Acasta Enterprises Inc. announces ISS endorsement of its qualifying acquisition and filing of final prospectus

Acasta Enterprises Inc. announces ISS endorsement of its qualifying acquisition and filing of final prospectus

Canada NewsWire

TORONTO, Dec. 6, 2016 /CNW/ - Acasta Enterprises Inc. (TSX: AEF) ("Acasta") today announced that leading shareholder advisory firm Institutional Shareholder Services Inc. ("ISS") has recommended approval of Acasta's qualifying acquisition (the "Qualifying Acquisition") of 100% of three businesses in two highly attractive sectors, alongside its launch as a long-term investment and private equity management firm. 

Acasta also announced that it has received a receipt for its final non-offering prospectus in connection with the Qualifying Acquisition.

ISS Endorsement

In a report issued on December 5, 2016, ISS recommends that shareholders of Acasta vote FOR the approval of the Qualifying Acquisition. ISS comments that: "…if the company's forecasts are accurate, the combined valuation of the initial portfolio and the private equity platform offers a significant upside for the company's public shareholders," in part of its report.

ISS also comments that: "…the proposed transaction makes strategic sense as it creates a portfolio with attractive platforms for growth in the strategically differentiated and distinct businesses that have strong management teams and that are being bought at compelling valuations. […] Moreover, the private label consumer staples platform might benefit from synergies related to cost optimization and cross-selling opportunities."

With regards to Acasta's contribution to the intial portfolio and transition to an asset manager, ISS comments that: "The company's management team is expected to provide significant contributions to both of the acquired platforms. […]  In addition, the acquisitions will enable the company to transform into a long-term investment and private equity management firm, which is expected to generate substantial management fees and carried interests."

The Qualifying Acquisition

The Qualifying Acquisition has an aggregate enterprise value of at least $1.1 billion at closing. Acasta estimates that, based on 2017 estimated results, the post-closing per share net asset value (NAV) ranges from approximately $11.43 to $14.45, the per warrant Black-Scholes value ranges from $3.20 to $5.37, and notes that the value attributable to the private equity business and the commercial aircraft funds could significantly increase Acasta's NAV per share in excess of these figures.

Aligned Structure

  • The owners and management teams of the three businesses are remaining in their current roles and will receive up to 64% of their consideration in Acasta shares, ensuring a strong alignment with Acasta shareholders and a commitment to continuing to build their respective businesses;
  • Acasta founders are demonstrating their confidence in the qualifying acquisition by voluntarily doubling their at risk promote shares from 25% to 50%, increasing the price hurdle for these shares from $13.00 to at least $15.00; and
  • Acasta founders have committed to buy an additional $15 million of Class B shares of Acasta at $10.00 per Class B share, raising their total commitment to Acasta to over $30 million, including their investment at the time of Acasta's initial public offering.

Shareholders Meeting and Closing

Acasta's special meeting of shareholders (the "Meeting") to approve the Qualifying Acquisition is scheduled for December 20, 2016. We expect the Qualifying Acquisition to be completed in early January 2017, subject to the satisfaction of certain conditions as set out in the purchase agreements for the three businesses.

The prospectus and the information circular in respect of the Meeting are available under Acasta's profile on SEDAR at

About Acasta Enterprises Inc.

Acasta is a special purpose acquisition corporation that raised $402.5 million in its initial public offering of Class A restricted voting units of Acasta, in July 2015, with the purpose of effecting a qualifying acquisition. Following the Qualifying Acquisition, Acasta will become a private equity manager and will launch a private equity fund to pursue further market opportunities.

Cautionary Note Regarding Forward-Looking Statements

This news release may contain forward‐looking statements (within the meaning of applicable securities laws) which reflect Acasta's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. These statements are based on Acasta's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the completion of the initial acquisitions and Acasta's intention to launch as a long-term investment and private equity management firm.

The forward-looking statements in this news release are based on certain assumptions, including without limitation the receipt of any required regulatory and shareholder approvals, and the expected timing related thereto, that Acasta's future objectives and strategies to achieve those objectives will not change, including, without limitation, its plan to raise its first private equity fund and the expectation that no event, change or other circumstance will occur that could give rise to the termination of any of the purchase agreements. The forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the risk that the Qualifying Acquisition may not be completed as planned, and that the Acasta may not succeed in raising its private equity funds. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, Acasta assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Acasta Enterprises Inc.

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