FA Capital closes $100 mln credit facility with Sagard Holdings

Founders Advantage Capital Corp (FA Capital) has closed a $100 million senior secured credit facility with the credit subsidiary of Sagard Holdings. The deal’s proceeds will be used to repay FA Capital’s existing senior indebtedness, make additional acquisitions, and for other priorities. Based in Calgary, FA Capital is focused on making majority-interest acquisitions of cash-flow positive mid-market companies. Sagard is a debt and equity investment firm affiliated with Canada’s Power Corp.


Founders Advantage Closes CAD $100 Million Senior Secured Credit Facility with Sagard Credit Partners

CALGARY, ALBERTA–(Marketwired – June 14, 2017) – Founders Advantage Capital Corp. (TSX VENTURE:FCF) (the “Corporation”) is pleased to announce that it has closed its previously announced USD $75 million (approx. CAD $100 million) senior secured credit facility (the “Senior Facility”) with Sagard Holdings ULC (“Sagard Holdings”), pursuant to which Sagard Credit Partners will be the lender. The proceeds from the Senior Facility will be used to repay the Corporation’s existing senior indebtedness, to complete further acquisitions and for general corporate purposes. The initial draw at closing under the Senior Facility is USD $42 million (approx. CAD $56 million), with additional draws subject to Sagard Holdings’ further approval.

The Senior Facility has a five (5) year term and bears interest at a rate of LIBOR plus 700 basis points (with a 1.00% LIBOR floor), payable quarterly on March 31, June 30, September 30 and December 31 each year. The Senior Facility is secured by a first priority lien on all present and after-acquired assets of the Corporation. The borrowings under the Senior Facility are denominated in USD and the Corporation anticipates implementing a foreign currency hedging program to reduce currency risk.

As additional consideration for the Senior Facility, the Corporation has issued Sagard Holdings 2,078,568 non-transferable common share purchase warrants (the “Warrants”), which Warrants are equal to 5% of the Corporation’s fully diluted common shares outstanding as at the date hereof. Each Warrant entitles Sagard Holdings to acquire one common share of the Corporation at any time over the next five years upon payment of the Warrant exercise price. The Warrant exercise price for 1,039,284 Warrants is $3.508 (a 15% premium to the 30 day VWAP of the common shares) and the exercise price for the remaining 1,039,284 Warrants is $3.965 (a 30% premium to the 30 day VWAP of the common shares).

About Sagard Credit Partners and Sagard Holdings
Sagard Credit Partners, part of Sagard Holdings (and each a Member of the Power Corporation Group of Companies), is focused on providing debt capital to middle market companies in Canada and the US. Sagard Credit Partners provides custom-tailored debt solutions, focusing on the needs of the borrower, and looks to invest in companies where it can develop deep, long term relationships.

Sagard Holdings is an investment firm based in New York and Toronto which invests long term equity and debt capital in middle market companies in the US and Canada through its affiliates, including Sagard Credit Partners.

About Founders Advantage Capital Corp.
The Corporation is listed on the TSX Venture Exchange as an Investment Issuer (Tier 1) and employs a permanent investment approach. The Corporation has developed an investment approach to create long-term value for its shareholders and partner entrepreneurs (investees) by pursuing majority interest acquisitions of cash flow positive middle-market privately held entities. The Corporation seeks to win mandates by appealing to the segment of the market which is not aligned with traditional private equity control, royalty monetizations or related structures. The Corporation’s innovative platform offers incentives (contractually) for growth in favour of our partner entrepreneurs. This unique platform is designed to appeal to entrepreneurs who believe in the growth of their businesses and who want the added ability to continue to manage the business with a long-term partner.

The Corporation’s common shares are listed on the TSX Venture Exchange under the symbol “FCF”.
For further information please refer to the Corporation’s website at www.advantagecapital.ca.

Founders Advantage Capital Corp.
Stephen Reid
Chief Executive Officer

Founders Advantage Capital Corp.
Darren Prins
Chief Financial Officer

Founders Advantage Capital Corp.
James Bell
Chief Operating Officer

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