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Takeover bid by Transcontinental to acquire printer PLM Group for C$3.50 per share

Wednesday, August 22, 2007

Press release from the issuing company

August 21, 2007 – Transcontinental Inc. and PLM Group Ltd. today announced that Transcontinental has agreed to make a takeover bid to the shareholders of PLM, Canada’s fourth-largest printer. PLM has 470 employees in four facilities in the Greater Toronto Area. In 2006, it reported revenues of $126 million.
Transcontinental is making an all-cash offer to acquire all of PLM’s approximately 29.5 million shares outstanding, on a fully diluted basis, at C$3.50 per share, for a total enterprise value of $130 million including debt. Transcontinental and PLM have signed a Support Agreement pursuant to which the PLM Board of Directors has unanimously agreed to recommend that shareholders accept the offer of Transcontinental. Barry N. Pike, founder and Chairman of the Board and Chief Executive Officer of PLM, and Pike Holdings Inc., a holding company controlled by Mr. Pike, which combined hold approximately 51.2% of the shares outstanding, have signed a hard Lock-Up Agreement pursuant to which they have agreed to tender the shares they hold and accept the offer of Transcontinental.

The PLM Board of Directors has received an opinion from the financial advisor to the PLM Board of Directors and Special Committee that Transcontinental’s offer is fair to PLM shareholders from a financial point of view. The PLM Board of Directors, after consultation with its financial and outside advisors, has determined that the price per-share is fair and in the best interests of the Corporation and its shareholders, and is recommending that PLM shareholders accept the offer of Transcontinental. Transcontinental’s offer represents a premium of 19% over the closing price of PLM shares on the TSX on August 13, 2007, the day before PLM announced that it was in exclusive talks with a potential buyer, and 25% over the closing price of PLM shares on the TSX yesterday, August 20, 2007.
Transcontinental’s offer is subject to certain usual conditions, including the deposit of 66 2/3% of shares outstanding and obtaining regulatory approvals. The Support Agreement calls for the payment of a break fee in certain situations, namely if the PLM Board of Directors changes its recommendation in favour of a competing offer. The transaction is expected to close in October 2007.
In the next few weeks Transcontinental will be sending PLM shareholders a takeover bid circular. During that same period, the PLM Board of Directors will be sending its shareholders a circular that recommends, among other things, acceptance of the offer of Transcontinental.
Founded in 1987, PLM is a fast-growing company that has skillfully anticipated the new marketing needs of major financial institutions, retailers and publishers. Its primary niche is direct marketing products and services, which are increasingly in demand by businesses. PLM also offers leading edge services such as premedia and digital printing and prints a wide range of marketing-related commercial printing products. PLM boasts state-of-the-art equipment and a diversified customer base that includes many leading companies. PLM shares have been listed on the TSX under the ticker symbol TSX: PGL since 1997.
“PLM is regarded highly by businesses, marketing firms and advertising agencies in Canada,” said Luc Desjardins, President and CEO of Transcontinental. “With PLM, we will become a leader in Canada’s direct marketing industry, a fast-growing segment where Transcontinental is already a major player in the United States; PLM will also complement our product and service offering in the Greater Toronto Area. PLM brings Transcontinental a dynamic sales force, which will augment cross-selling opportunities. We’re looking forward to welcoming our future partners and colleagues to the Transcontinental family and continuing to grow together.”
Barry N. Pike said: “This transaction provides outstanding value for the shareholders of PLM and reflects the true value of the company we have built together over the past 19 years. PLM has built a reputation for providing leading edge technology for its customers and backing it up with the best customer support in the industry. As an integral part of the direct mail segment of Transcontinental, PLM will continue to provide these same services and will have the resources required to expand in the future to meet the future growing needs of its customers in this dynamic and expanding segment of the print market.”

 

 

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