LOGiQ Asset Management Inc (TSX: LGQ) has agreed to acquire the issued and outstanding common shares of Toronto-based royalty financing firm Grenville Strategic Royalty Corp (TSX-V: GRC) on the basis of 6.25 shares of LOGiQ for each Grenville share. No financial terms were disclosed for the deal, which will see existing LOGiQ and Grenville shareholders together own about 33 percent and 67 percent of the combined business, respectively. Grenville’s Vernon Lobo said the deal will create a “solid financial platform” for supplying alternative financing to high-growth companies. Purpose Investments Inc acquired LOGiQ’s retail fund operation last year.
LOGiQ and Grenville to combine
TORONTO, March 12, 2018 /CNW/ – LOGiQ Asset Management Inc. (“LOGiQ”) (TSX:LGQ) and Grenville Strategic Royalty Corp. (“Grenville”) (TSXV:GRC) are pleased to announce that they have entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which LOGiQ has agreed to acquire all of the issued and outstanding common shares of Grenville (the “Grenville Shares”) on the basis of 6.25 common shares of LOGiQ (the “LOGiQ Shares”) for each outstanding Grenville Share (the “Transaction”).
The consideration to be received by Grenville shareholders reflects the relative values of each of LOGiQ and Grenville. Upon completion of the Transaction, existing holders of LOGiQ Shares and Grenville Shares will collectively own approximately 33% and 67% of the combined company, respectively.
LOGiQ and Grenville believe that on a combined basis, the companies together will offer a more effective and viable platform for enhancing shareholder value. “As we explored various options for LOGiQ shareholders, we believe Grenville and its business model, combined with LOGiQ’s institutional Global Advisory Sales platform, offers exciting growth opportunities and the potential to rebuild shareholder value” said Dr. Eldon Smith, LOGiQ’s Chairman. “Grenville’s renewed investment process, strong deal flow pipeline and investment structure are designed to return significant cash on cash yields to investors while participating in the growth of its portfolio companies. This model has been built to provide a win for Grenville’s shareholders and portfolio companies alike. Grenville’s recent success with companies such as Boardwalktech, an emerging enterprise Blockchain company based in California, and its significant equity position in cannabis franchisor Inner Spirit, are indicative of the quality of its deal flow and the upside potential of Grenville’s business model.”
Vernon Lobo, Chair of Grenville’s investment committee added: “We are delighted to be partnering with LOGiQ as we add scale to our business to allow us to take advantage of the compelling investment opportunities ahead of us. Both companies have worked very hard over the past year to address their challenges, and the combination of these businesses will provide us with a solid financial platform from which to build a value-creating business focused on providing alternative sources of financing to high growth companies throughout North America. We are encouraged by recent events in our portfolio, including the contract buyout concluded last week with phone repair company FIXT, and the going public transaction announced by Clear Blue Technologies, one of our earliest investees. We are also looking forward to partnering with Steve Mantle and his team at LOGiQ Global Partners as they continue to grow their business, which generates a consistent and growing revenue stream for the benefit of shareholders. We will be working on board and management configuration over the coming weeks.”
The board of directors of LOGiQ (the “LOGiQ Board”), based on the unanimous recommendation of a special committee of the LOGiQ Board, has unanimously approved the Transaction and recommends that holders of LOGiQ Shares vote in favour of the special resolution approving the continuance of LOGiQ from Alberta into British Columbia (the “Continuance”), which is required to complete the Transaction, and the ordinary resolution approving the issuance of LOGiQ Shares pursuant to the Transaction (the “Share Issuance”).
The board of directors of Grenville (the “Grenville Board”), based on the unanimous recommendation of a special committee of the Grenville Board, has unanimously approved the Transaction and recommends that holders of Grenville Shares vote in favour of the special resolution approving the Transaction.
Under the terms of the Arrangement Agreement, the Transaction will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the “BCBCA”).
The Transaction is subject to shareholder, TSX and Supreme Court of British Columbia approval, and the satisfaction of other customary closing conditions. LOGiQ and Grenville intend to complete the Transaction as soon as possible after all conditions have been met or waived.
The Transaction will require approval by at least 66⅔% of holders of the Grenville Shares represented in person or by proxy at a special meeting of holders of Grenville Shares to be called to consider the Transaction (the “Grenville Meeting”) and, if required, a simple majority of the votes cast by holders of Grenville Shares after excluding the votes cast by those persons whose votes may not be included under the Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.
The continuance of LOGiQ from Alberta into British Columbia will require approval by at least 66⅔% of holders of the LOGiQ Shares represented in person or by proxy at a special meeting of holders of LOGiQ Shares to be called to consider the Continuance and the Share Issuance (the “LOGiQ Meeting”). The issuance of the LOGiQ Shares pursuant to the Transaction will require approval by holders of a simple majority of LOGiQ Shares represented in person or by proxy at the LOGiQ Meeting, pursuant to the requirements of the TSX. Subject to any required regulatory and shareholder approvals, in connection with the completion of the Transaction, the LOGiQ Shares may be consolidated on a ratio to be determined by the parties.
Further details of the Transaction are set out in the Arrangement Agreement and will also be set out in the joint management information circular to be prepared in connection with the LOGiQ Meeting and the Grenville Meeting, both of which will be filed by LOGiQ and Grenville on SEDAR and will be available on their respective profiles at www.sedar.com.
Voting Support Agreements
All directors and officers of Grenville that are securityholders of Grenville, all directors and officers of LOGiQ that are securityholders of LOGiQ and certain other shareholders of LOGiQ have entered into customary voting support agreements to, among other things, vote in favour of the Transaction.
LOGiQ (www.logiqasset.com) provides investment management services to institutional investors through segregated managed accounts and pooled funds, and has an institutional global advisory sales platform providing pension funds, charities and endowment clients with access to leading institutional money managers from around the world. LOGiQ had assets under management or advisement and institutional advisory sales-related fee earning arrangements that are not managed or advised, totaling over $3.4 billion as at December 31, 2017.
Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments, buyouts from contracts and equity returns. The flexible royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.
For further information: Requests for further information should be directed to: LOGiQ Asset Management Inc.: Joe Canavan, President and Chief Executive Officer, email@example.com; Mary Anne Palangio, Chief Financial Officer, firstname.lastname@example.org, Phone: (416) 583-2300, 180 John Street, Toronto, ON M5T 1X5; Grenville Strategic Royalty Corp.: Steven Parry, Chief Executive Officer, steve@GrenvilleSRC.com, Phone: (416) 777-0383, 1 Adelaide Street East, Suite 3002, PO Box 171, Toronto, Ontario M5C 2V9
Photo courtesy of Reuters/Mark Blinch