Velan Holding sells its majority stake in Velan Inc. to Birch Hill for C$204M

On January 14, 2026, Velan Holding Co. Ltd. (“Velan Holding”), the controlling shareholder of Velan Inc. (“Velan”), agreed to sell its majority stake in Velan to funds managed by Birch Hill Equity Partners Management Inc. (“Birch Hill”) for aggregate gross proceeds of C$203,922,040.80 million at a price of C$13.10 per share (the “VH Transaction”). The shares represent about 72.1% of Velan’s outstanding shares and 92.8% of its voting rights. As part of a pre‑closing reorganization, 2,290,075 multiple voting shares will be converted into subordinate voting shares, after which 13,276,492 multiple voting shares and 2,290,076 subordinate voting shares will be sold. The VH Transaction is expected to close in the first half of 2026, subject to required regulatory approvals and customary closing conditions, and is not subject to any financing condition or approval by Velan shareholders. Birch Hill will acquire the shares under the private agreement exemption in National Instrument 62‑104.

Velan is not a party to the VH Transaction but has entered into a cooperation agreement with Birch Hill to facilitate the consummation of the VH Transaction, including the obtaining of applicable regulatory approvals. The Company’s special committee of independent directors supervised a review of strategic alternatives and recommended that the Board of Directors facilitate the VH Transaction and enter into the cooperation agreement. Velan has estimated approximately C$12 million in transaction‑related fees and approximately C$5 million in change‑of‑control costs, of which C$4 million has been paid or accrued. Velan will suspend dividends until the earlier of the closing of the VH Transaction or the termination of the cooperation agreement.

At closing, Velan will enter into an investor rights agreement with Birch Hill under which Birch Hill and its affiliates will have the right to nominate up to four of seven directors so long as they hold more than 40% of Velan’s voting rights, and the Board is expected to be reduced to seven directors.

Velan, founded in Montreal in 1950, is a global manufacturer of industrial valves with sales of US$295 million, operations in nine countries, and approximately 1,200 employees.

Birch Hill is a Toronto-based Canadian private equity firm with more than C$6 billion in capital under management and a 30‑year investment track record.

McCarthy Tétrault LLP advised Velan Holding with a team led by Patrick Boucher, that included Hadrien Montagne, Laura Fabi, Yassine Khadir (M&A; Capital Markets) and Dominic Therrien (Competition).