/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES./
TORONTO, Dec. 2, 2015 /CNW/ - Kingsway Arms
Retirement Residences Inc. ("Kingsway" or the
"Company") (TSX.V: KWA) today announced that it has
entered into a purchase agreement (the "Purchase Agreement")
in connection with its reverse takeover transaction (the
"Reverse Takeover") previously announced on November 6, 2015. Pursuant to the Purchase
Agreement, the Company has agreed to acquire from Mainstreet
Investment Company, LLC, an affiliate of Mainstreet Property Group,
LLC (including its affiliates, "Mainstreet"), all of the
issued and outstanding shares of Mainstreet Health Holdings Inc.
("MHI Holdco") owned by Mainstreet (the "Mainstreet MHI
Holdco Shares") for an implied purchase price of approximately
US$15.6 million. The Mainstreet MHI
Holdco Shares will constitute approximately 75% of the issued and
outstanding shares of MHI Holdco (assuming that none of the
convertible debentures of MHI Holdco are exercised prior to the
completion of the Reverse Takeover).
MHI Holdco indirectly acquired a portfolio of 10 senior care
properties on October 30, 2015, and
has agreed to acquire an eleventh senior care property in 2016 (the
eleven properties are referred to as the "Symphony
Portfolio"). The initial 10 properties in the Symphony
Portfolio were acquired for a purchase price of approximately
US$268.4 million, plus approximately
US$7.8 million for expenses. The
purchase price for the eleventh senior care property, located in
Hanover Park, Illinois, (the
"Hanover Park Property") which is anticipated to be acquired
in early 2016, will be approximately US$34.1
million, plus expenses.
The Purchase Agreement contains customary representations and
warranties, covenants and conditions for a transaction of this
kind, including (among others) those described below. Concurrently
with Kingsway entering into the Purchase Agreement, the directors,
executive officers and certain shareholders of Kingsway, who in the
aggregate beneficially own approximately 45% of the outstanding
common shares of Kingsway (on a non-diluted basis), have agreed,
pursuant to voting and support agreements, to vote their common
shares in favour of the Reverse Takeover.
Shareholders will be asked to approve the Reverse Takeover at a
special meeting of shareholders. The Purchase Agreement provides
that completion of the Reverse Takeover is subject to a number of
conditions, including but not limited to, approval by the TSX-V and
the shareholders of Kingsway, certain approval rights in favour of
the security holders (other than Mainstreet) of MHI Holdco not
having been exercised, execution of the management agreement and
development agreement, there not having been a material adverse
effect in respect of the Company, the operators of the Symphony
Portfolio confirming that they will provide Kingsway with, and
consent to the filing of, certain financial statements and
management discussion and analysis, and other conditions that are
customary for a transaction of this kind. The Reverse Takeover
cannot close until the required shareholder approval is obtained
and the conditions in the Purchase Agreement are satisfied or
waived. There can be no assurance that the Reverse Takeover will be
completed as proposed or at all.
As previously disclosed, the Purchase Agreement provides that,
at the meeting to approve the Reverse Takeover, shareholders will
also be asked to consider a number of additional items in
connection with the Reverse Takeover.
Investors are cautioned that, except as disclosed in the
Management Information Circular to be prepared in connection with
the Reverse Takeover, any information released or received with
respect to the Reverse Takeover may not be accurate or complete and
should not be relied upon. Trading the securities of Kingsway
should be considered highly speculative.
About Mainstreet
Mainstreet is a national company specializing in real estate
development, value investments and health care. As the nation's
largest developer of transitional care properties, Mainstreet has
been recognized by Senior Housing News, winning the Architecture
& Design Award in 2013 and 2014, and has been named to the Inc.
500/5000 five times since 2010. For additional information, visit
www.mainstreetinvestment.com.
Completion of the Reverse Takeover is subject to a number of
conditions, including TSX-V acceptance and disinterested
shareholder approval. The Reverse Takeover cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Reverse Takeover will be completed as proposed
or at all.
Neither the TSX-V nor any securities regulatory authority has in
any way passed upon the merits of the Reverse Takeover described in
this press release.
Neither the TSX-V nor its Regulation Services Provider (as that
term is defined in the policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this news
release.
Forward-Looking Statements
Certain information in this press release contains
forward-looking statements or information ("forward looking
statements"), including details about the Reverse Takeover. By
their nature, forward-looking statements are subject to numerous
risks and uncertainties, some of which are beyond the Company's
control, including the impact of general economic conditions,
industry conditions, currency fluctuations, environmental risks,
operational risks, competition from other industry participants,
stock market volatility, the risks that the parties will not
proceed with the Reverse Takeover, that the conditions for
completion of the Reverse Takeover will not be satisfied or waived,
that the conditions for completion of the acquisition of the
Hanover Park Facility by MHI Holdco will not be satisfied or
waived, that the ultimate terms of the Reverse Takeover will differ
from those that are currently contemplated and the ability to
access sufficient capital from internal and external sources.
Although the Company believes that the expectations in its
forward-looking statements are reasonable, its forward-looking
statements have been based on factors and assumptions concerning
future events which may prove to be inaccurate. Those factors and
assumptions are based upon currently available information. Such
statements are subject to known and unknown risks, uncertainties
and other factors that could influence actual results or events and
cause actual results or events to differ materially from those
stated, anticipated or implied in the forward-looking statements.
Accordingly, readers are cautioned not to place undue reliance on
the forward-looking statements, as no assurance can be provided as
to future results, levels of activity or achievements. Risks,
uncertainties, material assumptions and other factors that could
affect actual results are discussed in our public disclosure
documents available at www.sedar.com. Furthermore, the
forward-looking statements contained in this document are made as
of the date of this document and, except as required by applicable
law, the Company does not undertake any obligation to publicly
update or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise.
The forward-looking statements contained in this document are
expressly qualified by this cautionary statement.
SOURCE Kingsway Arms Retirement Residences Inc.