On March 29, 2010, The Westaim Corporation completed the acquisition of all of the shares of JEVCO Insurance Company from Kingsway Financial Services Inc. (“KFS”). The aggregate purchase price payable by Westaim to KFS in respect of the acquisition is $264.2 million, subject to certain adjustments. In accordance with the terms of the purchase agreement, Westaim made a cash payment to KFS of $236.7 million. In addition, Westaim deposited the sum of $27.5 million with an escrow agent to be held in trust pending certain adjustments to the purchase price in accordance with the purchase agreement. Immediately prior to the completion of the acquisition, KFS made a payment of $12 million to JEVCO to settle certain intercompany balances and JEVCO paid a cash dividend to KFS in the aggregate amount of $10.8 million.
In order to finance the acquisition, Westaim had previously issued a total of 550 million subscription receipts at an issue price of $0.50 each for gross proceeds of $275 million (the “financing”). All 550 million subscription receipts were automatically converted immediately prior to the completion of the acquisition into an aggregate of 486,147,088 common shares of Westaim and 63,852,912 Series 1 Class A non-voting, convertible participating preferred shares of Westaim having the terms and conditions specified in the articles of amendment filed by Westaim on February 26, 2010.
GMP Securities L.P. acted as financial advisor to Westaim in connection with the acquisition and as the sole lead manager in respect of both a $50 million bought deal and a $59.5 million best efforts underwriting of subscription receipts.
Cassels Brock & Blackwell LLP acted for The Westaim Corporation in connection with the acquisition with a team that included Gordon Goodman and Brian Reeve (financial services and insurance – corporate & regulatory); Laurie LaPalme, Erin Brady and Miho Felicio (business law and insurance – corporate & regulatory); Chris Hersh and Yana Ermak (competition, antitrust & foreign investment); Bruce Leonard (insolvency & restructuring); Bernice Karn (intellectual property); Tom Kapsales (real estate); John McGowan (employment law); Robert Kligman (research) and Christopher Norton (tax).
Heenan Blaikie LLP acted for Westaim in connection with the financing with a team that included Kevin Rooney, Charlie MacCready, Stephanie Sykes and Corey MacKinnon (corporate finance and M&A) and Mark Jadd (tax).
Fasken Martineau DuMoulin LLP advised GMP Securities with a team that included Georges Dubé, Martin Fisher-Haydis, Laura Fetter, Michael Shour and Chelsea Bushfield (securities); and Robert McDowell, Kathleen Butterfield and Marvin Mikhail (financial institutions).
Kingsway Financial Services Inc. was represented by Kathleen Howie, General Counsel, and Hanif Nori, Corporate Counsel, and by Ogilvy Renault LLP with a team including Walied Soliman, Paul Fitzgerald, Evelyn Li, Kevin McPhee and Christopher Davenport (corporate); Marc Duquette (regulatory); Kevin Ackhurst (competition); Anne Gallop, Michael Horvat (employment and labour); David Amato (debt finance); Richard King (environmental); Julie Paquette (real estate); Robert Percival (information technology); Karen Galpern (research) and Barry Segal (tax).