DRUMMONDVILLE, QUÉBEC–(Marketwired – Jan. 29, 2018) – NAPEC Inc. (“NAPEC” or the “Company“) (TSX:NPC) announced today that the board of directors of NAPEC (the “Board“) and its special committee (the “Special Committee“) continue to believe that the proposed arrangement (the “Arrangement“) between NAPEC and 9370-0219 Québec Inc. (the “Purchaser“), a company organized by Oaktree Capital Management, L.P. (“Oaktree“), is in the best interests of NAPEC and reaffirm their unanimous recommendation that shareholders and warrantholders of NAPEC vote FOR the Arrangement, pursuant to which funds managed by Oaktree will acquire all of the issued and outstanding common shares of NAPEC (the “Shares“) for .95 in cash per share (the “Consideration“) at the special meeting of shareholders and warrantholders to be held on February 5, 2018. In addition, each holder of common share purchase warrants of NAPEC (the “Warrants“) will receive a cash payment equal to the amount (if any) by which the Consideration exceeds the exercise price of such Warrant.

The Board reiterates that the Arrangement resulting from extensive negotiations between NAPEC and Oaktree is in the best interests of, and is the best alternative for, the Company and its stakeholders. The Arrangement has been reached after a thorough process which included the receipt of a fairness opinion from each of National Bank Financial Inc. and Richter Advisory Group Inc. in respect of the Consideration and a review of NAPEC’s strategic alternatives, including the status quo. Further details regarding the Special Committee’s evaluation process and its negotiations with Oaktree are provided in the “Background to the Arrangement” section of the management information circular dated December 20, 2017 (the “Information Circular“).

In reaching its determination, the Board considered, among other things, the benefits and potential growth for NAPEC that can be derived from the transaction with Oaktree as a result of Oaktree’s financial capabilities and its substantial experience and successful track record in NAPEC’s utility construction and services industry. In addition, Oaktree intends to maintain the current level of employment in Québec following the transaction.

Although the terms and conditions of the Arrangement do not preclude any party from proposing or making an acquisition proposal, NAPEC has not received any proposal or offer from any party since the transaction was announced on December 4, 2017, nor has it been contacted by any party wishing to explore a potential offer.

Support from NAPEC’s Important Shareholders

As indicated in the Information Circular, Fonds de solidarité FTQ (“Fonds“), NAPEC’s largest shareholder having beneficial ownership and control over approximately 19% of the total Shares and Warrants outstanding, has met with NAPEC, the Special Committee and Oaktree on several occasions throughout the process to discuss, among other things, the possibility to participate as a co-investor with Oaktree in the proposed transaction in light of Fonds’ usual investment conditions. Following these discussions, after careful analysis and considering Fonds has been a partner of NAPEC since 2006, Fonds concluded that it did not wish to participate as a co-investor in the Arrangement. Fonds nonetheless expressed to NAPEC and Oaktree, as announced on December 4, 2017, that it intended to vote all of its Shares and Warrants in favor of the Arrangement, subject to its review of the final terms and conditions of the transaction at the time. As of the date hereof, Fonds has informed NAPEC and Oaktree that it continues to intend to vote all of its Shares and Warrants in favor of the Arrangement, as recommended by the Board and the Special Committee in the Information Circular. Fonds has mentioned to NAPEC and Oaktree that the Arrangement is in the best interests of Fonds’ shareholders.

Moreover, all directors and officers of NAPEC owning Shares or Warrants have agreed to vote or cause to be voted their Shares and Warrants in favor of the Arrangement. Such directors and officers collectively beneficially own an aggregate of approximately 1.16% of the issued and outstanding Shares and 1.63% of the outstanding Warrants.

Lastly, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, leading independent proxy advisory firms, have recommended that the shareholders and warrantholders of NAPEC vote in favor of the Arrangement.

Potential Consequences of the Arrangement not Being Approved

Failure to complete the Arrangement for any reason could materially negatively impact the trading price of the Shares, including if the current market price for the Shares reflects a market assumption that the Arrangement will be completed. The Consideration represents a premium of 35.4% to the closing price on December 1, 2017, the last trading day before the announcement, and a premium of 43.9% to the 20-day volume weighted average price on the TSX before the announcement.

In addition, if the Arrangement is not completed for any reason, there are risks that it could have a negative impact on NAPEC’s current and future business relationships which could have a material adverse effect on the current and future operations and financial performance of NAPEC.

Finally, if the Arrangement is not approved by NAPEC’s shareholders and warrantholders, the Purchaser may terminate the Arrangement Agreement and NAPEC will have to pay or cause to be paid to the Purchaser all reasonable expenses of the Purchaser incurred in connection with the transactions contemplated by the Arrangement up to .5 million.

Recent Developments in NAPEC’s Operations

The Board is pleased with the recent announcements regarding contract renewals and awards, as well as the acquisition of the assets of H.T. Sweeney & Son, Inc. Those announcements are the result of discussions and negotiation processes initiated several months ago and are key to the achievement of the Company’s five-year financial plan prepared by management, reviewed by the Board and shared with Oaktree in the process that led to the Arrangement with Oaktree.

