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TORONTO,
Nov. 27, 2013 /CNW/ - Triumph
Ventures II Corporation (TSXV: TVT.P) ("Triumph" or the
"Company") is pleased to announce that it has entered into a
letter of intent (the "LOI") dated November 20, 2013 with Claxton Real Estate
Company Ltd. ("Claxton"), a corporation existing under the
laws of Ontario, which outlines
the general terms and conditions pursuant to which Triumph and
Claxton intend to complete a transaction that will result in
Triumph acquiring all of the issued and outstanding securities of
Claxton. The transaction will constitute Triumph's qualifying
transaction (the "Qualifying Transaction") under the
policies of the TSX Venture Exchange (the "Exchange").
Following completion of the Qualifying Transaction, it is
anticipated that the resulting issuer (the "Resulting
Issuer") will be a Tier I company.
Terms of Acquisition
Under the terms of the LOI, Triumph will acquire
all of the issued and outstanding securities of Claxton (including
the Private Placement Shares, as hereinafter defined) in exchange
for cash consideration and/or equity in Claxton, as further
described below (the "Transaction"). It is currently
anticipated that the Transaction will consist of a business
combination effected through a share exchange, merger,
amalgamation, arrangement or other similar form of transaction
which would result in Claxton, or such other entity that may be
created for completing the Transaction, amalgamating with or
becoming a wholly-owned subsidiary of Triumph. The final structure
of the Transaction is subject to receipt of definitive tax,
corporate and securities law advice satisfactory to both Triumph
and Claxton and their respective direct and indirect shareholders.
The Transaction will be memorialized in a definitive agreement
incorporating the terms of the LOI and other such terms negotiated
between the parties (the "Definitive Agreement").
Pursuant to the terms of the LOI, completion of
the Qualifying Transaction will be subject to a number of
conditions, including receipt of gross proceeds of not less than
$3,000,000 pursuant to the QT
Financing (as defined and described below); the absence of material
adverse changes in the business, affairs or operations of either
party; the receipt of all required shareholder, regulatory and
third party approvals, including conditional approval by the
Exchange of the Transaction; completion of all due diligence
reviews; execution of an asset management agreement between Claxton
and Claxton Capital Management Inc.; and the availability of
$100,000 of net free cash available
for use by the Resulting Issuer.
The proposed Qualifying Transaction is not a
"Non-Arm's Length Qualifying Transaction" within the meaning of
Policy 2.4 of the Exchange and, as such, shareholder approval is
not required, unless otherwise required by the Exchange.
Sponsorship of a qualifying transaction of a
capital pool company is required by the Exchange, unless exempt in
accordance with Exchange policies. Triumph intends to apply for an
exemption from sponsorship requirements, however, there is no
assurance that Triumph will obtain this exemption. In the event
that sponsorship is required, it is intended that PSSI (as defined
below) will be retained for this purpose.
A filing statement in respect of the proposed
Qualifying Transaction will be prepared and filed in accordance
with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less
than seven business days prior to the closing of the proposed
Qualifying Transaction. A press release will be issued once the
filing statement has been filed, as required pursuant to Exchange
policies or any other material changes occur.
Capitalization
There are currently 2,953,126 common shares of
Triumph ("Triumph Shares") issued and outstanding. There are
278,271 options issued and outstanding as incentive options that
entitle the holders thereof to acquire an aggregate of 278,271
Triumph Shares at a price of $0.20
per Triumph Share. There are 175,313 warrants issued and
outstanding that entitle the holders thereof to acquire an
aggregate of 175,313 Triumph Shares at a price of $0.20 per share.
There are currently 17,470,360 Claxton shares
("Claxton Shares") issued and outstanding and 6,666,667
Class A preferred shares issued and outstanding. There are
3,000,000 options issued and outstanding as incentive options that
entitle the holders thereof to acquire an aggregate of 3,000,000
Claxton Shares at a price of $0.20
per Claxton Share. The share capital
of the Resulting Issuer will depend on the form of the Transaction
and will be set out in the Definitive Agreement.
QT Financing
It is a condition of the LOI that prior to or
concurrent with the completion of the Qualifying Transaction,
Claxton shall complete a brokered private placement (the "QT
Financing"), for minimum proceeds of $3,000,000 and maximum proceeds of $5,000,000 through the sale of Claxton Shares
(the "Private Placement Shares") on a commercially
reasonable best efforts basis. Claxton will use the proceeds of the
QT Financing for further acquisitions and general working capital
purposes.
Portfolio Strategies Securities Inc.
("PSSI") has been appointed lead agent of Claxton. PSSI and
Claxton intend to enter into an engagement letter in this
connection in short order. It is intended that PSSI shall receive
aggregate cash fees equal to 9% of the gross proceeds raised
pursuant to the QT Financing and, conditional upon the completion
of the Qualifying Transaction, warrants equal to 6% of the number
of the Private Placement Shares sold under the QT Financing (the
"Broker Warrants"). Each Broker Warrant shall be exercisable
into one Claxton Share at
$0.20 per Claxton Share for a period of 24 months from the
earlier of the completion of the Qualifying Transaction and the
date that the Claxton Shares become listed and posted for trading.
PSSI will be permitted to conduct a full due diligence
investigation of Claxton before the closing of the QT
Financing.
Claxton
Claxton was formed under the laws of the
Province of Ontario on
April 29, 2013 for the purposes of
acquiring income producing properties in the United States in the industrial, office
and retail asset classes. The major shareholders that control
Claxton are Sean Cleary who resides
in Oakville, Ontario; Gravitas
Financial Inc., a company formed under the laws of the Province of
Ontario with offices in
Toronto, Ontario; and 2380663
Ontario Inc., as company formed under the laws of the Province of
Ontario and controlled by
David Hopkinson, who resides in
Oakville, Ontario.
On October 2,
2013, Claxton (via its wholly-owned limited partnerships,
Claxton Real Estate Limited Partnership and Claxton Real Estate
(US) Limited Partnership 1), acquired a 100% fee interest in a
portion of Palm Valley Pavilions East, a Target Anchored Shopping
Center in Goodyear, Arizona. This
acquisition constitutes Claxton's first acquisition of a business
asset. It is Claxton's intention to continue to invest in other
income producing properties, targeting external growth in markets
that offer high quality commercial real estate at compelling
relative valuations.
Management of Claxton believes that investment
in a US commercial real estate platform that is diversified with
respect to both geography and asset class has the potential to
deliver attractive risk-adjusted returns, especially given the
volatile global economy and prevailing low interest rate
environment.
Claxton Financial Information (based
on audited financial statements)
For the period from April
29, 2013 to August 31, 2013,
Claxton had total assets of $249,492
and working capital of $26,699.
Proposed Management and Directors
Upon completion of the Qualifying Transaction,
David Hopkinson, Sean Clearly,
Stephen Gledhill, David Whalley, Eric
Taferner, Steve Dulmage and
Pierre Gagnon will assume management
responsibility of the Resulting Issuer. David Hopkinson, Stephen
Gledhill, Sean Clearly, David
Whalley and Eric Taferner
currently serve as directors and/or senior officers of Claxton and
Claxton Capital Management Inc. Brief descriptions of these
individuals are set out below. Steve
Dulmage is currently a director of Triumph and Pierre Gagnon is currently a director and the
Secretary and Chairman of Triumph; their respective biographies are
available on SEDAR as part of the prospectus issued in relation to
the initial public offering of Triumph.
David
Hopkinson - President & Director: Mr. Hopkinson
is the President of Claxton and President and Managing Partner of
Claxton Capital Management Inc. Over the last 20 years, Mr.
Hopkinson has worked in Canada and
internationally as a senior investment specialist in international
real estate with a focus on portfolio management and strategy and
has directed over $800 million of
international real estate assets and over $2.5 billion of Canadian real estate assets. He
has extensive experience working within a number of investment
environments including pension funds, real estate operating
companies and fund managers for such organizations as OMERS, Oxford
Properties, Bentall Kennedy and AEW Europe (Curzon Global
Partners).
Sean Clearly - Chairman &
Director: Mr. Cleary is the Chairman of the Board of
Claxton and of Claxton Capital Management Inc. Over the last 25
years, Mr. Cleary has founded and scaled up companies across a
number of industries in Canada and
internationally with a specific focus on acquisitions, capital
markets, solving problems for growth entities and the development
of sustainable corporate strategy. To date, Mr. Cleary has helped
to build many management teams and boards and has structured
numerous financings, acquisitions and divestitures for growth
companies in Canada and
internationally.
Stephen
Gledhill - Secretary & Director: Mr. Gledhill is
the Chief Financial Officer of Claxton and Chief Financial Officer
and Managing Partner of Claxton Capital Management Inc. Mr.
Gledhill has over 25 years of financial-control experience, 8 years
of which was with a large pension fund, and acts as CFO for
multiple publically-traded companies. Since 2011, he has been the
Managing Director of RG Management Services Inc., an accounting,
administrative and corporate secretarial services company. In 1992,
he formed Keshill Consulting Associates Inc., a boutique management
consulting practice.
David
Whalley - Director: Mr. Whalley is a Director and
Partner of Claxton Capital Management Inc. Mr. Whalley has over 25
years of commercial real estate experience in landlord agency,
design build, office tenant representation and investment sales
experience as a senior vice president with Colliers International
in Toronto. Mr. Whalley has
successfully completed lease negotiations of several million square
feet of office space in North
America and internationally and has led greenfield and
suburban office developments, core office tower investment and
suburban office building acquisitions for end-users and investors
in Canada and the United States.
Eric
Taferner - Director: Mr. Taferner is Vice President
of Claxon and a partner of Claxton Capital Management Inc. Mr.
Taferner brings extensive operational experience rooted in 15 years
of property management with a primary focus in the residential
foreclosure market in southern Ontario and has directly managed a diverse
portfolio of over $100 million in
real property. Mr. Taferner has personally managed the acquisition
and disposition of assets for Tier 1 and Tier 2 banks, lawyers'
offices, sales agents and brokers, appraisers, collection
departments and insurance companies as well as a number of third
party contractors.
The Company has requested a halt in the trading
of the Company's shares until the Qualifying Transaction is
completed.
The Company will provide further details in
respect of the Qualifying Transaction, in due course by way of
press release.
Further Information
All information contained in this news release
with respect to Triumph and Claxton was supplied by the parties
respectively, for inclusion herein, and each party and its
directors and officers have relied on the other party for any
information concerning the other party.
Completion of the Qualifying Transaction is
subject to a number of conditions including, but not limited to,
Exchange acceptance and if applicable pursuant to Exchange
requirements, majority of the minority shareholder approval. Where
applicable, the Qualifying Transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Qualifying Transaction will be completed as
proposed, or at all.
Investors are cautioned that, except as
disclosed in the management information circular or filing
statement to be prepared in connection with the Qualifying
Transaction, any information released or received with respect to
the Qualifying Transaction may not be accurate or complete and
should not be relied upon. Trading in the securities of a capital
pool company should be considered highly speculative.
Neither the Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
Exchange) has in any way passed upon the merits of the proposed
transaction and has neither approved nor disapproved of the
contents of this release.
This press release does not constitute and
the subject matter hereof is not, an offer for sale or a
solicitation of an offer to buy, in the
United States or to any "U.S Person" (as such term is
defined in Regulation S under the U.S. Securities Act of 1933, as
amended (the "1933 Act")) of any equity or other securities of the
Company. The securities of the Resulting Issuer to be issued in
connection with the QT Financing have not been registered under the
1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent
registration under the 1933 Act or an applicable exemption from the
registration requirements of the 1933 Act.
SOURCE Triumph Ventures II Corporation