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Private equity firm eyes Canadian manufacturer for $45 million

By: Catherine Kavanaugh

November 20, 2013

Private investment firm Clearview Capital LLC is getting close to acquiring Novik Inc., a Quebec City-based manufacturer of polymer exterior siding, roof coverings and accessories, for about $45 million.

Novik officials announced Nov. 18 that they signed a non-binding letter of intent with the Connecticut-based firm, which has a track record of investing in and developing mid-sized North American companies through partnerships with management.

Novik sells building products to the residential and commercial construction industry. Clearview co-managing partner James G. Anderson sees potential for growth in Canada and the United States.

“Our goal is to partner with Novik’s talented management team to invest in continued expansion in Quebec and in further penetration of the United States market,” Anderson said in a statement. “We strongly believe that our access to capital and extensive experience and relationships at all levels of the building products industry will allow us to accelerate the company’s growth for the benefit of all the company’s stakeholders.”

Clearview plans to acquire all of the issued and outstanding shares of Novik. The firm proposed a cash consideration of 85 cents per share and the assumption of certain debt. The parties have 20 business days to negotiate an agreement with an option to extend the period of exclusivity period by 10 days. Before the transaction closes, it will be subject to court and shareholder approvals.

In the meantime, Novik’s Board of Directors can still consider unsolicited “superior” proposals but Clearview has the right to match the offers. If the letter of intent is terminated, Novik must pay Clearview $1.8 million.

Michael Gaudreau, Novik’s CEO and board chairman, also signed an irrevocable lock-up agreement with Clearview and has stated he will vote to approve the transaction and vote against any alternative acquisition proposals.

Gaudreau is a major shareholder who maintains the acquisition by Clearview will benefit all parties, including Novik employees and customers. He pointed out that a special committee comprised of the board’s three independent directors and the company’s financial advisors “considered many potential alternatives” before announcing about the pending acquisition.