Richmond, B.C. - MacDonald, Dettwiler and Associates Ltd. (TSX: MDA), a provider of essential information solutions, announced that it has executed definitive agreements for the sale of its Property Information business, which is principally located in the US and Europe. This business, which provides property information to insurance companies, lenders, and legal professionals, will be acquired by TPG Capital.
MDA expects to realize net cash proceeds of approximately $850 million from the sale after related taxes. The transaction is expected to close early next year, and is subject to the customary regulatory approvals and other approvals and consents typical for this type of transaction.
The Company also announced that the Board of Directors has adopted a dividend policy of $1 per share from operating cash to be paid in two equal installments of $0.50 per share on or about March 31st and September 30th, commencing in 2011.
“Our property information business was built on the strengths of our information solutions competencies” said MDA’s CEO Dan Friedmann. “We determined that this business should operate under separate ownership going forward if we could crystallize good value. This transaction provides an excellent return on the investments we have made in the Property Information business over the past decade.”
MDA is currently reviewing its long-term business strategy and will retain the proceeds from the sale until this process is completed and future cash requirements have been fully evaluated.
Friedmann continued: “Going forward we will leverage our core strengths to further diversify our growing Information Systems and Geospatial Services business into commercial and international markets. As we have done in the past, we will continue to create shareholder value through a combination of organic growth and acquisition initiatives.”
He went on to say: “The new owner of the divested business, TPG Capital, is a leading global private investment firm with extensive experience in the insurance, financial services, real estate, and technology sectors. Our insurance information business in the US already has a significant relationship with one of the complementary businesses owned by TPG. We believe they will provide a good home for our valuable and dedicated employees to successfully execute their growth plans for this business.”
Bryan Taylor, a partner at TPG Capital said: “We are very excited about investing in these high-quality property information businesses. MDA and the respective management teams have done an excellent job growing these companies. This investment fits very well within our broader data services portfolio, and we look forward to working with management in the US, Europe, and Canada to continue growing these businesses.”
BofA Merrill Lynch acted as the lead financial advisor to MDA in connection with the transaction. In addition, BMO Capital Markets was retained to provide financial advice and a fairness opinion to the Board of Directors.
The transaction has fully committed financing, consisting of a combination of equity to be invested by TPG Capital and debt financing to be provided by certain affiliates of Bank of America Merrill Lynch, RBC Capital Markets and Highbridge Mezzanine Partners.
Conference Call Today
MDA President and CEO Daniel Friedmann and Executive Vice President and CFO Anil Wirasekara will be available on a Conference Call today, November 5, 2010 at 10:00 a.m. Pacific (1:00 p.m. Eastern) to answer questions.
To participate, dial:
1-888-231-8191 - Canada or the United States
1-647-427-7450 - International
A PRO-FORMA financial summary will be discussed at the conference call; it can be viewed by clicking on the box labeled “PRO-FORMA” using the following link: http://www.mdacorporation.com/corporate/investor/
MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance of business and government organizations worldwide.
Focused on markets and customers with strong repeat business potential, MDA delivers a broad spectrum of information solutions, ranging from complex operational systems, to tailored information services, to electronic information products.
The Company's common shares trade on the Toronto Stock Exchange under the symbol TSX:MDA.
About TPG Capital
TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with more than $47 billion of assets under management. The firm's investment philosophy has been to create value by investing in change - change created by industry trends, economic cycles or specific company circumstances. TPG provides creative capital, structured for each investment opportunity and offers its wealth of experience, industry expertise, deep operating skill sets and large global network of affiliated partners as a vital resource from which management can draw strategic, financial and operational guidance. TPG invests in companies across a broad range of industries and geographies. Its goal is to help management teams build long-term value that benefits all stakeholders.
Forward Looking Statements:
This press release and related conference call may contain certain forward-looking statements and information, which reflect the current view of MacDonald, Dettwiler and Associates Ltd. (“MDA”) with respect to entering into a definitive agreement to sell its information products business. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology. Any such forward-looking statements are based on MDA's current expectations, estimates, projections and assumptions made in light of its experience and its perception of historical trends. The factors and assumptions underlying the forward-looking statements in this press release and related conference call include all contractual obligations being satisfied or waived. Any such forward-looking statements are subject to risks and uncertainties and MDA’s actual results of operations could differ materially from historical results or current expectations. The risks that could cause actual results to differ from current expectations include general economic and regulatory changes; detrimental reliance on third parties; and failure of counterparties in financing arrangements.
For additional information with respect to certain of these risks or factors, plus additional risks or factors, you are referred to the risk factors described in MDA's most recent annual Management's Discussion and Analysis, Annual Information Form and other documents on file with the Canadian securities regulatory authorities, available online at www.sedar.com or www.mdacorporation.com. The forward-looking statements and information contained in this press release and related conference call represent MDA’s views only as of today’s date. MDA disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law, rule or regulation. You should not place undue reliance on forward-looking statements.
The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release.