Canadian specialty finance firm Difference Capital Financial has nominated five new members to the board of directors of Benev Capital Inc (TSX-V: BEV). The nominees, who include the firm’s CEO Michael Wekerle and Relay Ventures‘ co-founder and managing partner John Albright, are intended to provide “fresh perspective and new leadership” and address Benev’s recent changes in strategic direction. Difference Capital acquired a 28.4% interest in the company in March. The Oakville, Ontario-based Benev, which currently operates as a merchant bank, is also backed by Canadian private equity firm Second City Capital Partners.
Difference Capital Nominates Five Highly-Qualified Nominees for BENEV Board and Responds to BENEV’s Change in Strategic Direction
TORONTO, ONTARIO (CNW – May 26, 2014) – Difference Capital Financial Inc. (“DCF”) (TSX:DCF)(TSX:DCF.DB) a holder of 28.4% of the outstanding shares of BENEV Capital Inc. (NEX: BEV.H) (“BENEV” or the “Company”) announced today that it has nominated the following five highly-qualified individuals (the “Nominees”) for the Board of BENEV:
“The Company’s recent announcement of a dramatic shift in strategy without consulting shareholders is further evidence of a board that requires fresh perspective and new leadership,” said Michael Wekerle, CEO of DCF. “The Nominees intend to diligently pursue a shareholder focused agenda of value creation for the benefit of all shareholders.”
Each of the Nominees contributes a wealth of skills and experience drawn from their respective backgrounds in technology, finance, law and investment management.
DCF’S HIGHLY-QUALIFIED NOMINEES:
John Albright: Mr. Albright is Co-Founder and Managing Partner of Relay Ventures an early stage venture fund exclusively focused on mobile connectivity. Mr. Albright has a history of assisting entrepreneurial companies through significant growth and eventually to the public markets. Mr. Albright currently serves as a director of several leading private technology companies, and is an independent director of DCF. In addition, he serves as a director of the Canadian Venture Capital and Private Equity Association.
Henry Kneis: Mr. Kneis is the Chief Operating Officer and Chief Financial Officer of DCF. He has 25 years of experience specializing in alternative assets including hedge fund investment management, structured product development, equity derivatives and proprietary arbitrage trading. He was the Founder, Chief Executive Officer and Chief Investment Officer of Abria Financial Group, where he managed three portfolios of hedge funds. Prior to founding Abria, Mr. Kneis was the Chief Executive Officer of Maple Securities Ltd., a privately held, $100 million investment dealer and Toronto Stock Exchange member.
Adrian Montgomery: Mr. Montgomery is the Chief Investment Officer of Tuckamore Capital Management Inc., a publicly-traded company that has invested approximately $700 million in successful private businesses since its inception in 2005. Prior to joining Tuckamore, he headed business development at Rogers Media Inc. Mr. Montgomery is a lawyer and member of the New York State Bar and currently serves on the boards of Epsilon Energy, a TSX-listed Company, and the Toronto East General Hospital Foundation.
Michael Wekerle: Mr. Wekerle is the Chief Executive Officer of DCF. He was previously a partner and co-founder of Griffiths McBurney & Partners’ (GMP) sales and trading operations. He served as Vice Chairman of Institutional Trading at GMP Securities until August 2011, where he was widely considered a leading investment advisor in Canada. During his time, he helped establish the firm’s hedge fund, institutional trading desk and a reputation for assisting clients in profiting from large-scale transactions.
Cameron White: Mr. White is the Chief Operating Officer and a founding partner of Thunderbird Films Inc., a rapidly growing Vancouver-based TV and film production company with offices in Los Angeles and Toronto. Mr. White applies his expertise at Thunderbird towards corporate finance and deal structures, legal issues and overall company strategy. From 1995 to 2002, Mr. White served as Chairman of Peace Arch Entertainment Group. He has also practiced corporate and securities law for 15 years with a focus on natural resources, media and technology.
DCF RESPONDS TO BENEV CHANGE IN STRATEGIC DIRECTION
On May 22, BENEV announced that it will be pursuing the purchase of top-line royalty streams from a number of multi-location businesses and franchisors – this represents a major shift in its corporate strategy. This decision was made without the consultation or support of the Company’s major shareholders, including DCF. In unilaterally pursing this course of action the Company’s Board and advisors have demonstrated a disregard towards the duties and obligations owed to BENEV shareholders.
