VANCOUVER, British Columbia--(BUSINESS WIRE)--Serebra Learning Corporation (“Serebra”) (TSX-V: SLC) (Pink Sheets: SLCFF) is pleased to announce that it has entered into a definitive business combination agreement with Blue Drop Inc. (“Blue Drop”) and Rizbollo Holdings Limited (“Rizbollo”), which provides the terms pursuant to which Serebra and Blue Drop will combine their businesses and assets. Upon completion, the transaction will constitute a reverse take-over of Serebra by Blue Drop, with the resulting company to be renamed Bluedrop Performance Learning Inc.
Taleeb Noormohamed, President and CEO of Serebra stated “The signing of the definitive agreement with Blue Drop Inc. represents a significant step forward for Serebra and its shareholders. The business combination with Blue Drop represents an opportunity to advance Serebra’s online learning business to a new level and represents the creation of a truly national e-learning company. It is a game-changer for Serebra and its shareholders.”
Summary of the Transaction
The business combination is to occur by way of a statutory amalgamation whereby Blue Drop will amalgamate with a wholly owned subsidiary of Serebra, with the amalgamated company being wholly owned by Serebra. In connection with the amalgamation, Serebra will issue post-consolidated common shares to shareholders of Blue Drop which will on closing represent 87.756% of the resulting company’s total issued and outstanding shares. The percentage of the resulting company’s shares to be issued to the Blue Drop shareholders may be adjusted on the closing date to account for changes in Serebra’s working capital on the basis of a 0.00934% increase in the percentage for each $1,000 by which working capital is below $54,000 as at the closing date.
Concurrent with the closing of the transaction, Serebra will consolidate all of its issued and outstanding common shares on the basis of one new common share for every four existing common shares. In addition, Serebra will continue its corporate jurisdiction from Alberta to Newfoundland and Labrador, and change its name to “Bluedrop Performance Learning Inc.”
On closing of the transaction, the current directors of Serebra will resign in favour of four nominees of Blue Drop and two nominees of Serebra, one of which is expected to be Taleeb Noormohamed. In addition, management of Serebra will resign in favour of management of Blue Drop. See below for information on the proposed board and management of the resulting company.
The closing of the transaction is subject to various conditions, including completion of due diligence, obtaining the approval of the shareholders of Serebra and Blue Drop, and obtaining all required regulatory and stock exchange approvals.
On closing of the transaction, Rizbollo, a private company controlled by Emad Rizkalla, will be the only shareholder holding over 10% of the issued and outstanding shares of Blue Drop. The shares of Serebra issued to Rizbollo will be subject to escrow in accordance with the policies of the TSX Venture Exchange.
A management information circular and proxy materials in respect of the proposed transaction will be prepared, sent to shareholders and filed in accordance with TSX Venture Exchange policies on the SEDAR website at www.sedar.com. A press release will be issued once the information circular is filed.
Information on Blue Drop Inc.
Blue Drop Inc. is a training development company providing cloud-based e-learning, computer aided learning, simulation and task training solutions to private and public sector customers. Blue Drop currently has 92 full-time employees and 8 contract personnel working at offices in St. John’s, Ottawa, Fredericton and Halifax and onsite at CFB Gagetown. Blue Drop’s corporate office is located in St. John’s, Newfoundland and Labrador, Canada. Blue Drop was founded as a university engineering class project in 1992 under the name ZeddComm.
Blue Drop’s business is organized and managed as two complementary lines of business – CoursePark Learning Services and Defence & Aerospace.
The CoursePark Learning Services business unit provides learning management solutions and content to private and public sector customers. CoursePark (www.coursepark.com) is an innovative cloud-based learning management solution. Blue Drop’s vision for CoursePark is to be the world’s learning platform for individuals, corporations and governments. To achieve this vision, Blue Drop has developed a multi-channel market strategy to build the user base and generate sustainable revenue streams. Following the commercial release of CoursePark in 2011, revenues were generated from custom courseware development, licensing and subscription fees, consulting services and sale of commercial off-the-shelf courses.
The Defence & Aerospace business unit provides custom courseware development, training products and resource augmentation solutions to improve the safety, productivity and efficiency of military and civil aviation personnel. The Canadian Armed Forces has announced an unprecedented number of major acquisition programs which will require critical performance training systems. Blue Drop’s management has specialized knowledge of military training standards, providing the credentials and scope to compete in the Canadian military training space. With offices throughout Atlantic Canada, Blue Drop is also well positioned to support original equipment manufacturers and global training integrators which elect to outsource military courseware development to Canadian subcontractors in response to the Canadian Government’s Industrial and Regional Benefits program. In international markets, Blue Drop is focused on the supply of niche products where it can offer specialized experience and technologies as well as a strong value proposition for the customer. Blue Drop has secured the worldwide sales rights for a low-cost simulator and is negotiating rights to virtual reality software which could be adapted to a number of military and civil aviation applications. These niche products are responsive to emerging markets where there is limited direct competition and the customer base is a relatively small community initially accessible through user group trade shows and industry networking.
