Tuckamore Capital Files Management Information Circular and Releases Letter to Shareholders

TORONTO, ONTARIO--(Marketwired - June 16, 2014) - Tuckamore Capital Management Inc. (TSX:TX) (TSX:TX.DB.B) ("Tuckamore" or the "Company"), announced today that, in accordance with an order of the Ontario Superior Court of Justice received on June 12, 2014, it has filed its Management Information Circular (the "Circular") to be mailed in connection with its previously announced special meeting of shareholders to be held on July 15, 2014 (the "Meeting"). At the Meeting, shareholders will be asked to vote on an arrangement under the Business Corporations Act (Ontario) (the "Arrangement") pursuant to which certain members of Tuckamore's senior management, along with the support of certain funds managed by Birch Hill Equity Partners ("Birch Hill"), have agreed to indirectly acquire all of the issued and outstanding common shares of the Company (each a "Share") for cash consideration at a price of $0.75 per Share.

In connection with the Arrangement, the Company has obtained an independent formal valuation (the "Valuation") from PricewaterhouseCoopers LLP ("PwC") in accordance with applicable securities laws. The consideration of $0.75 per Share is above the midpoint of the Valuation which concluded that that the fair market value of each Share is between $0.60 to $0.81.

The consideration represents a premium of approximately 21.0% to the closing price of our shares on May 2, 2014, the trading day prior to the announcement of the Arrangement, and a premium of approximately 39.2% to the 30-day volume-weighted average price of the shares immediately prior to the announcement of the Arrangement.

The Meeting will be held at 10:00 a.m. on Tuesday, July 15, 2014 at the offices of Norton Rose Fulbright Canada LLP, Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario. Shareholders of record as of May 16, 2014 are entitled to vote in connection with the Meeting.

Shareholders who have questions about voting their proxies should contact Kingsdale Shareholder Services at 1-888-518-1561 or contactus@kingsdaleshareholder.com

The full text of the Board's letter to Shareholders follows:

Dear fellow Shareholders:

It is my pleasure to invite you to a special meeting (the "Meeting") of shareholders (each a "Shareholder") of Tuckamore Capital Management Inc. ("Tuckamore" or the "Company") to consider an important milestone in our Company's history. At the Meeting, Shareholders will be asked to consider a proposal (the "Arrangement") pursuant to which your Tuckamore common shares (the "Shares") would be acquired for cash consideration of $0.75 per Share, representing a significant premium to where the Shares had previously been trading. We are very pleased about this milestone and look forward to seeing you at the Meeting, which will be held at 10:00 a.m. on Tuesday, July 15, 2014 at the offices of Norton Rose Fulbright Canada LLP, Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario.

The purchaser is an entity owned by investment funds managed by Birch Hill Equity Partners ("Birch Hill") and by Dean MacDonald, Tuckamore's Chief Executive Officer and a director, Adrian Montgomery, Tuckamore's Chief Investment Officer, and Paul Hatcher, the President and Chief Executive Officer of Clearstream Energy Holdings LP ("ClearStream").

Your board of directors (the "Board"), without the participation of Mr. MacDonald, has carefully considered the transaction, including the participation by management, and has obtained an independent formal valuation (the "Valuation") from PricewaterhouseCoopers LLP ("PwC") in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and other applicable securities laws. The cash consideration being offered to Shareholders represents a premium of approximately 21.0% to the closing price of our Shares on May 2, 2014, the trading day prior to the announcement of the Arrangement, and a premium of approximately 39.2% to the 30-day volume-weighted average price of the Shares immediately prior to the announcement of the Arrangement and is above the mid-point of the range of values set out in the Valuation which concluded that, based on the assumptions made, information reviewed, matters considered and limitations set forth in the Valuation, the fair market value of the Shares as of June 4, 2014 was in the range of $0.60 to $0.81 per Share.

After significant deliberation, your Board (excluding Mr. MacDonald) believes that the cash offer of $0.75 per Share fully values the Company and that the Arrangement is in the best interests of Tuckamore and its various stakeholders and recommends that Shareholders vote in favour of the Arrangement at the Meeting.

The Board reached its conclusion after considering many factors, including among other things, the strategic review process commenced in late 2012 and through 2013, the risks associated with continuing to operate Tuckamore as a standalone public entity and the fairness opinion received from our financial advisor. The Valuation was one factor, among others, that the Board considered in assessing the merits of the Arrangement. The factors considered by the Board are more fully described in the enclosed Management Information Circular (the "Circular").

