TORONTO, Nov. 10 /PRNewswire-FirstCall/ - The Westaim Corporation (TSX: WED) today announced the execution of an amalgamation agreement with NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Under the agreement, NUCRYST will amalgamate with a newly-formed, wholly-owned subsidiary of Westaim (the "Amalgamation"). Under the terms of the Amalgamation, each holder of NUCRYST common shares (other than Westaim) will receive one redeemable preferred share in the capital of the amalgamated company, which will be redeemed for US$1.77 in cash upon completion of the Amalgamation. Pursuant to the Amalgamation, Westaim will receive all of the common shares of the amalgamated company.
The Amalgamation follows the execution of a definitive agreement between NUCRYST and subsidiaries of Smith & Nephew plc. (LSE: SN; NYSE: SNN) under which NUCRYST has agreed to sell all of its operations and assets including all rights to its proprietary nanocrystalline silver technology to Smith & Nephew for cash considerations of US$21 million, plus the value of working capital, and subject to certain adjustments (the "Sale Transaction"). The closing of the Sale Transaction is subject to customary conditions including the approval of NUCRYST shareholders. In this regard, Westaim has entered into an agreement with Smith & Nephew under which it has agreed to vote its shares in NUCRYST in favour of the Sale Transaction, subject to certain limited exceptions applicable where a financially superior proposal has been made.
The completion of the Amalgamation is subject to certain conditions including the closing of the Sale Transaction and the approval of NUCRYST shareholders including the approval by a simple majority of the votes cast by NUCRYST shareholders other than Westaim and the directors and officers of NUCRYST. The Sale Transaction and the Amalgamation will be submitted to the shareholders of NUCRYST for consideration at a special meeting to be called for such purpose. Details regarding the Smith & Nephew Sale Transaction and the Amalgamation agreement will be included in NUCRYST's management information circular which is expected to be mailed to shareholders in late November, 2009 for a shareholders meeting to be held in December, 2009.
"We believe that the amalgamation of Westaim and NUCRYST is in the best interest of the shareholders in both companies," said Cameron MacDonald, President & CEO of Westaim. "This transaction will strengthen Westaim's cash position as we review opportunities to deploy our capital and maximize the value of our assets."
Following the completion of the Amalgamation, NUCRYST intends to delist from the TSX and NASDAQ stock exchanges.
About The Westaim Corporation
The Westaim Corporation invests, directly and indirectly, through acquisitions, joint ventures and other arrangements, with the objective of providing its shareholders with capital appreciation and real wealth preservation. Westaim holds an approximate 75 per cent interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Westaim's common shares are listed on The Toronto Stock Exchange under the trading symbol WED.
About NUCRYST Pharmaceuticals Corp.
NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS) develops, manufactures and commercializes medical products that fight infection and inflammation using SILCRYST(TM), its patented atomically disordered nanocrystalline silver technology. NUCRYST licensed world-wide rights for SILCRYST(TM) wound care coating products to Smith & Nephew plc, which markets these products in over 30 countries under their Acticoat(TM) trademark. NUCRYST has developed its proprietary nanocrystalline silver in a powder form, referred to as NPI 32101, for use in medical devices and as an active pharmaceutical ingredient.
Certain portions of this press release as well as other public statements by Westaim, contain forward-looking statements. Such forward-looking statements include but are not limited to statements concerning the transactions described herein; investment strategies and expected rates of return; strategic alternatives to maximize value for shareholders; commercialization strategies; capital expenditures; statements regarding earnings from Nucryst's wound care products; projections regarding Nucryst's manufacturing cost reimbursement revenues; statements regarding expected Nucryst cost savings and the use or consequence of any such savings; statements relating to the sufficiency of cash and cash equivalents to fund the activities and operations of Nucryst or Westaim; restructuring costs, corporate costs, capital expenditures and capital commitments; statements regarding ABCP generally, including without limitation in respect of replacement notes and their rating and value, the value and liquidity of Westaim's ABCP holdings; the likely effect of changes in internal control over financial reporting; and the impact of changes in significant accounting policies on Westaim's consolidated financial statements. These statements are based on current expectations that are subject to risks, uncertainties and assumptions and Westaim can give no assurance that these expectations are correct. Westaim's actual results could differ materially from those anticipated by forward-looking statements for various reasons generally beyond our control, including but not limited to: (i) failure to complete one or both of the transactions described herein; (ii) changes in market conditions or deterioration in underlying investments; (iii) general economic, market, financing, regulatory and industry developments and conditions; (iv) cost estimates based upon assumptions which may prove to be unrealistic; (v) delays or problems in receiving regulatory approvals for Nucryst's products; (vi) the degree to which Smith & Nephew plc succeeds in selling Acticoat(TM) products; (vii) unexpected obstacles or complexities associated with Nucryst's technology, manufacturing processes and new applications; (viii) patent and technical hurdles which might inhibit or delay the ability of Nucryst to develop or commercialize technologies or products; and (ix) other risk factors set forth in Westaim's Annual Report or Annual Information Form. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.
SOURCE Westaim Corporation