CST: 26/06/2016 15:58:47   

Boulder Energy Ltd. Announces Going-Private Transaction Led by ARC Financial Corp.

122 Days ago

CALGARY, ALBERTA--(Marketwired - Feb 24, 2016) - BOULDER ENERGY LTD. ("Boulder" or the "Company") (TSX:BXO)(OTCQX:BLLDF) is pleased to announce that it has entered into a definitive arrangement agreement (the "Arrangement Agreement"), pursuant to which a newly formed portfolio company ("ARCAcquisitionCo") of ARC Energy Fund 8 will acquire all of the issued and outstanding common shares of Boulder ("Boulder Shares") for cash consideration of $2.59 per share (the "Transaction"). ARC Energy Fund 8 is a private equity fund raised and advised by ARC Financial Corp. ("ARC").

The Transaction offers Boulder shareholders full liquidity at a substantial premium to current and recent trading prices. The cash consideration of $2.59 per share represents a 70% premium to the closing price for the Boulder Shares on February 24, 2016 and a 96% premium to the volume-weighted average trading price over the last 30 days on the Toronto Stock Exchange. The Transaction implies a value of approximately $268 million for Boulder after taking into account the assumption of Boulder's net debt of approximately $143 million and estimated transaction costs. The Company's estimated average production for January 2016 was approximately 5,600 boe/d.

The board of directors of Boulder (the "Board") formed a committee of independent directors (the "Special Committee") to, among other things, review and evaluate the terms of the proposal from ARC, review and consider alternatives to the Transaction, including the potential to refinance Boulder's bank debt and, to negotiate the terms and conditions of the Transaction and to make a recommendation to the Board in respect of the Transaction and other related matters.

Cormark Securities Inc., the financial advisor to the Special Committee, has provided its verbal opinion that, subject to the review of the final form of the documents effecting the Transaction, the consideration to be received by holders of Boulder Shares (the "Shareholders") pursuant to the Transaction is fair, from a financial point of view, to such holders (the "Fairness Opinion").

Following an extensive review and analysis of the Transaction and the consideration of other available alternatives, the Fairness Opinion and the recommendations of the Special Committee, the Board, after consulting with its financial and legal advisors, unanimously determined that the consideration to be received by Boulder's Shareholders pursuant to the Transaction is fair to such holders and that the Transaction is in the best interests of Boulder. The Board has approved the terms of the Transaction and unanimously recommends that all Boulder Shareholders vote in favour of the Transaction at the special Shareholders' meeting to be called to consider the Transaction (the "Special Meeting").

All of the members of the Board and officers of Boulder and a large shareholder, who collectively own approximately 24.8% of the outstanding Boulder Shares, have entered into voting support agreements pursuant to which they have agreed to vote their Boulder Shares in favour of the Transaction, subject to the provisions thereof, at the Special Meeting.

Certain members of senior management of Boulder have agreed to roll-over a portion or all of their Boulder Shares into equity in ARC AcquisitionCo (the "Management Participants"). The number of Boulder Shares expected to roll-over is less than 2% of the Boulder Shares outstanding. No change in control or severance payments are being offered or paid to the Management Participants, with existing employment contracts being rolled forward unchanged.

The Plan of Arrangement and Approvals

The Transaction will be carried out by way of plan of arrangement under the Business Corporations Act (Alberta) (the "Plan of Arrangement"). Pursuant to the Plan of Arrangement, each Shareholder, other than the Management Participants, will receive $2.59 in cash in exchange for each Boulder Share held. All currently outstanding stock options to purchase Boulder Shares will either be surrendered immediately prior to the completion of the Transaction for a cash payment equal to $0.01 for each stock option and subsequently cancelled or be terminated pursuant to the Plan of Arrangement.

The Transaction contains customary deal protection provisions which, among other matters, restrict Boulder from soliciting, assisting, initiating, facilitating or encouraging any discussions, negotiations, proposals or offers concerning alternative acquisition proposals. However, the Transaction permits Boulder to respond to unsolicited written acquisition proposals under certain circumstances which include where such acquisition proposal constitutes or could reasonably constitute or lead to a "superior proposal" (as defined in the Arrangement Agreement). ARC AcquisitionCo has the right to match any competing proposal for Boulder in the event a superior proposal is made. Boulder has agreed to pay a termination fee of $8.0 million in certain circumstances including where the Transaction is terminated due to a superior proposal. If, under certain circumstances, ARC AcquisitionCo terminates the Transaction, a reverse break fee of $8.0 million is payable to Boulder. The parties have each agreed to a reciprocal expense reimbursement fee of up to $2.0 million payable to the other if the Transaction is not completed in certain circumstances, and where a termination fee or reverse break fee is not otherwise payable.

