Flowserve intends to terminate the Arrangement Agreement as Regulatory Approval from France will not be obtained
MONTREAL, Oct. 05, 2023 (GLOBE NEWSWIRE) -- Velan Inc. (“Velan”) (TSX: VLN) today announces, in connection with the arrangement agreement made as of February 9, 2023, among Velan, 14714750 Canada Inc. (“Purchaser”) and Flowserve US Inc. (“Parent” and, together with Purchaser, “Flowserve”), as amended by the first amendment to the arrangement agreement dated March 27, 2023 (the “Arrangement Agreement”), that it has been informed by Flowserve of its intent to, following the occurrence of the Outside Date on October 7, 2023, and in accordance with the terms of the Arrangement Agreement, send a notice to Velan to terminate the Arrangement Agreement, considering that the Regulatory Approval (as such term is defined in the Arrangement Agreement) from France has not and will not be obtained.
As previously disclosed, the conclusion of the transactions set out in the Arrangement Agreement was conditional on the Regulatory Approvals, including one from France. In order to meet that key condition, Flowserve offered a package of remedies and undertakings to the French Authorities. The French Authorities have now informed the parties that they will not provide the requisite Regulatory Approval for the sale to Flowserve regardless of such remedies or otherwise. Flowserve has consequently informed Velan of its intention to terminate the Arrangement Agreement following the Outside Date. According to the terms of the Arrangement Agreement, no termination fee will be payable by either party.
Velan will resume operations as an independent business, free of the covenants and other restrictions of the Arrangement Agreement.
“We thank our employees and other stakeholders who supported the proposed transaction. Although we are disappointed with the outcome and the decision of the French regulators, we remain confident in the future of Velan’s business. We will now turn our entire focus to the operation of a successful business while continuing to assess all strategic options available to the Company to create value for all of our stakeholders,” said Mr. James Mannebach, Chair of the Board of Directors of Velan.
About Velan Inc.
Founded in Montreal in 1950, Velan Inc. is one of the world’s leading manufacturers of industrial valves. Velan Inc. is a family-controlled public company, employing approximately 1,650 people with manufacturing facilities in 9 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.
Caution Regarding Forward-Looking Statements
Certain statements made in this news release may constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to the future plans of Velan and other statements that are not material facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.
The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties are disclosed in the Company’s filings with the appropriate securities commissions. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
Readers are cautioned not to place undue reliance on the forward-looking statements and information contained in this news release. All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.
Velan Contact:
Rishi Sharma, Chief Financial Officer
+ 1 438 817 4430
