Samuel Manu-Tech Inc. Announces Going Private Transaction

TORONTO, July 26 /PRNewswire-FirstCall/ - Samuel Manu-Tech Inc. ("SMT") (TSX:SMT) announced today that it has entered into a definitive agreement with its controlling shareholder, Samuel, Son & Co., Limited ("Samuel") which provides for a proposed transaction in which Samuel would effectively acquire all of the outstanding common shares in the capital of SMT that Samuel does not already own for $7.50 CDN cash per common share. This proposal values SMT's minority held shares at approximately $68 million CDN. Samuel currently owns 23,079,360 SMT common shares (or 71.8% of the outstanding SMT common shares) and intends to fund the acquisition through its existing cash resources and by funds drawn down on an existing credit facility.

The cash consideration of $7.50 per SMT common share represents a premium of 76.9% over the $4.24 closing price of the SMT common shares on the TSX on July 23, 2010, the last closing price prior to the date of this announcement, and a premium of 81.6% over the $4.13 20-day volume weighted average trading price of the SMT common shares on the TSX as at July 23, 2010.

The proposed transaction is to be structured as an amalgamation of a wholly-owned subsidiary of Samuel ("Subco") with SMT under the laws of the Province of Ontario. Upon the completion of the amalgamation, shareholders of SMT (other than Subco) will receive one redeemable preferred share of Subco for each common share of SMT. Each redeemable preferred share would be immediately redeemed for $7.50 CDN in cash. Following the amalgamation, SMT would be a wholly-owned subsidiary of Samuel.

Pursuant to Multilateral Instrument 61-101 ("MI 61-101"), the proposed transaction is a "business combination" and is subject to compliance with MI 61-101, including the requirement to obtain a formal valuation of the SMT common shares and "minority approval". The SMT Board of Directors established a committee of independent directors (the "Independent Committee") to, among other things, supervise the preparation of a formal valuation and negotiate the terms of the proposed transaction as reflected in the definitive agreement governing the proposed transaction.

The Independent Committee retained CIBC World Markets Inc. ("CIBC") as its independent financial advisor for the purpose of providing a valuation of the SMT common shares in accordance with MI 61-101. CIBC has delivered its valuation to the Independent Committee, which concludes that, subject to the assumptions and qualifications set forth in the valuation, the fair market value of the SMT common shares is in the range of $6.75 CDN to $8.10 CDN per share. CIBC has also delivered an opinion to the Independent Committee, which states that, subject to the assumptions, limitations and qualifications contained therein, the consideration offered by Samuel pursuant to the proposed transaction is fair, from a financial point of view, to the shareholders of SMT, other than Samuel and its related parties.

Having received the formal valuation and fairness opinion prepared by CIBC, the Independent Committee, after consultation with its financial and legal advisors, determined unanimously that the proposed transaction is in the best interests of SMT and is fair to the SMT shareholders (excluding Samuel and its related parties) and unanimously recommended that the Board of Directors approve the definitive agreement in respect of the proposed transaction and recommend to the SMT shareholders (excluding Samuel and its related parties) that they vote their SMT common shares in favour of the special resolution to approve the proposed transaction.

The Board of Directors of SMT, having considered, among other things, the unanimous recommendation of the Independent Committee, has unanimously approved entering into the definitive agreement (the representatives of Samuel, Subco and other conflicted parties on the Board of Directors having abstained from voting) and recommends to the SMT shareholders (excluding Samuel and its related parties) that they vote their SMT common shares in favour of the special resolution to approve the proposed amalgamation.

Completion of the proposed amalgamation is subject to certain conditions, including approval by (i) at least 66 2/3% of the votes cast by all SMT shareholders voting in person or by proxy at a special shareholders' meeting, and (ii) in accordance with MI 61-101, at least a simple majority of the votes cast by minority SMT shareholders (excluding shares held by Samuel and certain related parties pursuant to the minority voting requirements of MI 61-101) voting in person or by proxy at a special shareholders' meeting (the "Majority of the Minority Vote"). The definitive agreement between SMT, Subco and Samuel governing the transaction contains customary representations, warranties and covenants for a transaction of this nature. In addition, certain arm's-length shareholders (the "Supporting Shareholders") have entered into lock-up agreements with Samuel pursuant to which they and Samuel have each irrevocably agreed to vote all their SMT common shares in favour of the transaction. The Supporting Shareholders hold, in aggregate, 3,147,640 SMT common shares, representing approximately 9.8% of the outstanding SMT common shares and, at a minimum, 34.7% of all SMT common shares eligible to be voted in the Majority of the Minority Vote. The transaction is also subject to the receipt of certain third party consents from lenders pursuant to the contractual provisions in the outstanding credit facilities of Samuel and SMT.

A management information circular will be prepared and mailed for a special meeting of SMT shareholders that is expected to be held in September 2010. The Board of Directors of SMT has established August 4, 2010 as the record date for determining shareholders entitled to vote at the special meeting. The management information circular to be sent to SMT shareholders will include full details of the terms of the transaction, the recommendation to shareholders by the Board of Directors of SMT and the Independent Committee, including detailed reasons for the recommendation, as well as a copy of the CIBC formal valuation and fairness opinion.

BMO Capital Markets is acting as exclusive financial advisor to Samuel in the context of this transaction.

About Samuel Manu-Tech, Inc.

Samuel Manu-Tech Inc. (SMT-TSX) is a leading North American industrial products and technology company producing and distributing a wide range of steel, plastic and related industrial products and services from locations in Canada, United States and Mexico.

About Samuel, Son & Co., Limited

Samuel, Son & Co. Limited is the fifth largest metal service centre and the largest privately held metal service centre in North America, with locations across both Canada and the United States, as well as locations in Mexico, the United Kingdom, Australia and China.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements relating to the acquisition by Samuel, Son & Co., Limited ("Samuel") of the common shares of Samuel Manu-Tech Inc. ("SMT") that Samuel does not already own, including statements regarding the completion of the proposed transaction and other statements that are not historical facts. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "plan" and similar expressions of future or conditional verbs such as "will," "may," "should," "could," or "would." Such forward-looking statements are subject to important risks and uncertainties including, without limitation, required SMT shareholder approval, receipt of necessary third party consents, receipt of necessary financing, and the satisfaction or waiver of certain other conditions contemplated by the definitive agreement. As a result of these risks and uncertainties, the proposed transaction could be modified, restructured, postponed to a later date or not be completed at all, and the results or events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties. Except as required by law, SMT does not assume and expressly renounces any obligation to update any of these forward-looking statements, which are only applicable on the date on which they were made. Additionally, SMT undertakes no obligation to comment on expectations of, or statements made by third parties in respect of the proposed transaction.

SOURCE Samuel Manu-Tech Inc.