The Transaction is subject to customary approvals, including, but not limited to, the approval of at least 66 2/3% of the votes cast in person or by proxy at the Special Meeting, and the approval of a "majority of the minority" of the Shareholders being a majority of the votes cast in person or by proxy at the Special Meeting excluding Shareholders whose votes may not be included in determining if minority approval is obtained pursuant to Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions. Closing of the Transaction is also subject to the satisfaction of a number of conditions customary for transactions of this nature. The Special Meeting is expected to be held on or before April 14, 2016. An information circular in connection with the Transaction is expected to be mailed to Boulder Shareholders by March 16, 2016, with closing of the Transaction expected to occur on or about April 15, 2016.

Following closing of the Transaction, the Boulder Shares will be de-listed from the TSX.

A copy of the Arrangement Agreement will be filed on Boulder's SEDAR profile and will be available for viewing at www.sedar.com.

Advisors

Cormark Securities Inc. is acting as exclusive financial advisor to the Special Committee and DLA Piper (Canada) LLP is acting as legal counsel to Boulder in respect of the Transaction. National Bank Financial and Emerging Equities Inc. acted as strategic advisors to Boulder. Stikeman Elliott LLP is acting as legal counsel to ARC and ARC AcquisitionCo.

About ARC Financial Corp.

ARC Financial Corp. is a Calgary-based, employee-owned, private equity management firm founded in 1989, with an exclusive focus on the Canadian energy industry. ARC is Canada's largest energy focused private equity manager with C$5.3 billion of capital across the eight ARC Energy Funds. ARC's most recent fund, ARC Energy Fund 8, is a fund with over C$1.5 billion of committed capital that started investing in 2015.

Reader Advisory

Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Canadian securities laws. These forward-looking statements contain statements of intent, belief or current expectations of Boulder. Forward-looking information is often, but not always identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook.

The forward-looking statements included in this press release, including statements regarding the Transaction, the receipt of necessary approvals, the shareholder vote, and the anticipated timing for mailing the information circular, holding the Special Meeting of Shareholders of Boulder and completing the Transaction, are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the completion of the Transaction and the anticipated timing for completion of the Transaction, Boulder has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare and mail Special Meeting materials, the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court, shareholder, TSX and other third party approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction. These dates may change for a number of reasons, including unforeseen delays in preparing meeting material; 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 Transaction. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times.

Risks and uncertainties that may cause such differences include but are not limited to: the risk that the Transaction may not be completed on a timely basis, if at all; the conditions to the consummation of the Transaction may not be satisfied; the risk that the Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to the completion of the Transaction, Boulder's business may experience significant disruptions, including loss of customers or employees, due to transaction-related uncertainty or other factors; the possibility that legal proceedings may be instituted against Boulder and/or others relating to the Transaction and the outcome of such proceedings; the possible occurrence of an event, change or other circumstance that could result in termination of the Transaction; risks regarding the failure of ARC AcquisitionCo to obtain the necessary financing to complete the Transaction; risks related to the diversion of management's attention from Boulder's ongoing business operations; risks relating to the failure to obtain necessary shareholder and court approval; risks related to obtaining the requisite consents to the Transaction; other risks inherent in the oil and gas industry. Failure to obtain the requisite approvals, or the failure of the parties to otherwise satisfy the conditions to or complete the Transaction, may result in the Transaction not being completed on the proposed terms, or at all. In addition, if the Transaction is not completed, and Boulder continues as an independent entity, the announcement of the Transaction and the dedication of substantial resources of Boulder to the completion of the Transaction could have a material adverse impact on Boulder's share price, its current business relationships (including with future and prospective employees, customers, distributors, suppliers and partners) and on the current and future operations, financial condition and prospects of Boulder. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Boulder's operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

The forward-looking statements in this press release are made as of the date it was issued and Boulder does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that outcomes implied by forward-looking statements will not be achieved. Boulder cautions readers not to place undue reliance on these statements.

BOE Presentation. References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Boulder Energy Inc.
Martin Cheyne
CEO
(403) 263-9130
Boulder Energy Inc.
Clayton Thatcher
President
(403) 263-6426
www.boulderenergy.ca