Historically, the majority of Blue Drop’s revenues have been generated from development of custom courseware for a range of commercial customers. Blue Drop’s financial performance for the nine months ended June 30, 2011 reflects its transformation from a services-only business to one which provides integrated training solutions for customers in key target markets. For the nine months ended June 30, 2011 total revenues were $4.8 million, an increase of $2.2 million (82%) over the same period in 2010. Revenues for the Defence & Aerospace business unit increased over $2.5 million as compared to the same period in 2010, accounting for 73% of total revenue. During this period the Defence & Aerospace business unit completed its first sale of the low-cost simulator. The CoursePark Learning Services business unit saw declines in revenues from courseware development offset by $570,000 in licensing and consulting revenues from a key new market channel.
During the nine months ended June 30, 2011, Blue Drop continued to invest to stimulate and support growth, hiring key management and technical personnel, investing in new enterprise resource planning, project management, document management and quality management systems, fostering key strategic relationships, investing in strategic intangible assets, and incurring professional fees related to its transition to a public company. An increase of $682,000 in general and administrative expenses and recognition of $440,000 in stock-based compensation contributed to a net loss of $271,000 for the nine months ended June 30, 2011 as compared to net profit of $237,000 for the same period in 2010.
For more information about Blue Drop, visit www.bluedrop.com.
Proposed Board of Directors and Management
The following are brief descriptions of the proposed directors and officers upon completion of the transaction:
Emad Rizkalla – Director, President & Chief Executive Officer. Mr. Rizkalla co-founded Blue Drop (formerly called ZeddComm) in 1992 as a young engineering student. Mr. Rizkalla has been honoured as one of Canada’s “Top 40 Under 40” in 1999 at the age of 30 and was featured in a TIME Magazine cover story that highlighted eight “young dynamic entrepreneurs who will create the 21st Century.” Mr. Rizkalla holds a Bachelor of Mechanical Engineering from Memorial University of Newfoundland and Labrador.
Derrick Rowe – Director and Chairman. Mr. Rowe has extensive experience with doing business in highly complex regulatory and operating environments. As a founder, Chairman and Chief Executive Officer of Stratos Global Corporation until 1999, he built the company from its start-up to a successful public corporation. Mr. Rowe was named Chairman of FPI Limited, a world leader in the seafood industry, in 2001, and served as Chief Executive Officer from 2002 through 2005. He is active in technology investments through his investment company Name 3 Capital Inc. and is currently on the board of directors of Marport Deep Sea Technologies Inc. Mr. Rowe has served on a number of economic and social organizations, including: Canadian Commissioner of the Northwest Atlantic Fisheries Organization (NAFO), on the Advisory Panel on the Sustainable Management of Straddling Fish Stocks in the Northwest Atlantic, the Information Highway Advisory Council, the International Trade Advisory Committee, and with Canada’s Communication Research Centre. In Newfoundland and Labrador, Mr. Rowe was appointed to the Premier’s Advisory Council on the Economy and Technology, and served as a director of the Health Care Corporation. In the business community, Mr. Rowe has been honoured with significant recognition for his leadership, including Canada’s original “Top 40 Under 40” by the Globe and Mail’s Report on Business Magazine, with the Ernst & Young regional awards’ “Entrepreneur of the Year,” and with Newfoundland and Labrador Export Award.
Andrew Youngman – Director. Mr. Youngman has over 10 years of experience in strategy consulting and private equity investments. He currently serves as the President of Citizens Disability LLC, a Social Security Disability Advocacy group based in Marlborough, Massachusetts, USA, where he is responsible for the design, implementation and execution of business strategy. Mr. Youngman has a Bachelor of arts from Northwestern University and an MBA from the Wharton School of Business at the University of Pennsylvania.
Bernard Beckett – Director. Mr. Beckett previously served with Fishery Products International as Corporate Treasurer and Chief Financial Officer. He has over 35 years of experience in senior financial positions and has a long and distinguished career in public accounting in businesses in the seafood, utility, property and casualty insurance, and transportation industries. After graduating with a business diploma from Ryerson University, he obtained his professional qualifications and experience to be a Chartered Accountant and was admitted to the Institute of Chartered Accountants of Ontario. He is also a member of the Institute of Chartered Accountants of Newfoundland and Labrador and is a Fellow Chartered Accountant.
Taleeb Noormohamed – Director. Mr. Noormohamed assumed his role as President and Chief Executive Officer of the Company after helping to deliver the successful Vancouver 2010 Winter Games as Vice-President, Strategy and Partnerships for the Vancouver Olympic Organizing Committee. Previously, he also served in key posts in the Government of Canada, in the Privy Council Office, the Department of Public Safety and as Director of the Air India Review Secretariat. He has also managed business development for a US-based provider of online sales management solutions, and founded and led the e-business strategy consulting practice of an international professional services organization. Mr. Noormohamed holds a BA from Princeton University and did his Doctoral work at Oxford University. He is a Governor of the Confederation Centre for the Arts in Charlottetown; a Director of Covenant House Vancouver, a Director of The West Vancouver Community Centre and a Governor of the Leon and Thea Koerner Foundation. Mr. Noormohamed is the recipient of the Caring Canadian Award from the Governor General of Canada, and was named one of Vancouver’s “Top Forty Under 40”.