Long term Shareholders of Tuckamore understand the many financial and operational challenges that our Company has faced in the past few years. Currently, we are faced with the repayment of $84.5 million of debt in March 2015, and the pending maturity of our Secured Debentures in the amount of $176.2 million in March 2016. This Arrangement offers Shareholders an immediate opportunity to receive a significant premium for their Shares and avoids the refinancing and operational risks associated with Tuckamore's business. It also provides enhanced stability to Tuckamore's employees and debenture holders.

Birch Hill is a well-known and highly regarded private equity investor with the financial resources to complete the Arrangement within a reasonable time. The certainty of value provided by their participation and the cash consideration offered to Shareholders was compelling to the Board and contributed to our recommendation to Shareholders.

We strongly urge you to review the Circular with your financial advisor. If you have questions about voting your Shares, you can contact our proxy solicitor Kingsdale Shareholder Services Inc. at 1-888-518-1561 or contactus@kingsdaleshareholder.com

To assist in your decision making, I would like to summarize and highlight some key facts about the Arrangement, including the process your Board undertook, the benefits of supporting the Arrangement, and the risks to Shareholders and the Company if the Arrangement fails to pass:

Cash Consideration & Support from Shareholders

The Arrangement provides immediate and certain value to Shareholders and eliminates the ongoing operational and refinancing risks associated with Tuckamore's businesses. As the offer is solely cash, Shareholders are not being asked to evaluate the prospects and risks of another business as part of a share exchange.

Long term Shareholders, who have struggled with any ability to meaningfully exit their investment because of Tuckamore's relatively light trading volumes, will enjoy a liquidity event. Notably, prior to the announcement of the Arrangement on May 5, 2014, it took an average of approximately 771 trading days to turn over the public float based on the Company's trading volume on the TSX.

Tuckamore's directors (excluding Mr. MacDonald), who own approximately 3.8% of Tuckamore's Shares, have entered into voting support agreements in favour of the Arrangement and Newport Private Wealth Inc., which in its capacity as a portfolio manager exercises control or direction over approximately 32% of Tuckamore's Shares (of which, certain of these Shares of the Company are beneficially owned or controlled by directors or officers of the Company), has, subject to certain conditions, agreed to recommend to its clients that they vote in favour of the Arrangement.

The Value Maximization Process

As more fully detailed in the Circular, the Arrangement represents the culmination of a comprehensive Board-led value maximization and strategic alternatives process that began in late 2012 and through 2013 with the retention of a financial advisor, Canaccord Genuity Corp. The value maximization and strategic alternatives process included the consideration of a variety of other acquisition proposals:

• Beginning in January 2013, the Board actively solicited expressions of interest for Clearstream, a subsidiary of the Company that for the year ended December 31, 2013 generated approximately 78.0% of the Company's revenue and essentially all of Tuckamore's earnings before interest, taxes, depreciation and amortization ("EBITDA"). The process involved contact with over 20 possible purchasers in Canada, the United States and Europe and ultimately resulted in three non-binding letters of intent. None of the offers, however, could be supported from a value perspective or were in a form that could be implemented. Ultimately, one party withdrew its proposal after completing diligence, another party, supported by members of management, withdrew after failing to finalize its financing and the third party failed to make a proposal that the Board could support from a value perspective, despite significant negotiations.

• In January 2014 and again in March 2014, the Board met to formally consider proposals received from a consortium of two private equity funds that specialize in distressed debt investments. The proposals contemplated up to $100 million of new equity capital for Tuckamore to be used to backstop a rights offering of Tuckamore's Shares. The rights offering would be completed at a discount to the market price (and possibly as low as $0.30 per Share) and was conditional upon a refinancing of the Company's debt. The Board determined that the proposals were not only highly dilutive to existing Shareholders, but would also result in a transfer of effective control to these private equity funds without paying Shareholders any premium. The Board did, however, invite these private equity funds to consider alternative proposals, including making a bid for all of the Shares of the Company.

• In January 2014, Mr. MacDonald and Mr. Montgomery approached the Board to indicate that they were considering a management sponsored acquisition of Tuckamore and asked that the Board consider the entering into of non-disclosure agreements by the Company with potential financial sponsors.

• In March 2014, one of the private equity funds offered to acquire all of the Tuckamore Shares held by clients of Newport Private Wealth Inc. at a price equal to 115% of the then market price of the Shares, but not to exceed $0.60 per Share. The Board was not prepared to support a partial bid for the Shares of Tuckamore, but again confirmed that it would welcome an opportunity to entertain a fully valued offer for all of Tuckamore's Shares.

