Radiant Communications Corp. announces proposed going-private transaction

VANCOUVER, March 8, 2013 /CNW/ - Radiant Communications Corp. ("Radiant") (TSX-V: RCN) is pleased to announce that it has entered into a definitive agreement (the "Arrangement Agreement") with Maxam Opportunities Fund LP and its affiliated entity, Maxam Opportunities Fund (International) LP (together, "Maxam"), Pender Growth Fund (VCC) Inc. and its affiliated entity, Pender Financial Group Inc. (together, "Pender"), and a company established jointly by Maxam and Pender for the purposes of the transactions contemplated by the Arrangement Agreement (the "Purchaser" and together with Maxam and Pender, collectively, the "Purchaser Group"), under which the Company would be taken private pursuant to a plan of arrangement (the "Plan of Arrangement") under the provisions of the Canada Business Corporations Act. Maxam and Pender collectively own approximately 65% of the issued and outstanding common shares of Radiant ("Common Shares").

Under the Plan of Arrangement, (i) the Purchaser will acquire all of the Common Shares that Maxam and Pender do not already own for cash consideration of $0.85 per Common Share (the "Consideration"), and (ii) all of the outstanding options of the Company ("Options"), other than Options held by management of the Company ("Management Options"), will be cancelled and optionholders holding such Options that have an exercise price that is less than the Consideration will receive a cash amount equal to the amount by which the Consideration exceeds the exercise price payable under such Options. Each Management Option outstanding immediately prior to the effective time of the Arrangement (the "Effective Time") will be rolled over at the Effective Time into an option to purchase equity of the Purchaser or its successor entity, subject to the same terms and conditions as are applicable to the Management Option prior to the Effective Time or as otherwise agreed by the parties.

The Consideration represents a 19.7% premium to the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange for the period ending March 7, 2013. The transaction provides total consideration to minority shareholders of approximately $4.5 million and implies an equity value for Radiant of approximately $12.9 million.

The board of directors of Radiant (the "Board") has unanimously determined (with Messrs. Ciampi, Edmison and Gutmanis abstaining) that the Plan of Arrangement is in the best interests of Radiant and is fair to its shareholders.

The determination of the Board was made upon the recommendation of a special committee of independent directors (the "Independent Committee") and after consideration of the advice of legal and financial advisors to the Independent Committee and the Company.

Don Calder, Chairman of the Independent Committee stated "This proposal represents a significant premium to the 20 day volume weighted average price of the Common Shares prior to today's announcement. We recommend that shareholders vote in favour of the Plan of Arrangement at the special meeting of shareholders that will be called to approve the transaction."

Evans & Evans, Inc., which is acting as financial advisor to the Independent Committee, has provided an opinion to the effect that, as of the date of the opinion and based upon and subject to the limitations and qualifications therein, the consideration to be received for the Common Shares is fair, from a financial point of view, to the holders of the Common Shares (other than Maxam, Pender and their affiliates). Evans & Evans, Inc. has also prepared and delivered a formal valuation of the Common Shares under the supervision of the Independent Committee in accordance with the standards set out in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The implementation of the Plan of Arrangement will be subject to approval by the holders of the affected securities at the special meeting of the Company (the "Special Meeting") to be held on April 24, 2013. The record date for the determination of securityholders of the Company entitled to receive notice of and to vote at the Special Meeting is March 21, 2013.

As the transaction will constitute a "business combination" for the purposes of MI 61-101, the implementation of the Plan of Arrangement will be subject to approval by a majority of the votes cast by shareholders other than Maxam, Pender and their affiliates, in addition to approval by 66⅔% of the votes cast by holders of Common Shares. The transaction also will be subject to certain closing conditions customary in transactions of this nature including, among other things, a condition that certain members of management of Radiant enter into employment and shareholder arrangements with the Purchaser.

The Arrangement Agreement provides for, among other things, a non-solicitation covenant on the part of Radiant (subject to customary fiduciary out provisions). The Arrangement Agreement also provides the Purchaser with a "right to match" and requires the Company to pay the Purchaser Group, in certain circumstances, the actual documented amount of third party expenses of the Purchaser Group incurred in connection with the Arrangement Agreement and the Arrangement up to a maximum amount of $100,000.

Perlus Microcap Fund LP, an arm's length shareholder of Radiant holding approximately 11% of the outstanding Common Shares, has entered into a lock-up agreement with the Purchaser to vote the outstanding Common Shares that it holds in favour of the Plan of Arrangement.

The terms and conditions of the proposed transaction will be disclosed in an information circular that will be mailed in April 2013 to the securityholders of Radiant that will be entitled to vote at the Special Meeting. It is anticipated that the transaction, if approved by Radiant securityholders and the Supreme Court of British Columbia (the "Court"), will be completed in the second quarter of 2013.

McMillan LLP and Mogan Daniels Slager LLP are acting as legal counsel to Radiant and the Independent Committee, respectively. Cassels Brock & Blackwell LLP is acting as legal counsel to the Purchaser and Maxam.

Copies of the Arrangement Agreement, the information circular for the Special Meeting and certain related documents will be available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

About Radiant Communications Corp.

Radiant is a leading provider of managed network and cloud hosting solutions for medium-size enterprises. Leveraging one of the largest Internet footprints across Canada, Radiant offers a comprehensive portfolio of reliable, secure and scalable IT infrastructure services, simplified under a single point of contact. For over 15 years, many of Canada's most recognized brand names have been relying on Radiant to support their mission-critical business operations.

Cautionary Statement

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.

Forward-looking statements:

This press release may contain forward-looking information or forward-looking statements (collectively referred to as "forward-looking statements"), including statements that use forward-looking terminology such as "may", "will", "expect", "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, the holding of the Special Meeting and other statements that are not historical facts. While such forward-looking statements are expressed by Radiant, as stated in this release, in good faith and believed by Radiant to have a reasonable basis, they are subject to important risks and uncertainties including, without limitation, required Radiant securityholder approval and necessary Court approval, the satisfaction or waiver of certain other conditions contemplated by the Arrangement Agreement, and changes in applicable laws or regulations, 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. Radiant 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 law 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.

For further information about Radiant, please visit www.radiant.net.

SOURCE: Radiant Communications Corp.

Chuck Leighton, CFO, 604.692.4531, [email protected]