Nordion enters into definitive agreement to be acquired by Sterigenics

Nordion Inc. (TSX:NDN) (NYSE:NDZ), a leading provider of products and services to the global health science market, announced that it has entered into a definitive agreement (the "Arrangement Agreement") to be acquired by Sterigenics, a global leader in sterilization services and a portfolio company of GTCR LLC, a leading private equity firm based in Chicago, Illinois, USA. Pursuant to this Arrangement Agreement, shareholders will receive an aggregate cash consideration of US$11.75 per share (collectively, the "Consideration"). Upon closing of this transaction, Nordion will operate as a standalone company within Sterigenics and will continue to operate under the Nordion name.

The total transaction is valued at approximately US$727 million and will be funded using a combination of new debt facilities and equity financing, both of which are fully committed, Sterigenics's cash on hand, and a portion of Nordion's cash on hand. The Consideration represents a premium of approximately 12% to the closing price of US$10.48 per share on the NYSE on March 27, 2014 and a premium of approximately 24% over the 90-day volume weighted average price of US$9.47 per share on the NYSE. Adjusting for the Company's fiscal Q1 2014 reported cash and cash equivalents balance of US$319.5 million or US$5.16 per share, the cash adjusted premium to the 90-day volume weighted average price on the NYSE is approximately 53%.

"This transaction delivers value to our shareholders and is a good strategic fit for Nordion", said Steve West, Chief Executive Officer of Nordion. "We believe this partnership is beneficial to Nordion's employees and our customers, as Nordion and Sterigenics combine their global expertise, industry knowledge and the same focus on high quality standards and values. This transaction also marks the successful completion of Nordion's strategic review."

Sterigenics, a global leader in sterilization services headquartered in Deerfield, Illinois, USA, offers technology in all major sterilization modalities.

"Nordion is a recognized global leader in the medical isotopes and sterilization sectors, sharing a similar mission to improve global public health," said Michael Mulhern, Chief Executive Officer, Sterigenics. "Through this acquisition, our focus is to ensure a stable long-term source of Cobalt-60 that will maintain customer confidence in the future availability and growth of gamma sterilization as one of many sterilization options. In the short term, Nordion customers should expect business as usual. Over the long run, we look forward to working with existing and new reactor partners to create a larger and more reliable supply of Cobalt-60 for the future."

The Board of Directors of Nordion, acting on the unanimous recommendation of the Special Committee comprised solely of independent directors, has unanimously approved the transaction and recommends that Nordion shareholders vote in favour of the transaction.

"Nordion's Board of Directors fully and unanimously supports this transaction", said Bill Anderson, Chairman of the Board of Nordion. "The Management team, with direction from the Special Committee, undertook a comprehensive process to reach an outcome that the Board agrees delivers significant value to our shareholders and serves the best interest of our employees, customers and business."

Transaction Details
The Arrangement Agreement between Nordion and Sterigenics provides for a non-solicitation covenant on the part of Nordion, subject to customary "fiduciary out" provisions. A termination fee of US$12 million would be payable to Sterigenics in certain circumstances, including if it fails to exercise its right to match in the context of a superior proposal supported by Nordion, and a reverse break fee of US$24 million would be payable by Sterigenics to Nordion if the transaction is not completed in certain circumstances.

The transaction will be implemented by way of a plan of arrangement under the Canada Business Corporations Act and is subject to court approval and the approval of Nordion's shareholders. Implementation of the arrangement will be subject to the approval of 66^2/3% of the votes cast by shareholders present in person or by proxy at the special meeting of shareholders of Nordion.

The transaction is also subject to certain closing conditions, including receipt of all regulatory approvals, such as under competition/antitrust laws and the Investment Canada Act, and the coming into force of certain amendments to the Nordion and Theratronics Divestiture Authorization Act (the "Nordion Act") as described below. In addition, the transaction is effectively conditional upon the Company having at closing US$300 million of available cash on hand to complete the steps of the transaction. As of the date hereof, the Company has approximately US$330 million of cash and cash equivalents. The balance of the transaction is being financed through Sterigenics's (or affiliates or related companies) debt and equity financing and excess cash on its balance sheet. The transaction is not subject to any financing condition and is expected to close in the second half of calendar 2014.

The proposed legislative amendments to the Nordion Act were included in the most recent Budget Implementation Act, which was introduced to the House of Commons on March 28, 2014. In accordance with such proposed amendments, the foreign-ownership restrictions applicable to the Company will no longer apply to a change of control transaction with a "non-resident" (as defined in the Nordion Act) if such a transaction is approved under the Investment Canada Act. As noted above, the coming into force of the proposed amendments, as well as approval under the Investment Canada Act, among other things, is necessary to permit Sterigenics to acquire all the shares of Nordion.

Information Circular and Shareholders Meeting
A management information circular will be prepared and mailed to shareholders over the coming weeks providing shareholders with important information about the transaction. Nordion is required to hold a special shareholder meeting within 60 days of the date hereof. Details of the transaction as well as the rationale for the Board of Directors' support of the transaction will be set out in the information circular. A copy of the opinion received by the Board of Directors regarding the Consideration payable in the transaction from a financial perspective will also be included in the information circular.

Nordion intends to make an application to the Commercial List of the Superior Court of Justice in Toronto, Ontario on or about March 31, 2014 for an order extending the time for calling and holding of the annual general meeting (the "AGM") currently scheduled to take place on April 29, 2014, such that the AGM would be held concurrently with the special meeting of shareholders to consider the transaction. Nordion will update and provide further details in respect of that matter in an upcoming news release.