SPROTT INC. ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENT WITH GLOBAL RESOURCE INVESTMENTS LTD., TERRA RESOURCE INVESTMENT MANAGEM
25 January 2011 - 12:28PM
PR Newswire (Canada)
TORONTO, Jan. 24 /CNW/ -- Rick Rule to Join Sprott Investment Team
and be Nominated to Board of Directors TORONTO, Jan. 24 /CNW/ -
Sprott Inc. (TSX:SII) ("Sprott") today announced the signing of a
definitive share exchange agreement (the "Agreement") with Arthur
Richards Rule IV and the Rule Family Trust U/A/D 12/17/98 (the
"Seller") for the acquisition (the "Transaction") of all of the
outstanding stock of Rule Investments, Inc. (the owner of Global
Resource Investments, Ltd.), Terra Resource Investment Management,
Inc. and Resource Capital Investment Corporation (collectively, the
"Global Companies"), as first announced by the Company on September
22, 2010. Closing is expected to occur in early February 2011,
subject to the timing of necessary regulatory approvals. "We
are pleased to have the well respected team of investment
professionals Rick has built join our organization, and look
forward to working with them to continue to deliver superior
investment performance to our clients and shareholders," commented
Eric Sprott, Chairman of Sprott. "With our due diligence activities
complete, and integration planning underway, our combined team will
be moving quickly to offer compelling new investment opportunities
to Canadian investors, while continuing to grow our client base
both in the United States and globally," said Peter Grosskopf, CEO
of Sprott. "We remain convinced that our objectives of expanding
our investment management capabilities, increasing our US
distribution capabilities, and diversifying our asset and earnings
profile will be well served by having the Global Companies join the
Sprott organization. Combined, the companies' Assets Under
Management would have been approximately $9.0 billion as of
December 31, 2010." "Much like the mutual funds and hedge funds
managed by Sprott Asset Management, the Global Companies' pooled
investment vehicles have performed exceptionally well in 2010,
highlighting the degree of investment expertise that the Global
Companies bring to the combined organization," added Mr. Grosskopf.
"The entire team at the Global Companies is delighted to be joining
Sprott Inc. We expect that our clients will benefit from the help
of the Sprott team, and that this will be a true win-win for all
stakeholders; clients, employees, and shareholders of both
organizations," commented Rick Rule, founder of the Global
Companies. Transaction Terms Sprott will issue 20 million common
shares in the capital of Sprott ("Sprott Shares") in consideration
for the acquisition of the Global Companies. Approximately 500,000
of the Sprott Shares will be received by employees of the Global
Companies after closing. The Seller has agreed to forego any
general quarterly or special dividends, if any, associated with
Sprott's 2010 financial performance. In addition, the Seller and
certain current and future employees of the Global Companies will
further be entitled to receive, on the date that is five years
following the closing of the Transaction, additional shares (the
"Earn-out Shares") based on the aggregate EBITDA of the Global
Companies during such five year period, and the performance of the
Global Companies relative to the balance of Sprott. For every
dollar that the aggregate EBITDA exceeds US$40 million, the Seller
and certain current and future employees shall receive 0.145455
Earn-out Shares, up to a maximum of eight million Earn-out Shares
in aggregate. Subject to certain conditions, including
minimum AUM thresholds at the Global Companies, if aggregate EBITDA
of US$95 million is reached prior to the end of such five-year
period, the Seller and certain employees as noted above shall
receive all the Earn-out Shares at such time; provided that the
Seller and these specific employees shall not receive such shares
prior to three years after the closing of the Transaction.
Each of the Seller and the employees of the Global Companies
receiving Sprott Shares or Earn-out Shares will enter into lock-up
agreements with Sprott whereby they will agree not to directly or
indirectly sell their shares without Sprott's consent, subject to
certain conditions, with one-third of such shares being released
from lock up every year for three years from the date of issuance.
Upon closing of the Transaction, Mr. Rule will join the investment
and management team at Sprott for a minimum three year term and
will be included on management's slate of nominees for the election
of directors at Sprott's next annual meeting of shareholders.
The Transaction is an arm's length transaction and is
subject to the approval of all applicable regulatory authorities,
including the Toronto Stock Exchange, as well as other third
parties, as necessary. Forward-Looking Statements This release
contains "forward-looking statements" which reflect the current
expectations of Sprott Inc. These statements reflect management's
current beliefs with respect to future events and are based on
information currently available to management. Forward-looking
statements in this press release include, but are not limited to,
the closing of the Transaction and the anticipated benefits from
the Transaction. Forward-looking statements involve
significant known and unknown risks, uncertainties and assumptions,
including with respect to the closing of the Transaction, the
timing and receipt of all applicable regulatory approvals and third
party consents, the anticipated benefits from the Transaction and
the satisfaction of other conditions to the completion of the
Transaction. Many factors could cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements that may be expressed
or implied by such forward-looking statements including, without
limitation, those listed under the heading "Risk Factors" in
Sprott's annual information form dated March 30, 2010 as well as
that the closing of the Transaction could be delayed if the
necessary regulatory approvals and third party consents are not
obtained within the timelines planned or the Transaction may not be
completed at all if these approvals are not obtained or any other
conditions to closing are not satisfied. Should one or more of
these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance or achievements could vary materially from
those expressed or implied by the forward-looking statements
contained in this release. Although the forward-looking statements
contained in this release are based upon what Sprott believes to be
reasonable assumptions, management cannot assure investors that
actual results, performance or achievements will be consistent with
these forward-looking statements. These forward-looking statements
are made as of the date of this release and Sprott does not assume
any obligation to update or revise them to reflect new events or
circumstances, except as required by law. About the Global
Companies The Global Companies are leading experts in the natural
resource investing sector providing both investment management and
specialized broker services. The Global Companies are led by Rick
Rule, a highly respected natural resources investor with over 35
years of experience in the investment industry, and have developed
a highly specialized team of resource investing experts, including
geologists and mining engineers. They offer their expertise through
pooled investment vehicles, managed accounts and brokerage accounts
and have delivered strong investment performance to their clients.
The Global Companies currently administer or manage more than
US$1.8 billion in assets. About Sprott Inc. Sprott Inc. is a
leading independent asset manager dedicated to achieving superior
returns for its clients over the long term. The company
currently operates through three distinct business units:
Sprott Asset Management LP, Sprott Private Wealth LP and Sprott
Consulting LP. Sprott Asset Management is the investment
manager of the Sprott family of mutual funds and hedge funds and
discretionary managed accounts; Sprott Private Wealth provides
wealth management services to high net worth individuals; and
Sprott Consulting provides management, administrative and
consulting services to other companies, including Sprott Resource
Corp. (TSX: SCP) and Sprott Resource Lending Corp. (TSX: SIL;
NYSE Amex: SILU). Sprott Inc. is headquartered in Toronto,
Canada, and is listed on the Toronto Stock Exchange under the
symbol "SII". For more information on Sprott Inc., please
visit www.sprottinc.com. To view this news release in HTML
formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/January2011/24/c4849.html
p align="justify"Investor contact information: (416) 203-2310 or 1
(877) 403-2310 or a href="mailto:ir@sprott.com"ir@sprott.com/a/p
Copyright
Sprott (TSX:SII)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sprott (TSX:SII)
Historical Stock Chart
From Jul 2023 to Jul 2024