10647802 Canada Ltd entered into letter of intent to acquire Horizon North Logistics Inc. in a reverse merger transaction for approximately CAD 120 million.
March 08, 2020
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10647802 Canada Ltd entered into letter of intent to acquire Horizon North Logistics Inc. (TSX:HNL) in a reverse merger transaction for approximately CAD 120 million on December 23, 2019. 10647802 Canada Ltd entered into a share purchase agreement to acquire Horizon North Logistics Inc. (TSX:HNL) in a reverse merger transaction on March 9, 2020. In consideration, Horizon agrees to issue, on the closing date, such number of Horizon shares required to represent 49% of the Horizon shares calculated on a fully diluted basis immediately after the closing time. In the event that the Horizon share consideration would represent more than 49.99% of the total number of outstanding Horizon shares (on a non-diluted basis) immediately following the closing time, the number of Horizon shares to be issued at the closing time shall be reduced to such number of Horizon shares required to represent 49.99% of the outstanding Horizon shares immediately following the closing time. Horizon shall pay CAD 5 million as liquidated damages in case of termination.
When the transaction closes, R. William McFarland, Chairman of 10647802 Canada Limited, will become Chairman of the combined company. John MacCuish, Chief Executive Officer of 10647802 Canada Limited, and Rod Graham, Chief Executive Officer of Horizon North, will be appointed Co-Chief Executive Officers, and both will sit on the Board of Directors. The Board of Directors of the combined company will consist of 8 members consisting of 4 members of the current Horizon North Board (being Kevin Nabholz, Russell Newmark, Mary Garden and Rod Graham) and 4 new members to be appointed by Fairfax Financial Holdings Limited (TSX:FFH), parent of 9477179 Canada (being R. William McFarland, David Johnston, Simon Landy and John MacCuish). Following the closing of the transaction, the new company will have its head office in Toronto, Ontario, with Canadian corporate offices in both Toronto and Calgary. Completion of the transaction is subject to certain closing conditions, including the approval of the Horizon North Shareholders and receipt of certain regulatory approvals, including the approval of the Toronto Stock Exchange of the listing of the Horizon North Shares to be issued in connection with the transaction, approval under the Competition Act, including the approval of Canadian Competition Bureau, the lenders under the Horizon credit facility and the 10647802 credit facility shall have consented to, or otherwise provided a waiver with respect to any default or consent requirement relating to, the transaction, resignations and releases of 10647802 and Horizon Directors, Investor Rights Agreement and nominees of 10647802 parent shall have been appointed to the Horizon Board. The transaction was unanimously approved by both Horizon North and 10647802's Boards of Directors, as well as 10647802's sole shareholder. The transaction was unanimously recommended for approval by the special committee to the Board of Directors of Horizon North. Horizon North's largest shareholder, Polar Asset Management Partners, who holds approximately 15% of Horizon North Shares and who has agreed to a hard voting support agreement, along with certain directors and officers of Horizon North, who hold or control approximately 2.3% of Horizon North Shares, have agreed to support and vote in favor of the transaction. The special meeting of shareholders is to be held at on May 26, 2020. The parties received Competition Act approval on April 17, 2020 and conditional listing approval from the TSX on April 22, 2020. The transaction is expected to close in the second quarter of 2020. As of April 30, 2020, the closing the transaction will occur in May 2020. As of May 27, 2020, the transaction is expected to close on or about May 29, 2020.
Scotia Capital Inc. is acting as financial advisor and fairness opinion provider to Horizon North. Chelsea Hunter of Blake, Cassels & Graydon LLP is acting as legal advisor to Horizon North and Thomas Yeo, John J. Tobin and Omar Wakil of Torys LLP is acting as legal advisor to 10647802 Canada. AST Trust Company (Canada) acted as transfer agent to Horizon.
Dexterra Group Inc. is a Canada-based company, which is engaged in delivering a range of support services for the creation, management, and operation of infrastructure across Canada. The Company operates through four segments: Integrated Facilities Management (IFM), Workforce Accommodations, Forestry and Energy Services (WAFES), and Modular Solutions. The Company's IFM business delivers a suite of operation and maintenance solutions for built assets and infrastructure in the public and private sectors, including aviation, defense, education, rail, healthcare, and leisure. The Company's WAFES business provides a range of workforce accommodations solutions, forestry services and access solutions to clients in the energy, mining, forestry, and construction sectors, among others. The Company's Modular Solutions business integrates modern design concepts with off-site manufacturing processes to produce building solutions for housing, commercial, residential, and industrial clients.
10647802 Canada Ltd entered into letter of intent to acquire Horizon North Logistics Inc. in a reverse merger transaction for approximately CAD 120 million.