Perlite Canada inc. Announces Agreement With Management to Take the Corporation Private for a Cash Consideration of $0.80 Per Share

CBJ Newsmakers

Not for distribution to United States newswire services or for dissemination in the United States.

MONTREAL, Nov. 29, 2018 (GLOBE NEWSWIRE) — Perlite Canada inc. (“Perlite” or the “Corporation”) (TSX-V:PCI) is pleased to announce that it has entered into an acquisition agreement (the “Acquisition Agreement”) pursuant to which Richard Barabé, President and Chief Executive Officer, and Martin Joyal, Secretary (collectively, the “Principals”), will acquire, through a newly formed corporation (the “Purchaser”), all of the issued and outstanding common shares of the Corporation, other than shares held directly or indirectly by the Principals, at a price of $0.80 in cash per share and Perlite will be taken private for a total consideration of approximately $6.392 million (the “Transaction”). The Principals directly or indirectly hold approximately 26.11% of the issued and outstanding common shares of the Corporation. The Transaction values Perlite’s equity at approximately $8.650 million.

The $0.80 per-share cash consideration represents a premium of approximately 33% to the closing price of the common shares of the Corporation on the TSX Venture Exchange (the “TSX-V”) on November 28, 2018, the last day of trading prior to the date hereof, a premium of approximately 36% to the volume-weighted average trading price of the shares in the last 20 days of trading on the TSX-V and a premium of approximately 31% to the volume-weighted average trading price of the shares in the last 12 months of trading on the TSX-V.

“We are very pleased to be able to allow our shareholders who have supported us for years to monetize their investment and benefit from the substantial growth in value of the Corporation during the last years while receiving a significant premium for their shares” Richard Barabé said.

“We are pleased to present this transaction to the minority shareholders of Perlite, which will provide them with an opportunity to monetize their investment for a significant cash premium and immediate liquidity upon closing” remarked Fayçal Salek, Chairman of the Special Committee of the Corporation.

The Transaction allows for the continued commitment of the Principals to the success of Perlite for the long term and Richard Barabé will continue as President and CEO and Martin Joyal will continue as Corporate Secretary of Perlite.

The Transaction is to be structured as an amalgamation of the Corporation with the Purchaser, under the laws of the Province of Quebec. Upon the completion of the amalgamation, shareholders of Perlite, other than the Principals, will receive one redeemable share of the corporation resulting from the amalgamation for each common share of Perlite they hold. Each redeemable share will then be immediately redeemed for $0.80 in cash.

Pursuant to the terms of the Acquisition Agreement, the holders of options of the Corporation who are directors of the Corporation shall remit and surrender all of their options for cancellation, as of the effective time of the Amalgamation, without any cash or other consideration. The options owned by the other holder shall be terminated and cancelled, as of the effective time of the Amalgamation, in exchange for a cash payment by the Corporation equal to the difference between $0.80 per vested option and the exercise price of such options (less any applicable withholding) in accordance with the terms of the Corporation’s stock option plan.

In accordance with applicable securities laws, the Board of Directors of the Corporation established the Special Committee comprised of all of its independent directors in order to, among other things, review and consider the proposed form, structure, terms, conditions and timing of the Transaction, as well as any alternative transaction proposed to the Corporation, make such recommendations to the Board as it considers appropriate or desirable in relation to any such transaction, and provide advice, guidance to the Board as to whether one or more transaction(s) is or are in the best interests of the Corporation. The members of the Special Committee, Fayçal Salek and Patrick Barriault, retained Norton Rose Fulbright Canada LLP as its independent legal advisors and Richter Advisory Group Inc. (“Richter”) was retained to advise the Special Committee and to prepare a fairness opinion in respect of the Transaction, notwithstanding the statutory exemption from the formal valuation requirement set out in Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions.

Richter has provided the Special Committee with its opinion (the “Fairness Opinion”) that, as of the date hereof, subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by shareholders of Perlite other than the Principals (the “Minority Shareholders”) pursuant to the Transaction is fair, from a financial point of view, to the Minority Shareholders.

Based on Richter’s conclusions, among other matters considered, and after consultation with its financial and legal advisors, the Special Committee unanimously determined that the Transaction is fair to the Minority Shareholders and is in the best interests of Perlite. The Special Committee has unanimously recommended that the Board of Directors of the Corporation approve the Transaction and that the Corporation enter into the Acquisition Agreement, and, following this recommendation, the Board of Directors of the Corporation unanimously approved the Transaction (with interested directors, Richard Barabé and Martin Joyal having abstained) and recommends that the Minority Shareholders vote their common shares of the Corporation in favour of the Transaction.

