TORONTO, March 11, 2021 /CNW/ - EFH Holdings
Inc. (the "Company" or "EFH") (TSXV: EFH) is
pleased to announce that it has entered into a letter of intent
with Cooke Holdings Inc. ("Cooke") to acquire the remaining
25% ownership of The Insurance Company of Prince Edward Island ("ICPEI") that the
Company currently does not own (the "Acquisition").
Terms of the Acquisition
Under the terms of the Acquisition, the Company will acquire
from Cooke all of the remaining issued and outstanding shares of
ICPEI not already owned by EFH (the "ICPEI Shares") for a
total cash consideration of approximately $6,315,000 (the "Purchase
Price").The Acquisition is an arm's length transaction and is
expected to close on or before April 1st,
2021.
Completion of the Acquisition is subject to a number of
conditions precedent, including but not limited to, the completion
to the satisfaction of EFH of due diligence, the negotiation and
execution of definitive documentation, and the approval of the TSX
Venture Exchange. Accordingly, there can be no assurance that the
Acquisition will be completed on the terms proposed above or at
all.
Concurrent Private Placement
As a condition to completing the Acquisition, the Company
intends to complete a non-brokered private placement financing of
up to $3,739,002 (the "Private
Placement"). The Private Placement will consist of the sale of
up to 2,633,100 common shares of the Company ("Shares") at a
price of $1.42 per Share.
The proceeds of the Private Placement will be held in escrow,
pending the Company receiving all applicable regulatory approvals
and will be used to pay the Purchase Price on the closing of the
Acquisition. If the Acquisition is not completed, the proceeds of
the Private Placement will be returned to the subscribers.
The Shares issued pursuant to the Private Placement will be
subject to a hold period of four (4) months and one day from the
date of closing of the Private Placement. In addition, the Private
Placement is subject to the approval of the TSX Venture
Exchange.
The Private Placement will constitute a "related party
transaction" as such term is defined by Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101"), given that certain insiders
of the Company have indicated their intention to subscribe for
Shares under the Private Placement. On closing of the Private
Placement, it is expected that certain insiders will subscribe for
an aggregate of $897,098 of Shares.
The Company is relying on the exemptions from the valuation and
minority shareholder approval requirements of MI 61-101 contained
in sections 5.5(a) and 5.7(1)(a) of MI 61-101, given that the fair
market value of the participation in the Private Placement by
certain insiders does not exceed 25% of the market capitalization
of the Company, as determined in accordance with MI 61-101. The
Private Placement has been approved by the independent directors of
the Company. The Company expects that it will not file a material
change report in respect of the Private Placement more than 21 days
before the expected closing date of the Private Placement as the
Company wishes to close the Private Placement on an expedited basis
for sound business reasons and in a timeframe consistent with usual
market practice for transactions of this nature.
About The Insurance Company of Prince Edward
Founded in 1987, The Insurance Company of Prince Edward Island offers market-leading
home, auto and commercial insurance solutions. Its products are
sold exclusively through a network of brokers across all three
Maritime Provinces and Quebec.
ICPEI has established a longstanding record of underwriting
profitability, rooted in its disciplined approach to risk
selection. On July 1, 2014, EFH
acquired 75% ownership of ICPEI.
About EFH Holdings Inc.
Founded in 1998, EFH Holdings Inc. operates in the property and
casualty insurance industry in Canada, providing personal and commercial
lines insurance exclusively through the broker channel. The Company
distributes insurance products through The Insurance Company of
Prince Edward Island. It trades on
the TSX Venture Exchange under the symbol EFH.
Forward-looking Information
This news release contains forward-looking information based on
current expectations. This information includes, but is not limited
to, statements about the targets, ongoing objectives, strategies,
timelines for completing the Acquisition and the Private Placement,
Purchase Price, amounts to be raised pursuant to the Private
Placement and outlook of EFH. These statements, which appear in
this press release generally can be identified by the use of
forward-looking words such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", "plan", "would", "should",
"could", "trend", "predict", "likely", "potential" or "continue" or
the negative thereof and similar variations.
This information is based upon certain material factors or
assumptions that were applied in drawing a conclusion or making a
projection as reflected in the forward-looking information. By its
nature, this information is subject to inherent risks and
uncertainties that may be general or specific. A variety of
material factors, many of which are beyond EFH's control, affect
the operations, performance and results of its business and could
cause actual results to differ materially from the expectations
expressed in any of this forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE EFH Holdings Inc.
