Chesswood Group Limited (TSX:CHW) entered into an arrangement agreement to acquire Rifco Inc. (TSXV:RFC) for CAD 27.5 million on October 26, 2021. The transaction will be done by way of a statutory plan of arrangement under the Business Corporations Act (Alberta). Under the terms of the Agreement, each Rifco shareholder will receive consideration of CAD 1.28 for each Rifco Share held, to be satisfied either in cash or Chesswood common shares (with the number of Chesswood common shares to be determined based on the 10 day volume weighted average price (“VWAP”) determined five business days before the special meeting of Rifco shareholders to approve Transaction at election of the Rifco shareholder, representing aggregate consideration of approximately CAD 28 million on a fully diluted basis. Following closing, Rifco Shares would be delisted from TSX Venture Exchange. Rifco is subject to non-solicitation provisions, and in certain circumstances the Board may terminate the Agreement in favour of an unsolicited superior proposal, subject to the payment of a termination fee of CAD 1 million. If Chesswood breaches the agreement then it is required to pay Rifco an expense reimbursement payment of CAD 1 million.

The transaction is subject to approval of 66 2/3% of the votes cast by Rifco shareholders at the Special Meeting. The completion of the Transaction will also be subject to obtaining required court and other approvals, and satisfaction of closing conditions customary for a transaction of this nature. The Agreement includes customary deal-protection provisions and also subject to a right of Chesswood to match such superior proposal. The special committee of Rifco's Board of Directors have unanimously determined that the Transaction is in the best interests of Rifco and are recommending that Rifco shareholders vote in favour of the Transaction. Rifco's management is highly supportive of the transaction with Chesswood and the MBO group is no longer pursuing the acquisition of Rifco. A special committee of Rifco's Board of Directors was formed under the direction of Board member Sean Aylward to consider the August 10, 2021 non-binding acquisition proposal received by Rifco from certain members of Rifco's senior management team, and to review any acquisition proposals subsequently received by Rifco. The transaction is also subject to obtaining the Competition Act Clearance, TSX-V and regulatory approvals, and the TSX conditionally approving for listing all of the Purchaser Shares issuable to Rifco Shareholders pursuant to the arrangement. The Special Meeting will be held in December 2021. Rifco shareholder special meeting will be held on December 17, 2021. As of December 17, 2021, the shareholders of Rifco has approved the deal. The final court approval is currently scheduled to take place on January 10, 2022. On January 10, 2022, Court of Queen's Bench of Alberta approved the transaction. Transaction is expected to close in late December 2021 or in January 2022. As of December 17, 2021, the transaction is expected to close in mid-January 2022. As of January 11, 2022, the transaction is expected to close on January 14, 2022.

Raymond James Ltd. acted as exclusive financial advisor and provided fairness opinion to Rifco. Pierre Soulard of Miller Thomson LLP is acting as counsel to the Special Committee and Rifco. Gary Litwack and Catherine Samuel of McCarthy Tétrault LLP is acting as counsel to Chesswood in connection with the Transaction. Raymond James will receive a fixed fee for rendering its opinion, in addition to a separate fee for its advisory services.