Partners Group Agrees to Acquire Axia for $4.25 per Share in Going Private Transaction

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CALGARY, March 9, 2016 /CNW/ - Axia NetMedia Corporation ("Axia") (TSX: AXX) announced today that it has entered into an arrangement agreement (the "Arrangement Agreement") under which Partners Group, on behalf of its clients ("Partners Group") has agreed to indirectly acquire all of the outstanding common shares of Axia (the "Shares") for a cash payment of $4.25 per Share (the "Arrangement"), representing total equity value, on a fully diluted basis, of approximately $272 million. 

The $4.25 per Share purchase price represents a premium of 49% to the closing price of the Shares on the Toronto Stock Exchange on March 8, 2016, the last trading day prior to this announcement, and a 47% premium to the volume-weighted average trading price of the Shares over the last 60 trading days.

The board of directors of Axia (the "Board") (with an interested director abstaining), based on the unanimous recommendation of its special committee of independent directors (the "Special Committee") and after consultation in its evaluation of the Arrangement with legal and financial advisors, has unanimously approved the Arrangement Agreement, determined that the Arrangement is in the best interests of Axia and recommends that shareholders of Axia (the "Shareholders") vote in favour of the Arrangement.

"We have gone through an exhaustive process aimed at enabling the company to realize the full potential of our businesses in North America and France" said Art Price, Chairman and CEO of Axia. "I am extremely proud of what Axia has accomplished and believe that this agreement with Partners Group offers current shareholders a compelling premium and provides Axia the opportunity to more effectively pursue our long-term investment and growth strategy, continue to provide compelling services to our customers and further enhance our strategic position."

Following the closing of the Arrangement, Axia will continue to be run by its current management team led by Mr. Art Price.  Partners Group will work with the management teams of Axia and Covage to carry out an ambitious growth plan for each company.  Brandon Prater, Partner, Co-Head Private Infrastructure, comments: "Axia NetMedia provides the 21st century communication infrastructure available in urban centers to rural communities. The Company has built great fiber networks under the expertise of its management team, led by Arthur Price. We are confident that Partners Group's experience in the communications sector, coupled with our global platform, represent an excellent match for Axia's growth strategy and will help the Company to continue its development going forward. Our plan is to provide Axia with the expansion capital it needs and access to our platform to become a world-class communication network operator."

Details of the Arrangement

The Arrangement will be carried out by way of a statutory plan of arrangement under the Business Corporations Act (Alberta), and will be subject to approval by (i) at least two-thirds of the votes cast by Shareholders in person or by proxy, and (ii) the "majority of the minority", being a majority of the votes cast by Shareholders excluding Shareholders whose votes may not be included in determining if minority approval is obtained pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.  Shareholder approval of the Arrangement will be sought at a special meeting of Shareholders (the "Meeting") that is expected to be held in May 2016.  The terms and conditions of the Arrangement will be summarized in Axia's management information circular, which is expected to be mailed to Shareholders in April 2016.

In connection with the Arrangement, Oppenheimer & Co. Inc. ("Oppenheimer"), Axia's financial advisor, delivered an opinion, dated March 8, 2016, to the Special Committee and the Board as to the fairness, from a financial point of view and as of such date, of the consideration to be received by the holders of Axia common shares pursuant to the Arrangement Agreement.  The full text of Oppenheimer's written opinion, dated March 8, 2016, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, will be included in Axia's management information circular.

Under the terms of the Arrangement Agreement, the Arrangement is also subject to the final approval of the Court of Queen's Bench of Alberta following the Meeting, the completion of applicable regulatory reviews and the satisfaction of certain closing conditions customary in transactions of this nature, including the absence of material adverse changes in the business and affairs of Axia. The Arrangement is not conditional on Partners Group obtaining financing.

The Arrangement Agreement contains customary non-solicitation provisions which restrict Axia from soliciting or entertaining any third party acquisition proposals, subject to customary "fiduciary out" provisions that entitle Axia to consider and accept a superior proposal subject to a matching right in favour of Partners Group. If the Arrangement Agreement is terminated in certain circumstances, including if Axia enters into an agreement with respect to a superior proposal or if the Board withdraws its recommendation with respect to the Arrangement, Partners Group is entitled to a termination payment of $15 million.

