HALIFAX, Jan. 6, 2014 /CNW/ - Clarke Inc. ("Clarke") (TSX: CKI, CKI.DB.A) is pleased to announce the close of the sale of its truckload, less-than-truckload and freight logistics businesses (the "Freight Transport Business") to Transforce Inc. ("Transforce") as previously announced on October 31, 2013. Clarke received total net sales proceeds of approximately $100.5 million. Clarke estimates that it will recognize a gain on the sale of $63-$68 million, which will be reflected in Clarke's financial statements for the first quarter ended March 31, 2014. This will result in an increase in book value of over $3.55/share.
George Armoyan, Chief Executive Officer of Clarke, stated: "The value of many of Clarke's assets is not properly reflected in our book value or share price and this sale shows that we remain committed to engaging in transactions that unlock this value. In the last few months, we have exited several investments generating significant cash proceeds and realized gains. These transactions will also make our financial statements less complex and easier for investors to understand. We look forward to continuing to generate positive investment results and increasing Clarke's intrinsic value."
Following the close of this transaction, Clarke continues to own its Commercial Tanks and Home Heating segment, its Investment segment and the ferry and container shipping units within its current Freight Transportation segment.
Clarke has approximately $65 million of cash on hand as well as approximately $130 million of marketable securities. Clarke also has $40 million in availability through its existing credit facilities. Clarke will review how to best use the proceeds received from the transaction, which may include general corporate purposes, redeeming all or part of Clarke's convertible unsecured debentures, or funding a special dividend to shareholders in addition to funding existing or new investment opportunities.
Clarke also announces the outcome of the proposed amendments to the terms of its 6.00% convertible unsecured subordinated debentures due December 31, 2018 ("Debentures"). While a majority of the Debentureholders voted in favour of amending the terms of the Debentures, there was not the sufficient two-thirds support required by the terms of the Debentures. Therefore, Clarke has decided to cancel the meeting that was scheduled to be held on January 10, 2014.
Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance performance and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for more information about Clarke, please visit our website at www.clarkeinc.com.
This press release may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke, the use of the proceeds of the transaction and the estimated gain and the increase in book value per share as a result of the transaction. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. These forward-looking statements include, but are not limited to, statements regarding the trading price of the Company's securities not fully reflecting the value of the Company's business, the estimated gain from the transaction and the increase in book value per share as a result of the transaction.
Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Clarke to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, and interest rates and foreign currency fluctuations. Although Clarke has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Clarke does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE Clarke Inc.