CVTech Group Inc. provides update on a letter to shareholders addressed by an insider

DRUMMONDVILLE, QC, May 31, 2013 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) has been informed that Mr. Guy Aubert, an insider and former director of the Corporation who resigned on January 24, 2013, has addressed a letter (the "Letter") to shareholders of the Corporation containing erroneous and incomplete information, which has also been published in certain media. The Corporation wishes to provide an update on certain information contained in that Letter.

On December 19, 2011, the Corporation received a conditional and non-binding offer by the NYSE-listed company mentioned by Mr. Aubert (the "Company") in the Letter. Following reception of this offer, the Corporation's Board of Directors (the "Board") informed the Company of its interest and added that given its fiduciary duties, it would initiate a process to solicit competing offers to ensure the value of the Corporation would be maximized, notably for the benefit of all shareholders. Upon receiving this information, the Company indicated to the Board that it was withdrawing its offer since the Corporation wanted to extend solicitation offers to other parties.

In 2012, the Board initiated a review of strategic alternatives. To this end, the Corporation appointed an independent committee (the "Committee") to review and consider such alternatives and also retained the services of technical advisors and legal counsel to assist in carrying out its mandate. In addition, the Committee, in the course of its mandate, proceeded with a valuation of the Corporation.

The process of maximizing the Corporation's value initiated by the Board was abruptly interrupted due to a proxy fight initiated by Mr. Aubert with regards to the Corporation's annual meeting of shareholders held on May 30, 2012.

In January 2013, the Company once again presented a conditional and non-binding offer that included less favourable conditions than the preceding offer. The Board contacted the Company to inform it that its offer could not be considered under such circumstances. The Board received a third offer at a price inferior to the valuation of the Corporation set by the Committee. Following these repetitive offers, the Board made the decision that it was in the best interest of the Corporation and of its shareholders to continue the execution of its initial business plan consisting in the realization of strategic acquisition aimed at extending its geographical reach and its expertise rather than continuing to invest time and money in analyzing proposals whose terms did not, notably, meet the assessment of the value of the Corporation. The Board also believed that the execution of its business plan could i) provide, over the mid-term, a better growth in the Corporation's value than a short-term sale; and ii) that the continuation of its activities in Quebec were in the best interest, not only of shareholders, but also of suppliers, customers and employees of the Corporation.

The Corporation's management is of the opinion that Mr. Aubert's recurring actions disrupt the Board's efforts, who is bound by confidentiality agreements, and prevent it from carrying out its principal mandate to maximize shareholder value by internal growth and acquisitions, affect employees' morale and harm the Corporation's image not only for its customers, suppliers and shareholders, but also for all investors.

For reasons invoked above, the Corporation's management believes that Mr. Aubert, as an insider and former director, contravened to his incumbent fiduciary, confidentiality and reserve duties and is currently evaluating means at its disposal in order to bring these infractions to an end.

OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a leading provider of construction and maintenance services to the public utility and heavy industrial markets mainly in Quebec, Ontario and the eastern United States. Through its subsidiaries, the Corporation provides maintenance and construction services for electricity transmission and distribution networks, substations and electrical power houses, as well as the control of vegetation on rights-of-way for electrical lines.

FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management assumes no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.

Further information regarding CVTech is available in the SEDAR database (www.sedar.com) and on the Corporation's website at www.cvtech.ca.

SOURCE: CVTECH GROUP INC.

André Laramée, MBA 
CMA
President and Chief Executive Officer
 819-479-7771 
[email protected]

Mario Trahan, CPA,
Chief Financial Officer
819-479-7771
[email protected] 

MaisonBrison Communications 
Martin Goulet, CFA
514-731-0000
[email protected]