Axia's directors and senior officers and a significant shareholder of Axia holding, in aggregate, approximately 22% of the outstanding Shares have entered into voting agreements which provide that they will vote the Shares held by them in favour of the resolution authorizing the Arrangement. As part of the transaction, certain members of senior management intend to reinvest a portion of the proceeds of the sale of their Shares into equity in the entity that will be indirectly acquiring Axia.

Axia has agreed that it will not pay any dividends prior to the date of the completion of the Arrangement.  Accordingly, Axia will not make a first quarter dividend payment that would otherwise have been payable in April.  In addition, Axia has agreed to suspend its automatic normal course issuer bid as soon as it is permitted to do so. 

A copy of the Arrangement Agreement will be available on Axia's website at www.axiafibrenet.com and on SEDAR at www.sedar.com.

Axia's exclusive financial advisor is Oppenheimer & Co. Inc. and its legal counsel is Burnet, Duckworth & Palmer LLP. Partners Group has engaged RBC Capital Markets as exclusive financial advisor and DLA Piper as legal counsel in connection with the Arrangement.

About Axia

Axia owns, operates and sells services over fibre optic communications infrastructure.  Axia trades on the Toronto Stock Exchange under the symbol "AXX".

About Partners Group

Partners Group is a global private markets investment management firm with over EUR 46 billion (USD 50 billion) in investment programs under management in private equity, private real estate, private infrastructure and private debt. The firm manages a broad range of customized portfolios for an international clientele of institutional investors. Partners Group is headquartered in Zug, Switzerland, and has offices in San Francisco, Houston, New York, São Paulo, London, Guernsey, Paris, Luxembourg, Milan, Munich, Dubai, Mumbai, Singapore, Shanghai, Seoul, Tokyo and Sydney. The firm employs over 800 people and is listed on the SIX Swiss Exchange (symbol: PGHN) with a major ownership by its partners and employees.

Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws and which are based on the expectations, estimates and projections of management of Axia as of the date of this news release unless otherwise stated. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains forward-looking statements and information concerning: the anticipated benefits of the Arrangement to the parties and the Shareholders; the timing and anticipated receipt of required regulatory, court and Shareholder approvals for the Arrangement; the ability of the parties to satisfy the other conditions to, and to complete, the Arrangement; and the anticipated timing of the meeting of Shareholders to consider the Arrangement and for the closing of the Arrangement.

In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the proposed Arrangement and the anticipated timing for completion of the Arrangement, the parties have provided such information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare and mail Meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court, Shareholder, stock exchange and other third party approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Arrangement; and other expectations and assumptions concerning the Arrangement. The anticipated dates provided may change for a number of reasons, including unforeseen delays in preparing Meeting materials, the inability to secure necessary Shareholder, regulatory, court or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Arrangement. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Risks and uncertainties inherent in the nature of the transaction include the failure of Axia to obtain necessary Shareholder, regulatory, court and other third party approvals, including those noted above, or to otherwise satisfy the conditions to the completion of the Arrangement, in a timely manner, or at all. Failure to so obtain such approvals, or the failure of the parties to otherwise satisfy the conditions to or complete the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, and Axia continues as an independent entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources of Axia to the completion of the transaction could have an impact on Axia's current business relationships (including with future and prospective employees, customers, distributors, suppliers and partners) and could have a material adverse effect on the current and future operations, financial condition and prospects of Axia. Furthermore, the failure of Axia to comply with the terms of the Arrangement Agreement may result in Axia being required to pay a fee to Partners Group, the result of which could have a material adverse effect on Axia's financial position and results of operations and its ability to fund growth prospects and current operations.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Axia are included in reports on file with applicable securities regulatory authorities. The forward-looking statements and information contained in this press release are made as of the date hereof and the parties undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This release does not constitute an offer to purchase or a solicitation of an offer to sell securities. Shareholders are advised to review any documents that may be filed with securities regulatory authorities and any subsequent announcements because they will contain important information regarding the Arrangement and the terms and conditions thereof.

SOURCE Axia NetMedia Corporation

Please visit Axia's website at www.axiafibrenet.com, or contact: Art Price, Chief Executive Officer, Axia NetMedia Corporation, [phone], [email protected]; Please visit Partners Group's website at www.partnersgroup.com, or contact: Alexander von Wolffradt, Investor Relations, Partners Group, [phone], [email protected]; or Jenny Blinch, Public Relations, Partners Group, [phone], Email: [email protected].