Lecia Stewart – Director. Ms. Stewart has 20 years’ experience in management, major infrastructure project managements, negotiations, marketing, public affairs and labour relations. From 1993 to 1997, Ms. Stewart was President of the West Coast Express. She served as President and Project Director of Vancouver’s SkyTrain rapid transit project from 1997 to 2001. In 2002, Ms. Stewart joined Bombardier to establish a North American high speed rail division. In 2005, she established her own company and consults widely on business, strategy and project development throughout North America. Ms. Stewart is a graduate of the Harvard Business School Executive MBA Program for Management Development. From 2002 to 2007, she served as a member of the board of directors for the Canadian Air Transport Security Authority.
Ted Howell – Chief Financial Officer. Mr. Howell joined Blue Drop in October 2010 with over 25 years’ experience as Chief Financial Officer, Chief Operating Officer and Chief Executive Officer in the retail, hospitality, real estate, and oil and gas sectors. As Chief Financial Officer of Blue Drop, he is responsible for financial reporting and compliance, treasury and business planning. He recently led the implementation of new enterprise resource planning and project management systems at Blue Drop. Active in the local business community, he has served as a director of St. John’s Sports and Entertainment Ltd., St. John’s Board of Trade, Destination St. John’s, Hospitality Newfoundland and Labrador, Hotel Association of Canada and many other local organizations and private companies. He currently serves as director of Canada Development Investment Corporation, the federal Crown corporation which holds and manages the federal government’s investments in General Motors, Chrysler and the Hibernia oil project. Mr. Howell holds B. Comm. and MBA degrees from Memorial University of Newfoundland and Labrador and is also a Chartered Accountant.
John Moores – Vice President, Operations. Mr. Moores currently works with Blue Drop clients to ensure that their e-Learning solutions requirements are clearly identified and communicated to all stakeholders early in the relationship. His analytical proficiency and managerial expertise, honed during his years as a National Account Executive, Product Marketing Manager, and Professional Services Delivery Manager with companies such as Aliant and Bell Canada, enable a customer-driven approach that helps each Blue Drop solution aligns with their clients’ expectations. Mr. Moores has more than 12 years’ experience in selling and delivering complex technical solutions to national and international clients. Mr. Moores holds a MBA and a B. Comm. (Coop) from Memorial University of Newfoundland and Labrador.
Allen Dillon – Vice President, Defence & Aerospace. Mr. Dillon brings two decades of leadership, sales, operational, and business systems experience to Blue Drop. As Vice President, Defence & Aerospace, he is responsible for all client relationships, strategic pursuits, and marketing and communications initiatives for both Canadian and international pursuits. Mr. Dillon’s experience in senior management positions in the defence and information technology sectors is complemented by his leadership qualities gained as a former military officer, having served in operational roles around the globe. Recognized as Business Person of the Year by the Halifax Chamber of Commerce for his contributions to the local economy and the defence industry sector, Mr. Dillon is active on several industry boards, participates in Government sponsored Defence capability and Defence industry reviews, and is an active member in several volunteer organizations.
Corporate Update on Serebra
Serebra is also pleased to announce its partnership with Thunderbird School of Global Management to build Freeport McMoran Copper & Gold, Inc.’s Women’s Business Academy, which is scheduled to launch in March of 2011. The launch will be the first collaborative effort of Serebra’s Campus Platform and Blue Drop’s custom courseware expertise.
During the considerable due diligence process undertaken over the past seven months, Serebra and Blue Drop have begun integrating a number of processes. In May, Serebra announced a reseller agreement with Blue Drop for a portion of Serebra's sales team to sell Blue Drop's Coursepark product. In addition, Serebra and Blue Drop negotiated a separate service agreement to have select members of Serebra's development team provide specialized technical assistance to support Blue Drop's roadmap for the Coursepark product.
About Serebra Learning Corporation
Serebra Learning Corporation provides innovative e-learning solutions to companies, organizations and individuals worldwide. Through Serebra Campus, Serebra provides an extensive course catalogue and versatile learning management system for delivering and managing professional training and development. Serebra's easyLearning program helps people in developing nations gain valuable skills and qualifications, while Serebra Connect is a marketplace solution for industry leaders seeking to build direct-to-consumer market environments. For more information about Serebra and our programs, call 1-800-567-7766 or visit www.serebra.com.
Completion of the transaction is subject to a number of conditions including, but not limited to, Exchange acceptance and shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Serebra should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Macquarie Private Wealth Inc., subject to completion of satisfactory due diligence, has been engaged as sponsor to Serebra in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.