Shareholders and warrantholders of NAPEC are encouraged to read the Information Circular, a copy of which is available under the Company’s profile on the SEDAR website (www.sedar.com).

How To Vote

NAPEC shareholders and warrantholders: be sure to vote your proxy before Thursday, February 1, 2018 at 5:00 p.m. (Eastern time). For more information and assistance in voting your proxy, please contact:

Kingsdale Advisors

Toll-free: 1-855-682-4840 (within North America)

Collect: 416-867-2272 (outside of North America)

Email: [email protected]

NAPEC will hold its special meeting of shareholders and warrantholders at the Hotel Omni Mont-Royal, 1050 Sherbrooke Street West, Montreal, Quebec, H3A 2R6. The special meeting will begin at 11:00 a.m. (Eastern Time) on Monday, February 5, 2018.

Overview of the Company

NAPEC is a company operating in the energy sector. The Company is a leading provider of construction and maintenance services to the public utility and heavy industrial markets, mainly in Quebec, Ontario and the eastern United States. NAPEC and its subsidiaries build and maintain utility electrical and natural gas transmission and distribution systems and related energy infrastructure. The Company also installs gas‐powered and electric‐powered heavy equipment for utilities, gas‐fired industrial power plants and petrochemical facilities in North America. The Company also offers environmental construction and road matting services. Additional information on NAPEC can be found in the SEDAR database (www.sedar.com) and on the Company’s website, at www.napec.ca.

About Oaktree

Oaktree is a leader among global investment managers specializing in alternative investments, with US0 billion in assets under management as of September 30, 2017. The firm emphasizes an opportunistic, value‐oriented and risk‐controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Since its inception in 1995, Oaktree’s Power Opportunities strategy has focused exclusively on providing capital to leading companies that provide equipment, services, software and infrastructure used in the electric power and natural gas industries. Headquartered in Los Angeles, Oaktree has over 900 employees and offices in 18 cities worldwide. For additional information, please visit Oaktree’s website at www.oaktreecapital.com.

Kingsdale Advisors

If you have any questions, please contact Kingsdale Advisors at 1-855-682-4840 toll-free in North America, or 416-867-2272 outside North America or by email at [email protected].

Statement on Forward-Looking Information

This press release may contain forward‐looking statements that involve risks and uncertainties. All statements other than statements of historical facts included in this press release, including statements regarding the prospects of the industry and prospects, plans, financial position and business strategy of NAPEC, may constitute forward‐looking statements within the meaning of Canadian securities legislation and regulations. Forward‐looking statements generally can be identified by the use of forward‐looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe” or “continue”, the negatives of these terms, variations of them and similar expressions. More particularly and without restriction, this press release contains forward‐looking statements and information regarding: statements and implications about the anticipated benefits of the proposed transaction for NAPEC, its employees, business partners, shareholders and other stakeholders, including future financial and operating results, plans, objectives, expectations and intentions of Oaktree or NAPEC; and the anticipated timing of the special meeting of shareholders and warrantholders of NAPEC and of the completion of the proposed transaction. In respect of the forward‐looking statements and information concerning the anticipated benefits and timing of the completion of the proposed transaction, NAPEC has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder and warrantholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the transaction; and other expectations and assumptions concerning the proposed transaction. The anticipated dates indicated may change for a number of reasons, including the inability to receive, in a timely manner, the necessary regulatory, court and shareholder and warrantholder approvals, the necessity to extend the time limits for satisfying the other conditions to the completion of the proposed transaction or the ability of the Board of Directors to consider and approve, subject to compliance by the Company of its obligations in this respect under the Arrangement, a superior proposal for the Company. Although NAPEC believes that the expectations reflected in these forward‐looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, that the proposed transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release.
Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward‐looking statements. Risks and uncertainties inherent in the nature of the proposed transaction include, without limitation, the failure of the parties to obtain the necessary shareholder and warrantholder, regulatory and court approvals or to otherwise satisfy the conditions to the completion of the transaction; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; significant transaction costs or unknown liabilities; the ability of the Board of Directors to consider and approve, subject to compliance by the Company of its obligations in this respect under the Arrangement, a superior proposal for the Company; the failure to realize the expected benefits of the transaction; and general economic conditions. Failure to obtain the necessary shareholder and warrantholder, regulatory and court approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the transaction or to complete the transaction, may result in the transaction not being completed on the proposed terms, or at all. In addition, if the transaction is not completed, and NAPEC continues as an independent entity, there are risks that the announcement of the proposed transaction and the dedication of substantial resources of the Company to the completion of the transaction could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Furthermore, the failure of NAPEC to comply with the terms of the Arrangement may, in certain circumstances, result in it being required to pay a fee to Oaktree, the result of which could have a material adverse effect on its financial position and results of operations and its ability to fund growth prospects and current operations. Consequently, the reader is cautioned not to place undue reliance on the forward‐looking statements and information contained in this press release. The forward‐looking statements in this document reflect the Company’s expectations on the date hereof and are subject to change after that date. The Company expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.