• In April 2014, Birch Hill sent a non-binding offer to the Board to acquire all of Tuckamore for $0.60 per Share. The Board, along with its legal and financial advisory teams, carefully considered the merits of this offer, its risks, and the alternatives available to the Company. The Board considered thoroughly a variety of issues including the financial adequacy of the offer, the deal certainty, the scope of "fiduciary out" provisions and the structure of the "break fees". Ultimately, the Board instructed its financial advisor to enter negotiations with Birch Hill to improve the offer to $0.75 per Share with reduced break fees and capped fees.

• After several days of negotiations (more fully disclosed in the Circular), Birch Hill agreed to improve its offer to $0.75 per Share, and reduce its proposed break fee, provided that the Company work expeditiously to close the transaction. The break fee ultimately agreed to was approximately 2.0% of the Company's total enterprise value which, your Board believes, is in line with Canadian transactions over the past 5 years.

• In order to facilitate an announcement of the transaction prior to the receipt of a formal valuation, Birch Hill and the Company negotiated a break fee structure that would enable the Company to terminate the Arrangement for a substantially reduced fee in the event that the Board, following the receipt of such formal valuation, changed its recommendation or terminated the Transaction as a result of the conclusions reached in the formal valuation.

• Your Board also negotiated within the Arrangement the right to engage in discussions and negotiations with other interested parties who provide the Company with unsolicited superior proposals, thereby preserving upside potential for all stakeholders.

• On June 9, 2014, the Board received the Valuation from PwC concluding that the fair market value of the Shares is between $0.60 to $0.81 per Share. The cash consideration to be received under the Arrangement is above the mid-point of this range.

The process pursued by your Board was thorough, thoughtful, comprehensive and focused on preserving and maximizing value for the Company's Shareholders and its other stakeholders. The Board retained knowledgeable and experienced financial and legal advisors and obtained a formal valuation from a qualified and independent valuator. As a result of the strategic review process, the Board has considered several proposals and has actively encouraged parties to offer alternatives and improved terms.

Ultimately, the cash consideration being offered to you is above the mid-point of the range of value determined by PwC in its Valuation, providing the Board and Shareholders with further comfort that this deal offers value for Shareholders.

It is also noteworthy that since receiving the Birch Hill offer, the Company has not received a single expression of interest from any other party interested in discussing the possibility of an alternative offer.

This lack of alternative interest strengthens the Board's belief that the current offer reflects fair value for all our Shareholders.

The Risks of Not Completing the Arrangement

Shareholders might reasonably ask what is being given up by voting in favour of the Arrangement. The purchase of all of the outstanding Shares means, of course, that Shareholders will no longer participate in the upside potential of Tuckamore's business. The Board believes, however, that the Arrangement offers Shareholders a significant premium from the trading price of the Shares and that this premium compensates Shareholders for the upside potential they may be forgoing.

Your Board also believes that if the Arrangement is not approved, there is a real risk that the Company's Share price may decline, perhaps materially. The Share price was less than $0.20 a year ago. The Board is concerned that failure to accept the current offer might open the door for others to acquire your Shares and the Company at a price significantly lower than $0.75 per Share.

Tuckamore is also exposed to operational and financing risks, including:

• significant pending debt repayment obligations under the Company's existing credit agreement ($84.5 million due in March 2015) and the outstanding secured debentures ($176.2 million due in March 2016) and the risks associated with refinancing or replacing such indebtedness, as required, with appropriate debt or equity capital on terms favourable to the Company;

• our underlying businesses have experienced volatility in performance over the past few years. Although we have worked to reduce instability, the majority of our businesses rely on customer contracts which may be difficult to predict and have led to the fluctuating financial performance recently experienced;

• Tuckamore is a highly levered company that is subject to significant restrictive covenants under its existing credit agreement and outstanding secured debentures. Our leverage and covenants limit our ability to capitalize on growth opportunities and impair our ability to respond to changes in the economy and the industries in which we operate.

• The loss of key personnel and management whose goodwill with customers and relationships are critical to the continuance of certain of our businesses.

Your Vote is Very Important

The Arrangement represents an important milestone in our Company's history. To receive the premium for your Shares and avoid future financing and operational risks associated with Tuckamore's business, please cast your vote today in favour of the Arrangement Resolution. Your vote is important regardless of how many Shares you own.

If you have any questions or need assistance in voting your proxy, please contact our proxy solicitor Kingsdale Shareholder Services at 1-888-518-1561 (toll free within North America) or 416-867-2272 (collect calls accepted), or by email at contactus@kingsdaleshareholder.com.

We look forward to seeing you at the Meeting.

Yours very truly,

Douglas Brown

Chairman of the Board of Directors

About the Company

Tuckamore has investments in 7 businesses representing a diverse cross-section of the Canadian economy.

About Birch Hill's Investment

The investment will be part of Birch Hill Fund IV with over $1 billion in committed capital.