Polaris Materials
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Polaris Announces Friendly Acquisition by Vulcan Materials Company

August 28, 2017

VANCOUVER, British Columbia - Polaris Materials Corporation (TSX:PLS) (the “Company” or “Polaris”), today announced that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Vulcan Materials Company (NYSE:VMC) ("Vulcan"), pursuant to which Vulcan, through an indirect subsidiary, will acquire all of the issued and outstanding shares of Polaris for C$2.79 per share in cash by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). The price per share implies an aggregate fully diluted equity value for Polaris of approximately C$252 million.

Transaction Highlights

  • The cash purchase price represents a 191% premium to Polaris' closing share price of C$0.96 on August 25, 2017 and a 194% premium to the volume weighted average price of Polaris’ shares over the last 10 trading days.
  • Polaris' Board of Directors formed a special committee (the "Special Committee"), consisting of the Company’s independent directors, to supervise the process undertaken and negotiate and review the transaction. The Special Committee and the Board of Directors have unanimously recommended that shareholders, optionholders and deferred unit holders of Polaris (collectively, the “Affected Securityholders”) vote in favour of the transaction.
  • Polaris is permitted to terminate the Arrangement Agreement in certain circumstances, including to allow the Board of Directors to accept a superior proposal subject to certain conditions, including Vulcan's "right to match" and the payment of a termination fee of C$10 million.
  • • Completion of the Arrangement is subject to customary closing conditions, including approval of Affected Securityholders and court approval, and is expected to close in November 2017.

"With Polaris celebrating its 10 year anniversary of operations at the Orca quarry this year, we recognize our First Nations partners, employees, customers, service providers and other stakeholders as instrumental in creating this exceptional construction materials company. The unique strategic merits of our Company have been recognized by Vulcan, and this transaction provides significant value to Polaris shareholders today, while positioning our business to provide long term benefits to our partners and opportunities for growth in the future," said Ken Palko, President and CEO of Polaris.

"The Special Committee and the Board of Directors of Polaris is pleased to provide its recommendation to support the agreement with Vulcan, and following a rigorous process of evaluating alternatives believe that this transaction is the best avenue to unlock the underlying value that has been created by the hard work of the Polaris team," said Terry Lyons, Chairman of the Board of Directors of Polaris.

Arrangement Details

The transaction will be implemented by way of the Arrangement under the Business Corporations Act (British Columbia). The implementation of the Arrangement will be subject to approval by securityholders of Polaris at a special meeting (the "Special Meeting"), which is expected to be held in early November, 2017. The Arrangement will require the approval at the Special Meeting of 66 2/3% of all votes cast by shareholders of Polaris, 66 2/3% of all votes cast by the Affected Securityholders voting as a single class and a majority of all votes cast by the shareholders of Polaris after excluding votes of the Purchaser and any other persons whose votes must be excluded in accordance with Multilateral Instrument 61-101. The Arrangement is also subject to the approval of the British Columbia Supreme Court and certain closing conditions customary for a transaction of this nature. The approval of shareholders of Vulcan is not required in connection with the Arrangement. The Arrangement will be financed with cash and is not subject to any financing contingency.

The Arrangement has been reviewed by the Special Committee of Polaris and has been unanimously approved by the Board of Directors of Polaris following the unanimous recommendation of the Special Committee. The Board of Directors has also unanimously determined that the transaction is fair to its shareholders and the Affected Securityholders, and that it is in the best interests of Polaris and unanimously recommends that the Affected Securityholders vote in favour of the transaction. The Special Committee has received a fairness opinion from Fort Capital Partners (“Fort Capital”) to the effect that the consideration payable under the Arrangement Agreement is fair, from a financial point of view, to the shareholders of Polaris. The Board of Directors has received a fairness opinion from Canaccord Genuity Corp. ("Canaccord Genuity") to the effect that the consideration payable under the Arrangement Agreement is fair, from a financial point of view, to the shareholders of Polaris. The directors and officers of Polaris have entered into voting agreements whereby they have agreed to, among other things, vote their securities in favour of the Arrangement.


The Board of Directors retained Canaccord Genuity as its exclusive financial advisor. Fasken Martineau DuMoulin LLP is acting as legal counsel to the Company, Osler, Hoskin & Harcourt LLP is acting as legal counsel to the Special Committee and Dorsey & Whitney LLP is acting as legal counsel to the Company on US matters. Wachtell, Lipton, Rosen & Katz LLP is acting as legal counsel to Vulcan and McInnes Cooper and Blake, Cassels & Graydon LLP are acting as legal counsel to Vulcan on Canadian matters.

Additional Information About the Proposed Arrangement

Copies of the fairness opinions put forth by Fort Capital and Canaccord Genuity, and a description of the various factors considered by the Board of Directors of the Company in its determination to approve the transaction and recommend that Affected Securityholders approve the transaction, as well as other relevant background information, will be included in the management information circular to be sent to the Affected Securityholders in advance of the Special Meeting. The management information circular, the Arrangement Agreement, and certain related documents will be filed with the Canadian securities regulators and will be available on SEDAR at www.sedar.com.

Conference Call and Webcast Details

The Company will host a conference call on Monday, August 28, 2017 at 4:30pm Eastern time (1:30pm Pacific time). Details to access the call live are as follows:

  • Via telephone, toll free, by calling 1-888-231-8191 in North America or 1-647-427-7450 internationally.
  • Via webcast at: https://goo.gl/hQgSNd

The webcast will be archived for 90 days following the call at the above-noted link. The conference call will also be recorded and available for replay until Monday, August 28, 2017. To access the replay, dial 1-855-859-2056 or 1-416-849-0833 and use Playback Passcode 77425509# to hear the recording.

About Polaris Materials Corporation:

Polaris Materials Corporation is engaged in the development and operation of construction aggregate quarries in Canada to supply distribution facilities in the United States through coastal shipping. The Company's active construction aggregate interests consist of its Orca Sand and Gravel Quarry in British Columbia and two associated receiving terminals in Richmond and Long Beach, California. The Company also owns the Black Bear Project located in close proximity to the Orca Quarry, and a controlling interest in the Eagle Rock Quarry Project, located on the south coast of Vancouver Island.

About Vulcan Materials Company:

Vulcan Materials Company, a member of the S&P 500 index with headquarters in Birmingham, Alabama, is the United States' largest producer of construction aggregates, including crushed stone, sand and gravel, and a major producer of other construction materials. For additional information about Vulcan, go to www.vulcanmaterials.com

For further information, please contact:

Ken Palko
President and CEO
Polaris Materials Corporation
Tel: (604) 915-5000 Ext. 103

Nicholas Van Dyk
Vice President, Investor Relations and Corporate Development
Polaris Materials Corporation
Tel: (604) 915-5000 Ext. 104

Cautionary Note Regarding Forward Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. These statements and information appear in this document and include estimates, forecasts, information and statements as to management's expectations with respect to, among other things, the completion of the Arrangement, receipt of all approvals, including from the British Columbia Supreme Court, necessary to complete the Arrangement, any superior proposals, and the holding of the Special Meeting. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", and "scheduled" or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's continuous disclosure documents which are filed with Canadian regulators on SEDAR (www.sedar.com), including in the circular to be sent to the Company's securityholders in advance of the Special Meeting, under the heading “Risks and Uncertainties” and under the heading “Risk Factors” in the Company’s Annual Information Form. Such factors include, amongst others, the receipt of all necessary approvals to complete the Arrangement, the timing of the Special Meeting, and the receipt of any superior approvals. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, except as required by applicable law. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.