An investor group comprised of Michael Hirsh, Toper Taylor and TD Capital Canadian Private Equity Partners signed a definitive agreement Oct. 30, 2003 to acquire all of the outstanding multiple and limited voting shares of CINAR Corp. for $143.9 million in cash by way of a plan of arrangement.
CINARs board of directors unanimously approved the transaction, and the companys founders, holding approximately 96% of the multiple voting shares, have agreed to vote for the sale. However, $1.2 million of the purchase price will be held in escrow pending resolution of a dispute with the companys founders regarding the validity of their exercise of certain CINAR options.
Shareholders will receive a pro rata distribution of the potential net proceeds from the settlement of certain outstanding litigation if it is settled five business days before the meeting when shareholders will be asked to vote on the transaction and providing certain other conditions are met. If net litigation proceeds have not been determined by then, CINAR shareholders will be granted non-transferable contingent cash entitlements providing them with the right to receive 70% of the net proceeds of such litigation.
The deal is expected to close within 60 days, pending shareholder and regulatory approvals. RBC Capital Markets acted as advisor to the investor group, with debt financing to be provided by RBC Royal Bank Media & Entertainment Group (Toronto) and RBC Centura Knowledge Based Industries Group (North Carolina).
From ARTHUR to CAILLOU, from Carson-Dellosa to HighReach, CINAR has a number of popular and important brands in childrens education and entertainment, said former Nelvana chiefs Hirsh and Taylor in a statement. We are committed to building these highly recognizable brands and look forward to working closely with our team and our new colleagues to lead the company to new heights. They have big plans for the education division, which will continue under the leadership of Steve and Patti Carson.
As a well-capitalized private company stimulated by a new vision and the creative talent of its people, we are confident that CINAR will play a leadership role in its markets and are delighted to drive its renaissance, continued Hirsh and Taylor.
We are happy to be working with Michael Hirsh and Toper Taylor, highly respected veterans of the entertainment industry, said Joe Wiley, md of TD Capital Canadian Private Equity Partners, and believe that they have the requisite experience and skills to build on CINARs history and strengths.
We look forward to working with our new partners and focusing all of our energy on developing new products and services for our markets and growing the business, stated Carson, president of CINAR Education and co-founder of Carson-Dellosa Publishing.
Hirsh was a founder and former ceo of Nelvana Limited in Canada and Taylor was president of international distribution, marketing and consumer products for Nelvana Limited and president of Nelvana Communications, its L.A.-based sales and development office. Hirsh also co-founded Canadian kids broadcaster TELETOON and is the co-author of THE GREAT CANADIAN COMICS. Taylor has extensive experience as a television packaging agent at the William Morris Agency.
TD Capital Canadian Private Equity Partners (CPEP) is a fund established by TD Capital, the private equity arm of TD Bank Financial Group. TD Capital has approximately $3 billion of capital under management through its offices located in Canada and the U.S. In 2000, CPEP raised the largest ever bank-sponsored private equity partnership in Canada, with $635 million of commitments. For more information on TD Capital, please visit www.tdcapital.com.
