VANCOUVER, Nov. 30, 2016 /CNW/ - (TSXV: PTF)
Pender Growth Fund Inc. (the "Fund") announces that a
company representing 5% of the Fund's portfolio has entered into a
going-private sale transaction.
IWG Technologies Inc. (TSXV: IWG) ("IWG") has entered
into an arrangement agreement which, if completed, will see the
Fund selling all of its shares of IWG to 1096777 B.C.
Ltd., a private British Columbia corporation (the
"Purchaser"), at a price of $0.43 per share. IWG shares closed on the TSX
Venture Exchange at $0.32 on
November 24, 2016. The agreement
represents a 34% premium to this closing price. The
transaction is subject to, among other conditions, IWG shareholder,
TSX Venture Exchange and court approval.
The Fund purchased shares in IWG in August 2008 for $0.10. At the proposed sale price of $0.43 per share, this represents a 330% return on
the Fund's investment.
"This has been a long standing investment for the Fund but
throughout that time our investment thesis has remained consistent
with the goals of the Fund: to buy small, profitable technology
companies with strong competitive advantages at a good price and
wait for either the market or a third party buyer to recognize the
value that is being built," said David
Barr, Pender's President and Portfolio Manager.
IWG reports that it intends to call a shareholders' meeting in
January to propose the arrangement for approval. The
Fund, together with the directors and executive officers of IWG and
certain other shareholders of IWG who hold in the aggregate
approximately 22.8% of the issued and outstanding IWG shares
(assuming no exercise of existing IWG stock options) have entered
into voting and support agreements with the Purchaser and have
agreed to vote all of their IWG shares in favour of the
arrangement.
Under the terms of the agreement, IWG will continue to operate
in British Columbia with its
current management and employees remaining in place. The Purchaser
is directly or indirectly controlled by one or more of New
York based WM Capital Management, Inc. and BASE Equity
Partners.
For additional details regarding the transaction, readers are
referred to IWG's announcement of the transaction on November 28, 2016, available under IWG's SEDAR
profile at www.sedar.com.
About the Fund
The Fund is a closed-end investment
fund with a goal of increasing the net asset value per share over
the long-term. The Fund aims to uncover unique investment
situations in small but profitable companies, often in the
technology sector.
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.
CAUTION REGARDING FORWARD LOOKING STATEMENTS
This news release includes certain "forward-looking information"
under applicable Canadian securities laws relating to the
anticipated completion of the IWG sale transaction. These
statements reflect the Fund's current views with respect to future
events and are necessarily based upon a number of assumptions and
estimates that, while considered reasonable by the Fund management,
are inherently subject to significant uncertainties and
contingencies. Many factors, both known and unknown could cause
actual results, performance or achievements to be materially
different from the results, performance or achievements that are or
may be expressed or implied by such forward-looking statements or
information. Such factors include, without limitation: the
satisfaction or waiver of all applicable conditions to closing of
the transaction including, without limitation, receipt of all
necessary shareholder, court and regulatory approvals or consents
and lack of material changes with respect to IWG and its business,
all as more particularly set forth in the arrangement agreement.
In addition, in the event the arrangement agreement is
terminated in certain circumstances, IWG may be required to pay a
termination fee to the Purchaser, the result of which could have a
material adverse effect on IWG's financial position and results of
operations and its ability to fund growth prospects and current
operations. Readers are cautioned against attributing undue
certainty to forward-looking statements or information. The Fund
does not intend, and does not assume any obligation, to update
these forward-looking statements or information to reflect changes
in assumptions or changes in circumstances or any other events
affecting such statements or information, other than as required by
applicable law.
SOURCE Pender Growth Fund (VCC) Inc.