approximately $7.8 million under its revolving credit facility on closing to refinance certain indebtedness of the two companies and for related transaction expenses.
DATA has secured lock-up agreements with the vendors of each company, pursuant to which the vendors have agreed not to sell the DATA common shares issued pursuant to the sale transactions for a period of twelve months from the closing of the relevant transaction. In aggregate, a total of 1,278,708 common shares of DATA will be issued to the vendors of Thistle and Eclipse, and, as a result, after having completed both transactions, the number of DATA’s issued and outstanding common shares will increase from 11,975,053 to 13,253,761 common shares outstanding. The issuance of common shares of DATA in connection with the Eclipse and Thistle acquisitions is subject to the approval of the Toronto Stock Exchange.
The acquisitions of Eclipse and Thistle are expected to close on February 22, 2017 and are subject to customary closing conditions.
“We believe that these transactions will position DATA to grow revenue within our Retail and Financial Services client bases. Both businesses will provide enhanced product offerings to our sales team, enabling us to target opportunities with our clients where we’ve been somewhat limited to date,” said Mr. Sifton.
“Collectively, DATA will become the leading national supplier of commercial print and large format production, with facilities in Eastern and Western Canada. Accompanied by DATA's established national warehousing, distribution and fulfilment capabilities, DATA is uniquely positioned to simultaneously execute national marketing campaigns for our customers in a timely and cost effective manner,” added Mr. Sifton.
Independent Committee and Board Approvals
The acquisition of Eclipse has been unanimously approved by the board of directors (the “Board”) of DATA.
Companies controlled by Gregory J. Cochrane and J. R. Kingsley Ward, the President of DATA and the Chair of the Board, respectively, control Capri Media Group Inc. (“Capri”). Capri is the sole shareholder of Thistle. The Board established a special committee (the “Independent Committee”) comprised of three independent members of the Board, William Albino, James J. Murray and Derek J. Watchorn, to supervise the negotiation of the terms of the Thistle acquisition and make a recommendation to the Board as to approval of the transaction.
The Independent Committee retained Cormark Securities Inc. (“Cormark”) to provide it with an opinion as to the fairness, from a financial point of view, to the holders of DATA’s common shares of the consideration to be paid to Capri pursuant to the Thistle acquisition. Cormark has advised the Independent Committee that Cormark is independent of DATA, Thistle and Capri and their respective associates and affiliates. Cormark’s fee for providing its fairness opinion is not contingent on the completion of the Thistle acquisition.
Cormark has delivered to the Independent Committee a written opinion to the effect that, as of January 31, 2017 and based upon and subject to the various assumptions made, procedures followed, matters considered and limitations on the review undertaken as set forth therein, the consideration to be paid