Equity Financial Holdings Inc. taken private by Smoothwater Capital Corporation

Date Closed

December 21, 2017

Lead Office

Toronto

Value

55.00 Million CAD

On December 21, 2017, Equity Financial Holdings Inc. (“Equity Financial”) announced that Smoothwater Capital Corporation ("Smoothwater") has completed the acquisition of all the outstanding common shares of Equity Financial for $10.25 per share in cash pursuant to a plan of arrangement. Smoothwater held approximately 34.6% of the outstanding common shares of Equity Financial and the CEO of Smoothwater was the Chairman of Equity Financial. Smoothwater initially proposed a transaction at $9.75 per share. Smoothwater had secured commitments from shareholders holding approximately 36.2% of the outstanding common shares to vote in favour of the Smoothwater transaction. The Special Committee of the Board of Directors of Equity Financial conducted a sale process in accordance with a “go-shop” provision negotiated in the arrangement agreement with Smoothwater. Two interested third parties submitted written expressions of interest at prices exceeding the Smoothwater offer which resulted in Smoothwater increasing its offer price by $0.50 to $10.25. The interested parties continued to express interest in pursuing a superior transaction but certain Equity Financial shareholders subsequently executed hard lock-up agreements that precluded the viability of any alternative transaction.

McCarthy Tétrault LLP advised the Special Committee of the Board of Directors of Equity Financial with a team led by Robert Hansen and David Woollcombe that included Matthew Harris (Business), Barry Ryan (Financial Services) and Geoff Hall (Litigation).

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