and ensure that People Corporation continues to be a leader in the industry.”Anthony Arnold, Managing Director at Goldman Sachs, said, “We are thrilled to be a part of the next phase of the People Corporation story. The Company has a compelling client offering with experienced consultants and a national scale that have helped deliver outstanding organic growth over time. There is also a continued and meaningful investment opportunity to deploy capital and access opportunities in People Corporation’s core and adjacent markets. We look forward to working with Laurie and the rest of the management team to build upon what has made People Corporation so successful.”
People Corporation and Goldman Sachs are fully aligned on and committed to People Corporation’s strategy of growth both organically and through acquisition. People Corporation will continue to be led by Mr. Goldberg and the current senior leadership team, from its corporate office in Winnipeg, Manitoba and over 40 offices throughout the country. No changes are expected to People Corporation’s personnel, service model and standards, or operating principles.The Transaction is the result of a review of strategic alternatives for the Company, considering the interests of all stakeholders, including shareholders, clients, partners and employees, undertaken by a special committee of independent directors of People Corporation (the “Special Committee”). The review resulted in a comprehensive process focused on maximizing value for People Corporation’s shareholders and involved discussions with a broad range of potential strategic buyers and financial sponsors. The Transaction is the outcome of that process, and is unanimously supported by People Corporation’s Board of Directors (the “Board”).Transaction HighlightsEntry into the Arrangement Agreement was based on the unanimous recommendations of both the Board and the Special Committee and followed an extensive review and analysis of what is in the best interests of People Corporation including its shareholders. The conclusions and recommendations of the Special Committee and the Board have been based on a number of factors, including (without limitation) the following:Compelling Value to People Corporation Shareholders – the all-cash consideration payable to shareholders represents significant value to shareholders:
º 36% premium to People Corporation’s trading price per share on the TSXV on December 11, 2020 and a 37% premium to the 20-day volume-weighted average price per share on the TSXV for the period ending on December 11, 2020.
º 28% premium to the all-time closing trading high for People Corporation shares.Certainty of Value and Liquidity – the payment to shareholders under the terms of the Arrangement Agreement will be all cash, which provides certainty and immediate liquidity to shareholders.Fairness Opinions – Each of William Blair and CIBC Capital Markets has provided the Special Committee and the Board with an opinion to the effect that, as of December 13, 2020, the consideration to be received by holders of People Corporation shares in the Transaction is fair, from a financial point of view, to such holders (other than the Rollover Shareholders, as defined below), in each case subject to the respective limitations, qualifications, assumptions, and other matters set forth in such opinions.Transaction and Shareholder Meeting DetailsThe Transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Ontario). The completion of the Transaction will be subject to shareholder approval at a special meeting of the Company’s shareholders (the “Special Meeting”). Directors and the senior management team have entered into customary agreements to vote their Shares in favour of the Transaction, subject to certain exceptions. Mr. Goldberg together with the rest of the senior management team (collectively, the “Rollover Shareholders”), have agreed to roll a portion of their equity for shares of an entity controlled by the Purchaser.The Transaction will constitute a “business combination” for the purposes of MI 61-101. The Transaction will therefore require the approval of the holders of a majority of the votes cast at the Special Meeting excluding those shares held by the Rollover Shareholders, in addition to approval by 66 2/3% of all votes cast at the Special Meeting. The Transaction is also subject to the approval of the Ontario Superior Court of Justice, in addition to certain regulatory approvals and closing conditions customary to a transaction of this nature. The Transaction will be financed through a combination of committed debt and equity financing, subject to the terms of those commitments. The Transaction is expected to close in the first calendar quarter of 2021.The Arrangement Agreement includes customary provisions relating to non-solicitation, subject to customary “fiduciary out” provisions that entitle People Corporation to consider and accept a superior proposal if not matched by the Purchaser.People Corporation expects to hold the Special Meeting of shareholders to consider the Transaction in February 2021 and to mail the management information circular for the Special Meeting in January 2021. Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by the Company under its profile at www.sedar.com. