Montreal, November 1 2010 –TransForce Inc. (TSX: TFI) announced today that it has entered into an agreement with a syndicate of underwriters led by National Bank Financial Inc. and RBC Dominion Securities Inc. pursuant to which the underwriters have agreed to purchase, on a bought-deal basis, convertible unsecured subordinated debentures of TransForce in an aggregate principal amount of $125 million. The debentures will be offered at a price of $1,000 per debenture by way of short form prospectus in each of the provinces of Canada, as well as in the United States under applicable registration statement exemptions. TransForce intends to use the net proceeds of the offering for general corporate purposes, to support its program of strategic acquisitions and to reduce indebtedness.
The debentures will bear interest at a rate of 6% per annum, payable semi-annually on May 31 and November 30 each year, commencing on May 31, 2011. The debentures will be convertible at the
holder’s option into TransForce common shares at a conversion price of $19.05 per share, representing a conversion rate of 52.49 TransForce shares per $1,000 principal amount of debentures. The debentures will mature on November 30, 2015 and may be redeemed by TransForce, in certain circumstances, after November 30, 2013.
TransForce will grant an over-allotment option to the underwriters of the offering, entitling them to purchase, for a period of 30 days from the closing of the offering, up to $18.75 million principal amount of additional debentures at the offering price of $1,000 per debenture, to cover over-allotments and for market stabilization purposes, if any.
In connection with the debenture offering, TransForce will file a preliminary short form prospectus in all provinces of Canada by November 5, 2010. The prospectus offering is subject to all standard regulatory approvals, including that of the Toronto Stock Exchange, and is expected to close on or about November 19, 2010.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. The debentures being offered, and the common shares issuable upon the conversion or redemption of the debentures, have not been and will not be registered under the U.S. Securities Act of 1933 or state securities laws. Accordingly, the debentures may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration.