TORONTO, Nov. 21, 2017 (GLOBE NEWSWIRE) -- Lorne Park Capital Partners Inc. (TSXV:LPC) (“ LPCP ”) is pleased to announce that it has entered into agreements (“ Royalty Repurchase Agreements ”) to repurchase for cancellation two 5% royalties payable in respect of LPCP’s total consolidated annual revenue (each an “ Executive Royalty ”).
The Executive Royalties were originally granted by Bellwether Investment Management Inc. (“ Bellwether ”), LPCP’s operating subsidiary to Robert Sewell and Stephen Meehan, respectively, on April 1, 2013. The Royalty Repurchase Agreements provide for the purchase by LPCP of each Executive Royalty for 2,500,000 common shares at a deemed issue price of $0.40 per share, for total consideration of $1,000,000 per Executive Royalty.
LPCP has also repurchased a 10% royalty affecting the net revenue arising from certain adviser recruitment services provided by EWA Capital Partners Inc. (“ EWA ”) and retained LPCP and its subsidiaries (the “ EWA Royalty ”). The EWA Royalty was originally granted by LPCP to EWA effective January 1, 2015, and was amended effective August 1, 2016. LPCP repurchased the EWA Royalty for $1,250,000 in cash on November 21, 2017.
LPCP’s payment obligations pursuant to the Executive Royalties and EWA Royalty have rapidly increased as a result of revenue growth, and management expects such increases to continue. By repurchasing the Executive Royalties and EWA Royalty, LPCP will terminate variable payment obligations in exchange for one-time liquidated payments, resulting in potentially significant cost savings and permitting LPCP to conserve future revenue to fund growth and operations.
The direct or indirect interests of certain related parties of LPCP in the repurchase by LPCP of the Executive Royalties and the EWA Royalty constitute such transactions a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”). Robert Sewell is the President and Chief Executive Officer, a director, and a control person of LPCP. Stephen Meehan, is the Chairman and a control person of LPCP, as well as a director, officer, and beneficial owner of EWA. Christopher Dingle, a director of LPCP, is a director of EWA. MI 61-101 requires that, unless exempted, a “related party transaction” is subject to certain formal valuation and minority shareholder approval requirements. LPCP is relying on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 available because at the time the transactions were agreed to, neither the fair market value of, nor the fair market value of the consideration for, the Executive Royalties and the EWA Royalty, exceeded 25 per cent of LPCP’s market capitalization.
Pursuant to TSX Venture Exchange (“ TSXV ”) policies, the issuance of common shares to Messrs. Sewell and Meehan pursuant to the Royalty Repurchase Agreements is subject to the TSXV and disinterested shareholder approval. LPCP will seek disinterested shareholder approval at a special meeting of shareholders to be held on December 21, 2017. Assuming that such approvals are received and all other conditions are satisfied, the repurchase of the Executive Royalties will close on January 2, 2018, or such other date as may be agreed by LPCP and Mr. Sewell or Mr. Meehan, as applicable.
About Lorne Park Capital Partners Inc.
LPCP was created to bring together boutique investment management and wealth advisory firms in order to deliver robust, cost effective investment solutions to affluent investors, foundations, estates and trusts. LPCP’s unique strategy creates better alignment between investment managers and wealth advisors while providing them with additional resources to accelerate their growth.
For further information, please contact:
Robert Sewell Chief Executive Officer Lorne Park Capital Partners Inc. bob.sewell@lpcp.ca (905) 337-2227
Cautionary Notes
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, “plan”, and other similar expressions. Forward looking information in this news release includes, without limitation, statements about TSXV and disinterested shareholder approvals, completion of the Executive Royalty repurchase transactions, expected benefits of repurchasing the Executive Royalties and the EWA Royalty, and LPCP’s objectives, goals and future plans. Forward-looking information addresses possible future events, conditions and financial performance based upon management's current expectations, estimates, projections and assumptions. In particular, the forward-looking information contained in this news release reflects assumptions about the timing and results of regulatory and disinterested shareholder approval of the Executive Royalty repurchase transactions. Management of LPCP considers the assumptions on which the forward-looking information contained herein are based to be reasonable. However, by its very nature, forward-looking information inherently involves known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such information. Such risks include, without limitation, failure to obtain regulatory or disinterested shareholder approvals. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. LPCP disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