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the rationale for the recommendations made by the Special Committee and the Board and how shareholders can participate in and vote at the Special Meeting will be provided in the management information circular for the Special Meeting which will also be filed at www.sedar.com. Shareholders are urged to read these and other relevant materials when they become available.AdvisorsWilliam Blair and CIBC Capital Markets are acting as financial advisors to the Company. Stikeman Elliott LLP is acting as legal advisor to the Company, and Davies Ward Phillips & Vineberg LLP is acting as independent legal advisor to the Special Committee.Goldman Sachs Canada and BMO Capital Markets are acting as joint financial advisors, and Osler, Hoskin & Harcourt LLP and Sullivan & Cromwell LLP are acting as legal advisors, to Goldman Sachs Merchant Banking.About People CorporationPeople Corporation is a leading provider of group benefits, group retirement and human resource services with approximately 1,100 talented professionals serving organizations across Canada. Bringing deep industry and subject matter expertise, proprietary technology platforms and an innovative suite of services to each client engagement, we deliver uniquely valuable insights and solutions to make a positive difference to your people and your bottom line. Further information is available at www.peoplecorporation.com.About Goldman Sachs Merchant Banking DivisionFounded in 1869, The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm. Goldman Sachs Merchant Banking Division (MBD) is the primary center for the firm’s long-term principal investing activity. MBD is one of the leading private capital investors in the world with investments across private equity, infrastructure, private debt, growth equity and real estate.Forward-Looking InformationCertain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. More particularly and without limitation, this press release contains forward-looking statements and information regarding the anticipated benefits of the proposed Transaction for People Corporation, its employees, business partners, shareholders and other stakeholders, including future financial and operating results, plans, objectives, expectations and intentions of the Purchaser or People Corporation, and the anticipated timing of the Special Meeting and of the completion of the Transaction. Except as may be required by Canadian securities laws, People Corporation does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from People Corporation’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, People Corporation cannot guarantee that any forward-looking statements will materialize, or if any of them do, what benefits People Corporation will derive from them.In respect of forward-looking statements and information concerning the anticipated benefits and timing of the completion of the proposed Transaction, People Corporation has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions for the completion of the Transaction, and other expectations and assumptions concerning the proposed Transaction. The anticipated dates indicated may change for a number of reasons, including the necessary regulatory, court and shareholder approvals, the necessity to extend the time limits for satisfying the other conditions for the completion of the proposed Transaction or the ability of the Board to consider and approve, subject to compliance by People Corporation of its obligations under the Arrangement Agreement, a superior proposal for People Corporation. Although People Corporation believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, that the proposed Transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.Risks and uncertainties inherent in the nature of the proposed Transaction include, without limitation, the failure of the parties to obtain the necessary shareholder, regulatory and court approvals or to otherwise satisfy the conditions for the completion of the Transaction; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; the Purchaser’s ability to complete the anticipated debt and equity financing as contemplated by applicable commitment letters or to otherwise secure favourable terms for alternative financing; significant transaction costs or unknown liabilities; the ability of the Board to consider and approve, subject to compliance by People Corporation with its obligations under the Arrangement Agreement, a superior proposal for People Corporation; the failure to realize the expected benefits of the Transaction; and general economic conditions. Failure to obtain the necessary shareholder, regulatory and court approvals, or the failure of the parties to otherwise satisfy the conditions for the completion of the Transaction or to complete the Transaction, may result in the Transaction not being completed on the proposed terms or at all. In addition, if the Transaction is not completed, and People Corporation continues as an independent entity, there are risks that the announcement of the Transaction and the dedication of substantial resources by People Corporation to the completion of the Transaction could have an impact on its business and strategic relationships, including with future and prospective employees, customers, suppliers and partners, operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Consequently, People Corporation cautions readers not to place undue reliance on the forward-looking statements and information contained in this press release. People Corporation does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.Contacts:Jonathan Ross, CFA
Investor Relations – People Corporation
email@example.comDennis Stewner, CPA, CA
CFO and COO – People Corporation
Goldman Sachs Media Contact:
firstname.lastname@example.orgNeither 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 press release.