ABC Announces Filing of a Rights Offering Circular and Closing of Previously Announced Private Placement

ABC Technologies Holdings Inc. (TSX: ABCT) (“ABC Technologies”, “ABC” or the “Company”), a leading manufacturer and supplier of custom, highly engineered technical plastics and lightweighting innovations to the global automotive industry, today announced (i) the filing of the Company’s rights offering circular (the “Circular”) and rights offering notice (the “Notice”), with respect to ABC’s offering of rights (the “Rights Offering”) to holders of Common Shares of record as at the close of business on January 19, 2022 (the “Record Date”), and (ii) the closing of its previously announced private placement (the “Private Placement”) of 5,253,642 common shares of ABC Technologies (the “Common Shares”), which are intended to finance the acquisition of MPE Flow House, Inc., the parent company of dlhBOWLES, Inc. from MPE Partners, L.P. and others for approximately US$255 million (the “dlhB Acquisition”).

Further details relating to the dlhB Acquisition are provided in a separate press release issued by the Company on January 5, 2022.

Rights Offering

The Company has today filed the Circular and Notice and has launched the Rights Offering, pursuant to which each holder of Common Shares as at the Record Date will receive one right (a “Right”) to purchase one Common Share (a “Rights Share”) at a subscription price of C$5.83 per Rights Share. The Company expects to raise gross proceeds of approximately C$336.9 million from the Rights Offering and intends to use the proceeds less offering expenses to fund the dlhB Acquisition.

The Rights Offering includes an additional subscription privilege under which eligible holders of Rights who fully exercise the Rights issued to them under their basic subscription privilege will be entitled to subscribe for additional Rights Shares, if available, that are not otherwise subscribed for under the Rights Offering.

In connection with the Rights Offering, the Company has entered into a standby purchase agreement dated January 4, 2022 (the “Standby Agreement”) with the AP IX Alpha Holdings (Lux) S.à.r.l, the Company’s controlling shareholder (“AP IX Alpha”) and a fund managed by affiliates of Apollo Global Management, Inc. (together with AP IX Alpha, the “Apollo Funds”), and funds managed directly or indirectly by Oaktree Capital Management, L.P., OCM Luxembourg OPPS XI S.à.r.l. (“OPPS XI”) and OCM Luxembourg OPPS XB S.à.r.l. (“OPPS XB”, and together with OPPS XI, the “Oaktree Funds”, and collectively with the Apollo Funds, the “Standby Purchasers”), pursuant to which the Standby Purchasers have, subject to certain terms and conditions, agreed to exercise all of each Standby Purchaser’s Rights issuable to it under such Standby Purchaser’s basic subscription privilege, and to purchase all of the Rights Shares that are not otherwise subscribed for and purchased under the Rights Offering, so that the maximum number of Rights Shares that may be issued in connection with the Rights Offering will be issued (the “Standby Commitment”). No standby fee will be paid to the Standby Purchasers in connection with the Rights Offering.

Full details of the Rights Offering are set out in the Notice and the Circular, which are available on the Company’s issuer profile on SEDAR at www.sedar.com. The Notice and accompanying Rights direct registration statements (“Rights DRS”) will be mailed to each eligible registered holder of Common Shares as at the Record Date. To subscribe for Rights Shares, registered holders of Common Shares must mail the completed Rights DRS, together with applicable funds, to the Rights depositary and subscription agent, Computershare Investor Services, Inc., prior to 4:30 p.m. (Toronto time) on February 14, 2022 (the “Expiry Date”). Shareholders who hold their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

The Rights Offering will be made to all eligible holders of Common Shares as of the Record Date who are resident in any of the provinces and territories of Canada. Accordingly, and subject to the detailed provisions of the Circular, Rights will not be delivered to, nor will they be exercisable by, persons resident outside of any of the provinces and territories of Canada, unless such Rights holder can establish that the exercise of Rights would be lawful and in compliance with all securities and other laws applicable in Canada and the jurisdiction such holder is a resident.

The Rights will be listed for trading on the TSX under the symbol “ABCT.RT”. The Rights will cease trading, and will no longer be listed, on the TSX as at 12:00 p.m. (Toronto time) on the Expiry Date, and after such time unexercised Rights will be void and of no value. The ex-rights trading date for the Common Shares on the Toronto Stock Exchange will be January 18, 2022. This means that Common Shares purchased on or following January 18, 2022 will not be entitled to receive Rights under the Rights Offering.

