*All amounts in this press release are in Canadian dollars unless otherwise specified.
 
TSO3 Inc., an innovator in sterilization technology for medical devices in healthcare settings, has entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which 9402-4874 Québec Inc. (the "Purchaser"), a subsidiary of Stryker Corporation ("Stryker"), will acquire all of the issued and outstanding common shares (the "Shares") of the Company for $0.43 in cash per Share (the "Purchase Price"), subject to adjustment in the event the transaction expenses are greater than currently anticipated. The Company does not currently expect any adjustment to be made to the Purchase Price and in the event such an adjustment would be required, that it would be minimal. If the Purchase Price is adjusted, the Company will issue a press release setting out such adjustment no later than two business days prior to the special meeting of shareholders (the "Special Meeting") to be called to approve the transaction. The Purchase Price represents a premium of approximately 18 percent to the volume weighted average price of the Shares on the Toronto Stock Exchange for the 30 calendar‑day period prior to the date hereof. The purchase of 100 percent of the equity of TSO3 represents a total enterprise value of approximately $68.4 million (approximately US$51.7 million), including existing indebtedness.
 
R.M. (Ric) Rumble, president and CEO of TSO3, stated: "TSO3's board of directors and management believe that this transaction provides the best liquidity opportunity for shareholders. Reaching this conclusion is an important step for TSO3 as well as current and future customers, as it will provide the expertise and the financial resources to best help TSO3 achieve its full potential. We look forward towards its successful completion."
 
Recommendation of the Board of Directors and Special Committee
The process and negotiations of the transaction with Stryker were supervised by a special committee of the board of directors of TSO3 (the "Board of Directors") composed solely of independent directors (the "Special Committee"). The transaction has been approved unanimously by the Board of Directors following the unanimous recommendation of the Special Committee. Speaking on behalf of the Special Committee and the Board of Directors, Linda Rosenstock stated: "We are very pleased to be entering into this transaction with Stryker, which has both strong management and a strong balance sheet that will help move TSO3 forward. The combination of our teams and projects will be beneficial for both companies."
 
The Board of Directors and the Special Committee have unanimously, after receiving legal and financial advice, determined that the transaction is in the best interests of TSO3 and is fair to its shareholders. The Board of Directors unanimously recommends that the shareholders vote in favor of the transaction at the Special Meeting.
 
In connection with the proposed transaction, directors and officers of the Company holding an aggregate of approximately 1.0 percent of the Shares (on a non-diluted basis) as of the date hereof have agreed to vote their Shares in favor of the transaction.
 
Transaction Details
The transaction will be implemented by way of a statutory plan of arrangement under the Business Corporations Act(Québec) and is subject to court approval, shareholder approval of at least 662/3 percent of the votes cast by shareholders present in person or represented by proxy at the Special Meeting, with each shareholder being entitled to one vote per Share and satisfaction of all closing conditions, including the level of inventory of the Company as of closing. Further details regarding the voting requirements applicable to the proposed transaction will be set out in the management information circular to be filed and mailed to shareholders in connection with the transaction.
 
The Arrangement Agreement contains representations, warranties and covenants customary for transactions of this nature, including a prohibition against the Company soliciting or initiating any inquiries or discussions regarding any other business combination or sale of assets, subject to the fiduciary duty of the Board of Directors in the event that an unsolicited superior proposal is received by the Company and the right in favor of Stryker to match any superior proposal. A termination fee of $3,076,000 is payable to Stryker in certain circumstances, including if Stryker fails to exercise its right to match in the context of a superior proposal and the Company elects to terminate the Arrangement Agreement prior to the Company's shareholders voting to approve the Arrangement.
 
The Company intends to mail a management information circular in the upcoming weeks to its shareholders and expects to hold the Special Meeting in September 2019. Completion of the transaction is anticipated to occur in the fourth quarter of 2019, subject to satisfaction of all closing conditions. Details of the terms of the transaction will be set out in the Arrangement Agreement and the management information circular, which will be available under the profile of TSO3 at www.sedar.com.
 
Piper Jaffray & Co ("Piper Jaffray"), retained by the Company as lead financial advisor, and Desjardins Capital Markets ("Desjardins"), retained by the Special Committee as financial advisor, each provided an opinion to the Board of Directors to the effect that as at August 12, 2019, subject to the assumptions, qualifications and limitations provided therein, the consideration to be received by the shareholders pursuant to the transaction is fair, from a financial point of view, to such shareholders. The fairness opinions will be included in the management information circular to be mailed to shareholders in connection with the approval of the transaction.
 
Piper Jaffray is acting as lead financial advisor to TSO3 and Desjardins is acting as financial advisor to the Special Committee. Lavery de Billy L.L.P. is serving as legal counsel to TSO3, Nexsen Pruet, LLC is serving as U.S. legal counsel to TSO3 and Stikeman Elliott LLP is serving as legal counsel to the Special Committee and the Board.
 
Ropes & Gray LLP is serving as principal legal counsel to the Purchaser and Stryker and Blake, Cassels & Graydon LLP is serving as their Canadian legal counsel.