Jovian Announces Signing of Arrangement Agreement with Industrial Alliance

TORONTO, July 16, 2013 /CNW/ - Jovian Capital Corporation ("Jovian") (TSX: JOV) today announced that it has entered into a definitive arrangement agreement (the "Agreement") whereby Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance") would acquire all of the issued and outstanding common shares in the capital of Jovian for $10.23 in cash per share (the "Cash Consideration") or 0.2386 of a common share of Industrial Alliance (the "Exchange Ratio"), or a combination thereof, subject to pro-ration based upon the issuance of a maximum of 35% of the aggregate consideration payable in Industrial Alliance common shares. The Cash Consideration represents a premium of 46% to the closing price of Jovian's common shares on the Toronto Stock Exchange ("TSX") on July 15, 2013 (the "Calculation Date") and a 46% premium based on the five-day volume weighted average trading price ("VWAP") ending on the Calculation Date of Jovian's common shares. The Exchange Ratio was calculated by dividing the amount of the Cash Consideration by the five-day VWAP on the Calculation Date of Industrial Alliance's common shares.

The acquisition will be completed pursuant to a statutory plan of arrangement (the "Arrangement"). The Agreement contains customary representations, warranties and covenants for an agreement of this nature provided by each party and is conditional on the completion of a number of obligations and conditions (including securityholder, regulatory and contractual approvals and consents) to be satisfied by the parties up to and including the closing date, which is anticipated to be on or about October 1, 2013. The Agreement contains a termination fee of $4 million payable by Jovian to Industrial Alliance in certain circumstances, including in the event of Jovian's acceptance of a superior proposal prior to closing.  If the Agreement is terminated by either Jovian or Industrial Alliance, in certain circumstances as set out in the Agreement, an expense reimbursement will be payable to the other party in the amount of $1.25 million in the case of termination by Jovian and $1.25 million in the case of termination by Industrial Alliance.

"We are pleased to have reached this agreement with Industrial Alliance which we believe is a good transaction for our shareholders," said Philip Armstrong, CEO of Jovian. "The purchase price represents a significant premium to the current market price of our common shares, allowing our shareholders to harvest the economic value of our enterprise."

"The Jovian operating companies each bring distinctive and unique products and service expertise that complement our existing wealth management platform," stated Yvon Charest, President and Chief Executive Officer of Industrial Alliance, one of Canada's leading insurance and financial services companies. "We look forward to working with them to expand our products and services to current distribution partners as well as extending that offering to broader distribution channels."

"We have a great portfolio of companies, with established brands," added Mark Arthur, President of Jovian.  "Industrial Alliance recognizes the value of our strong, unique, independent brands and intends to continue to operate the majority of the Jovian companies as independent brands, while providing a national distribution platform and the capital to allow these companies to achieve their significant growth potential."

Jovian plans to convene a joint special meeting of its shareholders and debentureholder to consider the Arrangement in September, and it is anticipated that an information circular containing detailed disclosure regarding the Arrangement will be mailed to Jovian's shareholders and debentureholder in August. The Arrangement will require the approval of 66²/₃% of Jovian's shareholders, 66²/₃% of the holders of Jovian's Series A subordinated unsecured convertible debentures due June 30, 2015 (the "Debentures") and a majority of votes cast by minority shareholders, in accordance with the terms of the order(s) to be granted by the Ontario Superior Court of Justice and pursuant to the Canada Business Corporations Act and Multilateral Instrument 61-101 "Protection of Minority Security Holders in Special Transactions". The principal amount of the Debentures that are issued and outstanding is $5 million. Strongwater Investments Ltd., the major shareholder of Jovian (the "Major Shareholder"), owns all of the issued and outstanding Debentures.

The Major Shareholder and all of the directors and senior management of Jovian holding, directly and indirectly, an aggregate of approximately 38% of the outstanding Jovian common shares, have signed voting support agreements pursuant to which such persons will agree to vote in support of the Arrangement, subject to certain terms and conditions.

The Board of Directors of Jovian (the "Board"), after reviewing, among other things, the recommendation of the Special Committee of the Board and the advice of its legal and financial advisors, has unanimously determined that the Arrangement is in the best interests of Jovian and is fair to its shareholders. The Special Committee and Board engaged TD Securities Inc. ("TD Securities") to act as its financial advisors and Cassels Brock & Blackwell LLP as its legal counsel in connection with the transaction. TD Securities has provided an opinion to the Board that, based upon and subject to the assumptions, limitations and other considerations, in such opinion, the consideration to be received by the holders of Jovian common shares (other than the Major Shareholder and its affiliate) is fair, from a financial point of view, to such holders.

The Agreement and information circular will be filed and available for public download at www.sedar.com.

About Industrial Alliance Insurance and Financial Services Inc.
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company with operations in all regions of Canada as well as in the United States. The Company offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services for both individuals and groups. The fourth largest life and health insurance company in Canada, Industrial Alliance contributes to the financial security of over three million Canadians, employs 4,300 people and has assets under management and administration of more than $87 billion. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG.

About Jovian Capital Corporation
Jovian acquires, creates and grows financial services companies specializing in two primary market segments: wealth management and asset management. The Jovian group of companies (MGI Securities Inc., MGI Securities (USA) Inc., T.E. Wealth, Leon Frazer & Associates Inc., HAHN Investment Stewards & Company Inc., JovFinancial Solutions Inc. and Fit Private Investment Counsel Inc.) oversees approximately $6.9 billion of client assets ($5.4 billion in client assets managed or advised and $1.5 billion in assets under administration).  Additional information is available at www.joviancapital.com and www.sedar.com.

This press release contains "forward-looking statements" within the meaning of applicable securities laws that are intended to be covered by the safe harbours created by those laws, including statements that use forward-looking terminology such as "will", "anticipate", "believe", "continue", "potential", or the negative thereof or other variations thereof or comparable terminology. Such forward-looking statements may include, without limitation, statements regarding the completion of the proposed transaction and other statements that are not historical facts. While such forward-looking statements are expressed by Jovian,  as stated in this release, in good faith and believed by Jovian to have a reasonable basis, they are subject to important risks and uncertainties including, without limitation, satisfying the terms and conditions of the Arrangement including the approval of the Arrangement by Jovian securityholders, court approval of the Arrangement, the receipt of required governmental and regulatory approvals and consents, and the satisfaction of conditions, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. As a result of these risks and uncertainties, the proposed transaction could be modified, restructured or not be completed, and the results or events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties. Jovian is not affirming or adopting any statements made by any other person in respect of the proposed transaction and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities or to comment on expectations of, or statements made by any other person in respect of the proposed transaction. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement.  Reliance on forward-looking statements is at investors' own risk.

SOURCE: Jovian Capital Corporation

Don Sangster, Investor Relations, Jovian Capital Corporation, [phone]; or
Mark Arthur, President, Jovian Capital Corporation, [phone].