As at the date hereof, following the closing of the Private Placement, there are 57,790,064 Common Shares issued and outstanding. The Company expects that following the closing of the Rights Offering there will be 115,580,128 Common Shares issued and outstanding.

Private Placement

The Company has closed its previously announced Private Placement of 5,253,642 Common Shares to AP IX Alpha and the Oaktree Funds (or 3,500,705 Common Shares and 1,752,937 Common Share, respectively) at a price of approximately US$4.60 per Common Share (being the USD equivalent of C$5.83, based on the US$/C$ exchange rate posted by the Bank of Canada as of January 10, 2022), for aggregate gross proceeds of approximately US$24.1 million (or approximately C$30.6 million, based on the US$/C$ exchange rate posted by the Bank of Canada as of January 10, 2022).

All Common Shares issued pursuant to the Private Placement are subject to a four-month resale restricted period from the closing date of the Private Placement, in accordance with applicable Canadian securities law.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the " 1933 Act ") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

Neither the Private Placement, the Rights Offering nor the Common Shares issuable pursuant to the Private Placement, the Rights being offered under the Rights Offering or the Rights Shares issuable upon exercise of the Rights have been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or the securities regulatory authorities in any state of the United States, nor has the SEC or the securities regulatory authorities in any state of the United States passed upon the fairness or merits of the Private Placement or the Rights Offering or upon the adequacy or accuracy of the information contained in this news release. Any representation to the contrary is a criminal offence.

Neither the Common Shares issuable pursuant to the Private Placement, the Rights being offered pursuant to the Rights Offering or the Rights Shares issuable upon exercise of the Rights have been or will be registered under the 1933 Act, as amended, or applicable state securities laws, and may not be exercised, offered or sold, as applicable, in the United States absent registration or an applicable exemption from the registration requirements. Any shareholder of the Company that is in the United States or a U.S. Person cannot participate in the Private Placement or the Rights Offering unless the Company determines that such shareholder of the Company satisfies certain eligibility criteria in order that such shareholder’s participation is in compliance with applicable securities laws.

The TSX has not reviewed and does not accept responsibility for the adequacy of the content of the information contained herein, and no securities regulatory authority has either approved or disapproved the contents of this news release.

Forward Looking Statements

This news release contains certain "forward-looking statements" concerning anticipated future events, results, circumstances, performance or expectations with respect to the Company and its operations, including its strategy and financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts”, “schedule”, or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. The forward-looking statements contained in this news release include, but are not limited to: the dlhB Acquisition; the Private Placement; the Rights Offering; the Standby Agreement; the Standby Commitment; the intended use of proceeds of the Private Placement and the Rights Offering; and other future potential business acquisition opportunities. Forward-looking statements are based on underlying assumptions and management’s beliefs, estimates and opinions, and are subject to inherent risks and uncertainties surrounding future expectations generally that may cause actual results to vary from plans, targets and estimates. Some of the important risks and uncertainties that could affect forward-looking statements include, but are not limited to: the closing of the dlhB Acquisition; the closing of Rights Offering; and operational, general economic, market and business conditions, regulatory developments and weather. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the factors discussed under the heading “Risk Factors” in the Company’s Annual Information Form dated June 30, 2021 which is available under the Company’s issuer profile on SEDAR at www.sedar.com. The Company cautions readers that actual results may vary significantly from those expected should certain risks or uncertainties materialize or should underlying assumptions prove incorrect. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company 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 as required by law.

About ABC Technologies

ABC Technologies is a leading manufacturer and supplier of custom, highly engineered, technical plastics and lightweighting innovations to the North American light vehicle industry, serving more than 25 original equipment manufacturer customers globally through a strategically located footprint. ABC Technologies’ integrated service offering includes manufacturing, design, engineering, material compounding, machine, tooling and equipment building that are supported by an experienced engineering team of approximately 600 skilled professionals and 6,150 employees worldwide. The Company operates in six product groups: HVAC Systems, Interior Systems, Exterior Systems, Fluid Management, Air Induction Systems, and Flexible & Other. ABC Technologies’ head office address is 2 Norelco Drive, Toronto, Ontario, Canada M9L 2X6.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220112005667/en/

Nathan Barton, Investor Relations
[email protected]