CGGZ.UN Canaccord Genuity Growth II Corp

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

Transaction provides CGGZ shareholders with exposure to a very attractive segment of the electric vehicle market

• Well positioned for early leadership in the mass-production of next-generation electric powersports vehicles and fully integrated modular powertrain technology.
• Growth plans include expanding in manufacturing and distribution capability to fulfill demand for high-performance powersports vehicles with reduced environmental impact.
• Qualifying Acquisition values Taiga at a pre-money valuation of $300 million.
• Combined pro forma implied market capitalization of $537 million¹ including a $100 million oversubscribed and upsized private placement anchored by institutional investors including Northern Private Capital.
• Transaction and Private Placement expected to result in approximately $185 million in net cash proceeds available to pursue Taiga's fully-funded growth strategy.²
• Combined company to be led by Samuel Bruneau, Chief Executive Officer and Co-Founder of Taiga Motors, and Taiga's current management team.
• Completion of the transaction is expected in April 2021, subject to stock exchange approval and other customary closing conditions.

TORONTO and MONTREAL, Feb. 17, 2021 /CNW/ - Canaccord Genuity Growth II Corp. (TSX: CGGZ.UN) (NEO: CGGZ.UN) ("CGGZ" or the "Corporation"), a special purpose acquisition company, and Taiga Motors Inc. ("Taiga") are pleased to announce the proposed merger transaction (the "Merger") between the Corporation and Taiga. The Merger will constitute the Corporation's qualifying acquisition (the "Qualifying Acquisition").

The Corporation also announces a $100 million private placement (the "Private Placement") to fund Taiga's growth strategy, working capital and general corporate purposes along with remaining funds from CGGZ's $102 million of escrowed funds.

"We are excited to present this qualifying acquisition to our shareholders and we believe that Taiga Motors provides a compelling opportunity to participate in a new segment of the electric vehicle market," said Michael Shuh, Chairman and Chief Executive Officer of Canaccord Genuity Growth II Corp. "We are confident that the Taiga team is positioned to take early leadership in this segment and has demonstrated a clear path for growth. We look forward to supporting the Taiga team as they begin their journey as a public company."

Taiga Motors Co-Founder and CEO Sam Bruneau added: "Taiga's mission is to revolutionize the powersports industry with all-electric, off-road vehicles that outperform peers without sacrificing the environment. We are a product first company that believes a mass market shift towards electrification in powersports can only be achieved by building electric vehicles offering superior performance at a competitive price when compared to class leading combustion alternatives. With the funds from this transaction, we plan to accelerate our existing production capabilities and execute on our pre-orders while moving full speed ahead with plans for a second, mass-production facility, which will significantly increase our capacity by 2025. As the only mass-production-ready electric powersport vehicle manufacturer, we will continue to push technological boundaries with an aim to offer class leading vehicles in this segment and capitalize on the rise in consumer interest in electric vehicles and related technologies."

Northern Private Capital Chief Investment Officer Andrew Lapham commented, "We look for innovative companies that have the potential to disrupt industries and believe that Taiga's years of work developing its fit for purpose-built electric drivetrain technology positions it to do just that to the powersports industry. We are thrilled to be investing alongside Sam and his management team as they build what we think will become the premier manufacturer of powersports EVs."

In connection with the Closing, it is the Corporation's intention to rename itself Taiga Corporation / Corporation Taiga.

Following the closing of the Merger ("Closing"), Taiga Corporation will be led by Samuel Bruneau, Taiga's current Chief Executive Officer and Co-Founder, and Taiga's current management team.

The Corporation's currently issued and outstanding Class A restricted voting units (the "Class A Restricted Voting Units"), which are each comprised of one Class A restricted voting share (the "Class A Restricted Voting Shares") and one-half of a share purchase warrant (the "Warrants"), are listed on the Toronto Stock Exchange (the "TSX") and the Neo Exchange Inc. (the "NEO").

