Photon Control – Recommended Acquisition by MKS Instruments

PHOTON CONTROL – RECOMMENDED ACQUISITION BY MKS INSTRUMENTS

On May 10, 2021 Photon Control entered into an arrangement agreement with MKS, a global provider of instruments, systems, subsystems and process control solutions based in Andover, Massachusetts, pursuant to which MKS will acquire Photon Control for C$3.60 per common share.

The transaction values Photon Control at approximately C$387 million. The total cash consideration of C$3.60 per share represents a premium of 16% to the closing price of $3.11 on the Toronto Stock Exchange on May 7, 2021, being the last trading day before the announcement of the transaction, and a premium of 26% to the volume weighted average price for the 30 trading days ended May 7, 2021.

The transaction will be carried out by way of a Court-approved plan of arrangement (the “Arrangement”), pursuant to which MKS will acquire all the outstanding common shares of Photon Control. The implementation of the Arrangement will be subject to the approval of at least 66 2/3% of the votes cast by Photon Control securityholders present in person or represented by proxy at the annual and special meeting of Photon Control securityholders, and the receipt of applicable approvals from the Supreme Court of British Columbia.

The arrangement agreement provides for, among other things, customary non-solicitation covenants from Photon Control, including customary “fiduciary out” provisions that allow Photon Control to accept a superior proposal in certain circumstances and a five-business day “right to match period” in favour of MKS. The arrangement agreement also provides for the payment of a termination fee of C$15.5 million by Photon Control to MKS in the event the transaction is terminated in certain specified circumstances, including if MKS does not exercise its right to match in the context of a superior proposal supported by Photon Control. The completion of the Arrangement is not subject to any financing condition. Please note that this is a correction to the statement issued on 10th May 2021 which stated “The Arrangement Agreement also provides for the payment of a termination fee of $15.5 million to Photon Control in the event the Transaction is terminated in certain specified circumstances, including if MKS does not exercise its right to match in the context of a superior proposal supported by Photon Control”. Readers are reminded that a copy of the arrangement agreement entered into with MKS is available under Photon Control’s SEDAR profile at www.sedar.com.

All directors and executive officers of Photon Control, holding approximately 1.0% of the issued and outstanding shares of Photon Control as of the date hereof, have entered into voting and support agreements in favour of MKS pursuant to which, among other things, they have agreed to vote their Photon Control securities in favour of the transaction.

Photon Control’s Board of Directors established a Special Committee of independent directors to oversee the transaction discussions and the Arrangement. The Special Committee has unanimously recommended to the Board of Directors, and the full Board of the Directors unanimously approved, the transaction and the Arrangement, and the Board of Directors passed a resolution to recommend that Photon Control securityholders vote in favour of the transaction.

Echelon Capital Markets, financial advisor to Photon Control, has provided a fairness opinion to the board of directors of Photon Control that, subject to the assumptions, limitations and qualifications set out in such fairness opinion, the consideration to be received by Photon Control shareholders pursuant to the Arrangement is fair from a financial point of view to Photon Control shareholders.

A management information circular relating to the annual and special meeting of securityholders of Photon Control and containing further details regarding the Arrangement and the arrangement agreement will be mailed to Photon Control securityholders and made available on SEDAR under Photon Control’s profile at www.sedar.com.

KEY DATES AND DOCUMENTS

Annual General & Special Meeting Documents:

•   Information Circular & Notice
•   Letter to Securityholders
•   Form of Proxy (Shareholders)
•   Form of Proxy (Optionholders)
•   Virtual AGM User Guide
•   Letter of Transmittal

On July 5, 2021 Photon Control announced that it has obtained a final order from the Supreme Court of British Columbia approving the previously announced plan of arrangement with MKS Instruments, Inc. pursuant to which MKS, through its wholly-owned subsidiary 1302998 B.C. Ltd. will acquire all of the issued and outstanding shares of Photon Control in an all-cash transaction valued at approximately $387 million. It is currently anticipated that the transaction will close on July 15, 2021, subject to the satisfaction and/or waiver of all customary conditions precedent set forth in the arrangement agreement between the Company, MKS and B.C. Ltd. dated May 10, 2021. Upon closing of the Arrangement, shareholders will receive $3.60 per share in cash, without interest and less applicable withholding taxes. Information regarding the procedure for exchange of shares for share consideration is provided in the Company’s management information circular dated May 25, 2021. Following completion of the Arrangement, the shares of the Company will be delisted from the Toronto Stock Exchange. An application has also been made for the Company to cease to be a reporting issuer in the applicable jurisdictions upon completion of the arrangement – News Release

On June 29, 2021 Photon Control announced that its securityholders approved the acquisition of Photon Control by MKS Instruments by way of plan of arrangement at the annual general meeting of Photon Control shareholders and special meeting of securityholders held on June 29, 2021 – News Release

On June 1, 2021 Photon Control announced it had mailed and filed a management information circular and related meeting materials for its Annual General and Special Meeting to be held on June 29, 2021 which will be held virtually. – News Release

May 25, 2021 was the record date for the annual general and special meeting to be held on June 29, 2021. 

On May 14, 2021, Photon Control filed an amended material change report on SEDAR describing the transaction entered into with MKS – PDF

On May 11, 2021, Photon Control filed the full arrangement agreement on SEDAR – PDF

On May 10, 2021 Photon Control entered into an arrangement agreement with MKS, a global provider of instruments, systems, subsystems and process control solutions based in Andover, Massachusetts, pursuant to which MKS will acquire Photon Control for C$3.60 per common share – News Release