AF Legal Group Limited (ASX:AFL) has executed a share sale deed to acquire GTC Legal Group Holdings Pty Ltd from its existing shareholders for AUD10.9 million October 18, 2022. The total consideration to be paid to the vendors of GTC is estimated to be 49,709,716 AFL shares assuming the balance of GTC's net debt is AUD 10 million at completion. On Completion, the number of Consideration Shares to be issued will be equal to the number of shares on issue in AFL on Completion, less a number of shares which is equal in value to the aggregate estimated net debt and any estimated working capital deficit of GTC. As part of the transaction, AFL will be acquiring the net debt of GTC which is estimated to be AUD 10 million and cannot be more than AUD 10.5 million. AFL has already obtained indicative support from its bank to refinance the GTC debt. At completion of the transaction, the total ownership of AFL held by GTC's existing shareholders is estimated to be 39%. Pursuant to the transaction, two new directors from GTC will join the AFL Board, namely GTC Managing Director James Stevens and GTC Chief Executive Officer Wayne Windell. Existing AFL non-executive independent directors, Sarah Kelly and Kevin Lynch, will step off the Board on completion and a new independent non-executive director will be appointed. Rick Dennis and Grant Dearlove will remain on the AFL Board as Non-Executive Chairman and Executive Director respectively. The transaction is subject to approval by AFL shareholders including for the purposes of section 611, item 7 of the Corporations Act; the independent expert concluding that the Proposed Merger is fair and reasonable, or not fair but reasonable; AFL having re-financed and repaid GTC's current debt facility; AFL obtaining the consent of its current lender to the Proposed Merger; ASX granting any waivers required to implement the Proposed Merger; and there being no material breach of the Sale Agreement by any party which has not been remedied. Completion will occur on the later of December 20, 2022. As on November 24, 2022, AFL advises that the GTC transaction has been terminated with immediate effect. AFL will engage with GTC to finalise the arrangements regarding the termination. In the meantime, AFL will immediately cease all work on the GTC transaction.

AF Legal Group Limited (ASX:AFL) cancelled the acquisition of GTC Legal Group Holdings Pty Ltd on November 24, 2022.