It is a condition of Closing that the New Taiga Common Shares (as defined below) and the Warrants be listed on the Toronto Stock Exchange (TSX). The Corporation has reserved the symbols "TAIG" and "TAIG.W" for the common shares and warrants, respectively.

Taiga Motors Investment Highlights

• Access to a $50 Billion Powersports Market: Growing environmental concerns have expedited demand for the electrification of passenger vehicles and commercial equipment, with off-road vehicle electrification as the next logical step. Aggregate sales from the top five manufacturers of snowmobiles, personal watercraft, and side-by-side vehicles in 2019 and International Council of Marine Industry Associations data indicate a $50 billion³ market opportunity for snowmobiles, personal watercrafts, other recreational marine applications, and side-by-side vehicles, with $400 billion⁴ of upside identified in adjacent applications such as other off-road vehicles, motorcycles, agriculture and commercial vehicles, construction and heavy machinery, and lightweight aviation.
• Cutting Edge Technology: Taiga offers a modular hardware and software platform that has been designed to simplify its production and assembly process and decrease development time for new electric vehicle models. The electric powertrain currently used in Taiga's snowmobiles and personal watercrafts is the fourth generation of Taiga's electric powertrain technology, developed through years of innovation, R&D and interactive field testing.
• Early Entrant Advantage in Mass Production of Electric Powersports Vehicles: Taiga management believes it is the only electric-focused powersports vehicle manufacturer positioned to commence mass production and distribution of its offering in the near or medium term. Taiga Management believes that Taiga holds a significant advantage over other potential all-electric powersports manufacturers based on an estimated minimum three-year research and development time frame to design, pilot, validate and move to mass production of electric powersports vehicles.
• Compelling Unit Economics Encourage Consumer Adoption: Taiga's snowmobiles and personal watercrafts offer a significantly lower total cost of ownership relative to traditional internal combustion alternatives. Data from applicants to Taiga's fleet program, as well as model estimates, indicate a potential average annual savings of over $2,000 per vehicle for snowmobile fleet operators.⁵ Taiga's proprietary telematics fleet management software provides ancillary opportunities to generate accretive, high margin, SaaS revenues.
• Transformational Roadmap for Achieving Scale: Taiga currently operates in a 50,000 square foot R&D assembly facility in Montréal, Québec, which is estimated to ramp-up production capacity to 2,000 vehicles per year by the second half of 2021. Taiga also has plans to build an approximately 340,000 square foot mass-production assembly facility over the coming years. Taiga's planned mass-production facility is anticipated to operate at peak capacity of 60,000 vehicles and 20,000 powertrains per annum by 2025.⁶ Additional economies of scale may be driven by Quebec's multi-pronged $7 billion electrification strategy, which is engineered to mitigate supply chain risk and provide access to a highly skilled labor force of more than 120,000 people.
• Dealer and Customer Demand: To date, 760+ local and international dealers have applied to carry Taiga's products, and more than 200 commercial fleet operators have submitted applications to Taiga's fleet program. To date, Taiga has received over 1,400 snowmobile and personal watercraft pre-orders.

Summary of the Merger

The Corporation, its sponsor CG Investments Inc. III (the "Sponsor"), and a subsidiary created to facilitate the acquisition (the "Merger Sub"), have entered into a merger agreement (the "Merger Agreement") with Taiga dated February 17, 2021. The Merger Agreement provides for the acquisition by the Corporation of all the issued and outstanding shares of Taiga by way of a three-cornered amalgamation of Taiga with the Merger Sub.

In consideration for the acquisition of Taiga, common shares of the Corporation (the "New Taiga Common Shares") will be issued to the existing shareholders of Taiga. The Merger values Taiga at $300 million on a pre-money basis and implies a market capitalization of $537 million based on the Private Placement offering price of $3.00 per share. In connection with the Merger, certain outstanding options to acquire Taiga shares will be exchanged for options to acquire New Taiga Common Shares and outstanding warrants to acquire Taiga shares will be exchanged for warrants to purchase New Taiga Common Shares. As a result of the Merger, Taiga will become a wholly-owned subsidiary of New Taiga.

