TORONTO, May 2, 2012 /CNW/ – The Westaim Corporation (the “Company”)
(TSX: WED) announced today that it has entered into a definitive
agreement (the “Agreement”) with Intact Financial Corporation
(“Intact”) (TSX: IFC) pursuant to which, subject to the terms and
conditions of the Agreement, Intact has agreed to purchase from the
Company all of the issued and outstanding shares in the capital of
JEVCO Insurance Company (“Jevco”) for $530 million in cash (the
“Transaction”). Adjusting for the payment of a $30 million cash
dividend paid by Jevco to Westaim during the first quarter of fiscal
2012, the purchase price is approximately 1.38 times the net book value
of Jevco as at December 31, 2011.

The Agreement contains, among other things, a non-solicitation covenant
on the part of Westaim, subject to customary “fiduciary out” provisions
that entitle Westaim to consider and accept a superior proposal, a
right in favour of Intact to match any superior proposal and the
payment to Intact of a termination fee of $18.5 million if the
Transaction is not completed as a result of a superior proposal.

The Board of Directors of Westaim, after consultation with its financial
and legal advisors, has unanimously approved entering into the
Agreement and recommends that Westaim shareholders approve the
Transaction at a special meeting of shareholders to be convened and
held for the purpose of approving the Transaction. Full details of the
Transaction will be included in a management information circular and
related proxy materials (collectively, the “Circular”) to be mailed to
Westaim shareholders in accordance with applicable securities laws.
Westaim expects to mail the Circular to Westaim shareholders on or
about June 8, 2012.

The Transaction, which is expected to close during the fall, is
conditional upon, among other things, the approval of Westaim’s
shareholders and the receipt of the required regulatory approvals.
Alberta Investment Management Corporation, on behalf of certain funds
whose investments it manages, Goodwood Inc., Goodwood Management Inc.
and the directors and executive officers of Westaim and Jevco, have
agreed to vote their Westaim shares (representing in the aggregate
approximately 48.6% of the outstanding common shares and approximately
53.7% of all outstanding shares entitled to vote at the special meeting
of Westaim shareholders) in favour of the Transaction.

Following the closing of the Transaction, it is expected that Westaim
will distribute substantially all of the net proceeds from the sale in
the form of a return of capital to the shareholders of Westaim.

Cameron MacDonald, CEO of Westaim commented, “The sale of Jevco
represents a significant appreciation for Westaim’s shareholders. We
expect this transaction to produce an attractive return to Westaim
shareholders who participated in our equity financing at the time of
the Jevco acquisition in March 2010. The success of this transaction
can be directly attributed to the hard work and dedication of Serge
Lavoie, CEO of Jevco, and his team.”

GMP Securities LP, acting as financial advisor to Westaim, has provided
an opinion that consideration to be received by Westaim in connection
with the Transaction is fair, from a financial point of view, to
Westaim. Westaim’s legal advisors are Heenan Blaikie LLP (corporate,
securities and tax) and Cassels Brock & Blackwell LLP (insurance and
competition).

About The Westaim Corporation

Westaim is a financial holding company focused on the property and
casualty insurance industry. Westaim’s common shares are listed on The
Toronto Stock Exchange under the trading symbol WED. Further
information can be found in the disclosure documents filed by the
Company with the securities regulatory authorities, available at www.sedar.com.

Certain portions of this press release as well as other public
statements by Westaim contain forward-looking statements. Such
forward-looking statements include but are not limited to statements
concerning the proposed Transaction, Jevco’s business and the industry
in which it operates; investment strategies and expected rates of
return; and strategic alternatives to maximize value for shareholder.
These statements are based on current expectations that are subject to
risks, uncertainties and assumptions and Westaim can give no assurance
that these expectations are correct. Westaim’s actual results could
differ materially from those anticipated by forward-looking statements
for various reasons generally beyond our control, including but not
limited to: (i) failure to complete the Transaction on the terms
described herein or at all, (ii) changes in market conditions or
deterioration in underlying investments; (iii) general economic,
market, financing, regulatory and industry developments and conditions;
(iv) the risks relating to Jevco’s business; and (iv) other risk
factors set forth in Westaim’s Annual Report, Quarterly Reports or
Annual Information Form. Westaim disclaims any intention or obligation
to revise forward-looking statements whether as a result of new
information, future developments or otherwise except as required by
law. All forward-looking statements are expressly qualified in their
entirety by this cautionary statement.

SOURCE Westaim Corporation