As the Company’s largest shareholder, DCF insists that the Company cease any attempts to alter its corporate strategy, issue dilutive equity or equity-linked securities or enter into any transformative transaction until all shareholders have an opportunity to express their views by way of a vote at the upcoming Annual General Meeting, scheduled for next month.
DCF maintains that any transformative transaction or securities issuance proposed to be undertaken by the Company must be presented to and voted on by the Company’s shareholders.
DCF reserves all rights with respect to future actions and is carefully considering all legal options and remedies available to it as a shareholder of BENEV.
DCF has hired the Special Situations Team of Norton Rose Fulbright Canada as its legal advisor, and Bayfield Strategy, Inc. as its communications advisor, in connection with its investment in BENEV.
ABOUT DIFFERENCE CAPITAL FINANCIAL INC.
Difference Capital Financial Inc. invests in and advises growth companies. We leverage our capital markets expertise to help unlock the value in technology, media and healthcare companies as they approach important milestones in their business lifecycle. Difference Capital Financial Inc. is traded under the Toronto Stock Exchange under the symbol “DCF”.
Difference Capital Financial Inc.
Chief Executive Officer
Bayfield Strategy, Inc.
Information about the Nominees
As previously stated, the Nominees are John Albright, Henry A. Kneis, Adrian Montgomery, Michael Wekerle and Cameron White. The table below sets out, in respect of each Nominee, his or her name, province or state and country of residence, his or her principal occupation, business or employment within the five preceding years, and the number of common shares beneficially owned, or controlled or directed, directly or indirectly, by such nominee as of May 26, 2014.
Other Boards of Reporting Issuers
As at the date hereof, the directorships held by each of the Nominees in reporting issuers (or the equivalent) in Canada or otherwise, are as set out below:
Cease Trade Orders and Bankruptcies
To the knowledge of DCF, no Nominee is, as at the date hereof, or has been, within 10 years before the date hereof, (a) a director, chief executive officer or chief financial officer of any company (including BENEV) that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days (each, an order), in each case that was issued while the Nominee was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after the Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) a director or executive officer of any company that, while such Nominee was acting in that capacity, or within a year of such Nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) someone who became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such Nominee.
Penalties and Sanctions
To the knowledge of DCF, as at the date hereof, no Nominee has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation, or by a securities regulatory authority, or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a Nominee.
To the knowledge of DCF, none of the directors or officers of DCF, or any associates or affiliates of the foregoing, or any of the Nominees or their respective associates or affiliates, has: (a) any material interest, direct or indirect, in any transaction since the commencement of BENEV’s most recently completed financial year or in any proposed transaction which has materially affected or will materially affect BENEV or any of its subsidiaries; or (b) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting (as defined below), other than the election of directors.
Additional Information Relating to Public Broadcast Solicitations
BENEV has announced that it has called an annual general and special meeting of shareholders to be held on June 30, 2014 (the “Meeting”). DCF may file a dissident information circular (the “Dissident Circular”) in connection with the Meeting, or any adjournment or postponement thereof, in due course in compliance with applicable securities and corporate laws.
Notwithstanding the foregoing, DCF is providing the disclosure required under section 9.2(4)(c) of National Instrument 51-102 – Continuous Disclosure Obligations in accordance with securities and corporate laws applicable to public broadcast solicitations.
This press release and any solicitation made by DCF in advance of the Meeting is, or will be, as applicable, made by DCF and not by or on behalf of the management of BENEV. All costs incurred for any solicitation will be borne by DCF, provided that, subject to applicable law, DCF may seek reimbursement from BENEV for DCF’s out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Company’s board of directors.
Any proxies solicited by DCF may be solicited by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under applicable laws, including pursuant to a Dissident Circular sent to shareholders of BENEV. Solicitations may be made by or on behalf of DCF, by mail, telephone, fax, email or other electronic means, and in person by directors, officers and employees of DCF or by the Nominees. DCF may engage the services of a proxy advisor to assist with solicitation on behalf of DCF.
It is expected that any proxies solicited by DCF in connection with the Meeting may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law.
BENEV’s registered office is Stikeman Elliott LLP, 199 Bay Street, Suite 5300, Commerce Court West, Toronto, ON M5L 1B9 and its principal business and head office is 1245-200 Granville Street Vancouver, BC V6C 1S4.
DCF has filed this press release, which contains the information required by section 9.2(4)(c) of National Instrument 51-102 – Continuous Disclosure Obligations and Form 51-102F5 Information Circular in respect of the Nominees under BENEV’s company profile on SEDAR at http://www.sedar.com.
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