As the Merger constitutes the Corporation's qualifying acquisition, holders of the Class A Restricted Voting Units have the right (conditional on the Closing) to redeem all or a portion of their Class A Restricted Voting Units, provided that they deposit their Class A Restricted Voting Units for redemption prior to the deadline for such announcements, which will be publicly disclosed by the Corporation once determined.

In connection with the Merger, the Class A Restricted Voting Shares underlying the Class A Restricted Voting Units not required to be redeemed will convert into New Taiga Common Shares on a one for one basis. The New Taiga Common Shares and the Warrants will then separate, and the New Taiga Common Shares and the Warrants will trade separately. It is a condition of Closing that the New Taiga Common Shares and the Warrants be listed on the TSX. The Corporation has reserved the symbols "TAIG" and "TAIG.W" for the New Taiga Common Shares and Warrants, respectively.

The Merger is subject to the satisfaction of customary conditions, including TSX and NEO approvals. Completion of the Merger is currently expected to occur in April 2021.

Summary of the Private Placement

The Private Placement is of $100 million of non-voting common shares of CGGZ Finance Corp. ("CGI"), a wholly-owned subsidiary of the Corporation, at a price of $3.00 per common share (the "CGI Shares"). The closing of the Private Placement will occur contemporaneously with the Closing, and, in connection with the Closing, the CGI Shares will be exchanged for New Taiga Common Shares on a one-for-one basis. The Private Placement is subject to customary conditions, including the closing of the Merger.

Timing and Additional Information

Pursuant to applicable rules, the Corporation will file with the Canadian securities regulatory authorities in each of the provinces and territories of Canada a non-offering prospectus containing disclosure regarding Taiga and the Merger. The preliminary long-form prospectus is expected to be filed with Canadian securities regulatory authorities in the coming days.

In connection with the proposed Qualifying Acquisition, the Corporation will call special meetings of the shareholders and warrantholders of the Corporation (the "Meetings"). At the Meeting of the Corporation's shareholders, shareholders will be asked to consider and approve (a) a consolidation of the issued and outstanding New Taiga Common Shares on a 5:1 basis, (b) a name change of the Corporation to Taiga Corporation / Corporation Taiga, and (c) the adoption of a new omnibus equity incentive plan. If required, the Corporation's shareholders may also be asked to approve an extension of the date by which the Corporation has to consummate a qualifying acquisition. At the Meeting of holders of the Warrants, such holders will be asked to consider and approve a consolidation of the issued and outstanding Warrants. Approval of the matters considered at the Meetings are not conditions to Closing.

Goodmans LLP is acting as legal counsel to the Corporation. Canaccord Genuity Corp. and National Bank Financial Inc. ("NBF") are acting as lead agents on the Private Placement, and Stikeman Elliott LLP is acting as legal counsel to the lead agents. NBF is also acting as sole financial advisor to Taiga. Fasken Martineau DuMoulin LLP is acting as legal counsel to Taiga.

Further details are set out in an investor presentation (the "Investor Presentation") and in the Merger Agreement, which will be filed shortly on SEDAR at www.sedar.com.

About Canaccord Genuity Growth II Corp.

The Corporation is a special purpose acquisition corporation incorporated under the laws of the Province of British Columbia for the purpose of effecting an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, share exchange, asset acquisition, share purchase, reorganization, or any other similar business combination involving the Corporation. The Corporation received $100.05 million of proceeds from its initial public offering which was completed on April 5, 2019. The gross proceeds of the offering were placed in an escrow account with Odyssey Trust Company immediately following the initial public offering and will be released upon consummation of its qualifying acquisition in accordance with the terms and conditions of the escrow agreement.

About Taiga Motors Inc.