Shareholders of the Corporation will be asked to approve the Transaction at a special meeting (the “Meeting”) which the Corporation currently expects will be held in January 2019. Completion of the Transaction is subject to customary closing conditions, including, but not limited to, the approval of at least two-thirds of the shareholders of the Corporation voting at the Meeting and of a simple majority of the Minority Shareholders voting at the Meeting, and there being no material adverse change with respect to Perlite. The Acquisition Agreement governing the Transaction contains customary representations, warranties and covenants for a transaction of this nature. Assuming the satisfaction of all conditions, the Transaction is expected to close in the week following the Meeting.

Further details of the Transaction, including a copy of the Fairness Opinion, and the detailed reasons for the favourable recommendation to shareholders of the Corporation by the Board of Directors of the Corporation and the Special Committee, will be contained in the management information circular (the “Circular”) to be mailed to shareholders of the Corporation in December 2018 in connection with the Meeting.

The Transaction is not subject to a financing condition, and the Principals have confirmed that financing has been arranged to fund the Transaction through committed debt facilities. The Principals have also confirmed their intent to consummate the Transaction to the exclusion of any other alternative transaction.

A copy of the Acquisition Agreement, the Circular (including the Fairness Opinion) and certain related documents will be filed in due course on SEDAR at

Fasken Martineau DuMoulin LLP is acting as legal advisor to the Principals.

Shareholders should consult their own tax and investment advisors with respect to the Transaction, details of which will be contained in the Circular.

About Perlite Canada inc.

Perlite Canada inc. specializes in the processing, distribution and sale of perlite and vermiculite. Perlite and vermiculite are used in the construction, industrial and horticultural sectors. The Corporation produces expanded perlite and exfoliated vermiculite in its two Canadian plants, one is located in Lachine (Quebec) and the second is located in Saint-Pacôme (Quebec). Perlite’s common Shares trade on the TSX Venture Exchange under the symbol “PCI”.

Forward-Looking Statements

This press release contains forward-looking statements to which are associated risks and uncertainties. Any statement contained in this present press release that does not constitute an historical fact can be considered as a forward-looking statement within the meaning of the Canadian securities legislation and regulations. In this press release, verbs such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “outlook”, “target”, “goal”, “guidance”, “anticipate”, “plan”, “foresee”, “believe”, “potential”, “project”, or “continue” and other similar expressions indicate generally forward-looking statements. Those statements do not warrant as for the future performance of Perlite Canada inc. and they suppose known and unknown risks as well as uncertainties in such a way that true future perspectives or results of the Corporation may be notably different of future results expressed or implied by these forward-looking statements. Forward-looking information includes, but is not limited to, statements relating to the anticipated benefits of the proposed Transaction for Perlite and its stakeholders, shareholder approval and the anticipated timing of the Meeting and of the completion of the proposed Transaction.

ln respect of the forward-looking statements and information concerning the anticipated benefits of the proposed Transaction, the anticipated timing for the Meeting and the anticipated timing for the completion of the Transaction, Perlite has provided such 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 stock exchange and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and other expectations and assumptions concerning the Transaction. The anticipated timing to hold the Meeting may change for a number of reasons. Although Perlite 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. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

The risks and uncertainties include, but are not limited to, the satisfaction of the conditions to consummate the Transaction, including the approval of the Transaction by the shareholders, the occurrence of any event, change or other circumstances that could give rise to termination of the Transaction, a delay in the consummation of the Transaction or failure to complete the Transaction for any other reason, the amount of the costs, fees, expenses and charges or the liabilities related to the Transaction, the failure to realize the expected benefits of the Transaction, and the risks associated with general economic conditions. Failure of the parties to satisfy the conditions to 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. ln addition, if the Transaction is not completed, and Perlite continues as a publicly-traded entity, there are risks that the announcement of the proposed Transaction and the dedication of substantial resources of Perlite to the completion of the Transaction could have an impact on its business and strategic relationships, operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Furthermore, the failure of Perlite to comply with the terms of the Acquisition Agreement may, in certain circumstances, result in it being required to pay an expense reimbursement fee to the Purchaser, the result of which could have an adverse effect on its financial position and results of operations and its ability to fund growth prospects and current operations.

Consequently, all of the forward-looking statements contained herein are qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation.

Unless otherwise noted or the context otherwise indicates, the forward-looking statements in this press release are made as of the date of this press release and, except as required by law, Perlite disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


Perlite Canada inc.

Richard Barabé or Martin Joyal: (514) 631-4251, (514) 631-4254 (Fax)