PE-backed Velvet Energy to acquire Iron Bridge for $142 mln

Velvet Energy Ltd has agreed to acquire the issued and outstanding common shares of Iron Bridge Resources Inc (TSX: IBR), a Calgary-based oil and gas company focused on a Montney Oil play in Western Canada, for about $142 million in cash, including net debt.

Iron Bridge accepted the revised $0.845 per share offer from Velvet, which improves on a $0.75 per share proposal made earlier this year. Iron Bridge had urged its investors to reject the first bid.

Iron Bridge shareholders, directors and officers accounting for about 35 percent of the company’s shares agreed to support the modified deal.

Velvet, a Calgary-based oil and gas explorer and producer, is backed by Warburg PincusTrilantic Capital Partners1901 Partners Management and Canada Pension Plan Investment Board.


Velvet Energy and Iron Bridge Resources Agree to Terms of Friendly Transaction with Unanimous Approval from Iron Bridge’s Board of Directors

All Iron Bridge Directors & Officers and Certain Shareholders Commit to Tender 35% of the Total Common Shares Outstanding

September 10, 2018

Velvet Energy and Iron Bridge agree to friendly transaction with unanimous Iron Bridge Board support, wherein Velvet has increased its cash consideration by 13% from $0.75 to $0.845 per Iron Bridge common share
Including the assumption of net debt of $9.0 million and net proceeds from dilutive securities, total cash consideration from Velvet is approximately $142 million
Iron Bridge shareholders and all directors and officers, accounting for approximately 35% of outstanding Iron Bridge common shares, have committed to tender their shares in support of Velvet’s all-cash offer
Shareholders can tender today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at

CALGARY, Alberta, Sept. 10, 2018 (GLOBE NEWSWIRE) — Following a friendly negotiation with Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”), Velvet Energy Ltd. (“Velvet”, “we”, “us” or “our”) today announces that it has modified its May 22, 2018 offer to purchase all of the issued and outstanding common shares of Iron Bridge (the “Original Offer”) to increase the cash consideration payable for each Iron Bridge common share from $0.75 to $0.845 (the “Amended Offer”). Total cash consideration payable by Velvet under the Amended Offer, including the assumption of estimated net debt of $9.0 million and net proceeds from dilutive securities, is approximately $142 million.


After consultation with its financial advisor, the Iron Bridge Board of Directors has determined that the Amended Offer is in the best interest of Iron Bridge and is fair from a financial point of view, to its common shareholders, and unanimously recommends that Iron Bridge shareholders accept the Amended Offer. All of Iron Bridge’s officers and directors, as well as certain shareholders including Maple Rock Capital Partners and Bison Interests, LLC and their respective affiliates and principals, have entered into agreements with Velvet pursuant to which they have committed to tender all of their Iron Bridge common shares in favour of (and to otherwise support) the Amended Offer. These lock-up agreements represent approximately 35% of Iron Bridge’s common shares.

Ken Woolner, Velvet Energy’s President & CEO, commented, “We are very pleased to have the engagement and unqualified support of Iron Bridge’s Special Committee, Board of Directors and its largest shareholders in defining a path that is a superior outcome for Iron Bridge shareholders. Our team looks forward to consolidating Iron Bridge’s land holdings in the Gold Creek area with the goal of optimizing our highly synergistic businesses.”


Pursuant to the terms of a support agreement between Velvet and Iron Bridge, Velvet has agreed to increase the cash consideration per Iron Bridge common share from $0.75 to $0.845. The Amended Offer represents a 13% increase in cash consideration for Iron Bridge common shares, and a significant 78% premium to the closing price of Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to Velvet submitting its original $0.75 offer letter to the Iron Bridge Board of Directors.

Velvet intends to file a notice of change and variation (the “Notice of Change and Variation”), which, among other things, will: (i) amend certain terms of the Original Offer (including the increase to the cash consideration payable per Iron Bridge common share from $0.75 to $0.845 for Iron Bridge shares taken-up under the Amended Offer); (ii) update certain information set out in the Original Offer and associated take-over bid circular (the “Original Offer and Circular“); and (iii) supplement information set out in the Original Offer and Circular, including lock-up agreements from certain shareholders, officers and directors and other additional context for the Amended Offer.

Velvet expects that its Notice of Change and Variation and an amended letter of transmittal (updated to reflect the additional cash consideration offered by Velvet) and Iron Bridge’s Notice of Change to Directors’ Circular will be filed on SEDAR under Iron Bridge’s profile at prior to the close of business on September 12, 2018. Under the Agreement, the expiry time of the Amended Offer has been extended to 5:00 p.m. (Toronto time) on September 24, 2018, or such later date as Velvet may require.


Iron Bridge shareholders can tender their shares immediately by contacting Kingsdale Advisors, Velvet’s Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 within North America and at 1-416-867-2272 outside of North America or by e-mail at


Velvet has retained BMO Capital Markets as its exclusive financial advisor and Bennett Jones LLP as its legal advisor. Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 28,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.


For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
Cell: 647-621-2646