Taiga is a Canadian based company, founded in 2015, that is reinventing the powersports landscape with breakthrough electric off-road vehicles. Through a clean-sheet engineering approach, Taiga has pushed the frontiers of electric technology to achieve extreme power-to-weight ratios and thermal specifications that outperform comparable high-performance combustion powersports vehicles.  The first models released include a lineup of electric snowmobiles and personal watercraft to deliver on a rapidly growing recreational and commercial customer demand who are seeking better ways to explore the great outdoors without compromise. For more information, visit www.taigamotors.ca.

Forward-Looking Statements

Certain statements in this news release are prospective in nature that constitute forward-looking information and/or forward-looking statements within the meaning of applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements include, but are not limited to, statements concerning the completion and proposed terms of, and matters relating to, the Merger, the Private Placement, the level of share redemptions, the listing on the TSX, the expected impact of the Merger on the business of Taiga, and Taiga's business plans, strategies and growth prospects, including the ramp up of its current facility and development of its second, and the associated manufacturing benefits in respect thereof, including increased capacity, and use of proceeds, as well as other statements with respect to management's beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, outlook, circumstances, performance or expectations that are not historical facts.

Forward-looking statements generally, but not always, can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "could", "would", "will", "expect", "intend", "estimate", "forecasts", "project", "seek", "anticipate", "believes", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events and the negative of any of these terms.

Forward-looking statements reflect management's current beliefs, expectations and assumptions and are based on information currently available to management. With respect to the forward-looking statements included in this news release, the Corporation has made certain assumptions with respect to, among other things, approval of various matters by the shareholders and warrantholders of the Corporation, the number of Class A Restricted Voting Units that will be subject to redemption in connection therewith, the anticipated receipt of any required regulatory approvals and consents (including the approval of the TSX and applicable securities regulatory authorities), the expectation that no event, change or other circumstance will occur that could give rise to the termination of the Merger Agreement or the Private Placement, the expenses and timing of Closing, that the Merger will have a positive effect on the business of Taiga, the addressable markets for Taiga's products, Taiga's competitive position and ability to commence mass production and distribution of its offering
in the near or medium term, Taiga's ability to economically produce and distribute its vehicles at scale and meet customers' business needs, Taiga's ability to execute its business strategy, Taiga's ability to manage its growth, Taiga's ability to accurately forecast supply and demand, Taiga's ability to secure and maintain strategic supply arrangements, Taiga's ability to protect its intellectual property, the rate of adoption of battery electric vehicles by customers in the markets in which Taiga operates, availability of favorable regulations and government incentives affecting the industry and markets in which Taiga operates, competition, including from established and future competitors, Taiga's ability to expand its production capacity, including through the development of a mass-production assembly facility, Taiga's ability to develop its distribution network, Taiga's ability to attract and retain management and other employees who possess specialized knowledge and technical skills, and the proposed use of the Corporation's escrowed funds and proceeds from the Private Placement, as well as assumptions concerning general economic and market growth rates, and interest rates and competitive intensity.

Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include, but are not limited to: conditions precedent or approvals required for the Merger and the Private Placement not being obtained; the potential benefits of the Merger not being realized; risks related to the achievement of Taiga's business objectives; Taiga not maintaining growth in the future; unfavourable economic conditions adversely affecting Taiga's operations; the interests of Taiga's directors and officers being different from or in addition to the interests of shareholders; the Merger being terminated in certain circumstances; and the risks set out under the heading "Risk Factors" in the Investor Presentation and to be set out in the preliminary prospectus. This list is not exhaustive of the factors that may impact the forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the forward-looking statements in this news release. As a result of the foregoing and other factors, there can be no assurance that actual results will be consistent with these forward-looking statements.

All forward-looking statements included in and incorporated into this news release are qualified by these cautionary statements. Unless otherwise indicated, the forward-looking statements contained herein are made as of the date of this news release, and except as required by applicable law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The securities to be issued in connection with the Private Placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and may not be offered or sold in the United States (as such term is defined in Regulation S under the U.S. Securities Act) without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

SOURCE Canaccord Genuity Growth II Corp.