/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
June 6, 2018 – VANCOUVER, BC - Pinnacle Renewable Holdings Inc. ("Pinnacle") announced today that ONCAP II L.P., ONCAP US (II) L.P., ONCAP (US) II-A L.P., ONEX Parallel Investment (ONCAP) L.P. and Biomass EI Ltd. (collectively the “ONCAP Entities”), Rob Swaan Holdings Inc. and Jim Swaan Holdings Inc. (collectively the “Selling Shareholders”) have entered into an agreement with Pinnacle and a syndicate of underwriters led by CIBC Capital Markets, RBC Capital Markets, Scotiabank and BMO Capital Markets (collectively the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis an aggregate of 3,640,000 common shares of Pinnacle held by the Selling Shareholders at an offering price of $13.75 per share (the “Offering Price”) for total gross proceeds to the Selling Shareholders of approximately $50 million (the “Offering”). Pinnacle will not receive any proceeds from the Offering.
The Underwriters have also been granted an over-allotment option (the “Over-Allotment Option”) by the Selling Shareholders to purchase up to an additional 546,000 common shares from the Selling Shareholders at the Offering Price for additional gross proceeds of approximately $7,507,500 if the Over-Allotment Option is exercised in full. The Over-Allotment Option can be exercised at any time, in whole or in part, for a period of 30 days from the closing date of the Offering.
A preliminary short form prospectus relating to the Offering will be filed by no later than June 12, 2018 with Canadian securities regulatory authorities in each of the provinces and territories of Canada.
Upon completion of the Offering and assuming no exercise of the Over-Allotment Option, the ONCAP Entities will, directly or indirectly, own or control approximately 10,903,809 common shares, representing approximately 33.1% of the issued and outstanding common shares. Rob Swaan Holdings Inc. and Jim Swaan Holdings Inc. will own or control 732,288 and 732,288 Common shares, respectively, representing approximately 2.2% and 2.2% of the issued and outstanding Common shares.
The closing of the Offering is expected to occur on or about June 26, 2018, subject to customary closing conditions.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws. Accordingly, the common shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Pinnacle in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Pinnacle is a rapidly growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. Pinnacle produces renewable fuel for electricity generation in the form of industrial wood pellets, which are used by global utilities and large-scale power generators to produce renewable and reliable baseload power. Pinnacle is a trusted supplier to its customers, who require reliable, high quality fuel supply to maximize utilization of their facilities. Pinnacle takes pride in its industry leading safety practices. Pinnacle operates seven industrial wood pellet production facilities, a port terminal in Prince Rupert, B.C., and currently has a new production facility under construction in Smithers, B.C. Pinnacle has entered into long-term take-or-pay contracts with utilities in the U.K., Europe and Asia that represent 104% of its production capacity through 2021 and nearly 87% of its production capacity through 2026.
This news release may contain “forward-looking information” within the meaning of applicable securities legislation. Words such as "expect," "anticipate," "intend," "may," "plan," "will," "can," "believe," "estimate" and variations of such words and similar expressions are intended to identify such forward-looking information. This information reflects Pinnacle’s current expectations regarding future events. Some of the specific forward-looking information contained herein include, but are not limited to, statements with respect to the intention for the parties to complete the Offering on the terms and conditions described herein, the date on which the closing of the Offering is expected to occur and the exercise by the Underwriters of the Over-Allotment Option.
Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, including but not limited to factors described in greater detail under the “Risk Factors” section in Pinnacle’s Annual Information Form filed on March 27, 2018 on SEDAR and its Management’s Discussion & Analysis for the fiscal year ended December 29, 2017 filed on SEDAR, many of which are beyond Pinnacle’s control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. This information is based on Pinnacle’s reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this news release. Pinnacle does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law or regulatory authority. When relying on forward-looking information to make decisions, Pinnacle cautions readers not to place undue reliance on forward-looking information, as forward-looking information involves significant risks and uncertainties and should not be read as guarantees of future performance or results.
For further information: Investor Relations, Pinnacle Renewable Energy, Tel: 1-877-737-4344, Email: email@example.com, Web: www.pinnaclepellet.com