Choom Holdings Inc. entered into a definitive agreement to acquire Phivida Holdings Inc. for CAD 9 million.
Upon completion of the transaction, Choom's Board of Directors will be reconstituted to comprise three Directors nominated by Choom and one Director nominated by Phivida. A fifth Director, mutually agreed upon by Phivida and Choom, will subsequently be added to the Board. The transaction will be effected by way of a court-approved plan of arrangement, and will require approval by at least 66 2/3% of the votes cast by the shareholders of Phivida, listing / approval of new shares on stock exchange, third party approval, Dissenters rights limited, Phivida has a working capital surplus of not less than CAD 2 million at the effective time, Debenture Right shall not have been exercised, Choom has a working capital deficit of not more than CAD 500,000 at the effective time. Transaction is subject to applicable regulatory, court and stock exchange approvals and certain other closing conditions customary in transactions of this nature. The transaction has been unanimously approved by the Boards of Directors of Choom and Phivida, and Phivida Board has recommended that Phivida shareholders vote in favor of the transaction. Directors and officers of Phivida as well as certain other shareholders holding, holding approximately 31% stake of Phivida, have entered into support and voting agreements and have agreed to vote their Phivida Shares in favor of the transaction. As of July 23, 2020, Phivida has extended a $500,000 bridge loan to Choom Holdings, and as a result of that, parties also amended the Arrangement Agreement in order to provide that the closing condition in favour of Choom that Phivida have not less than CAD 2,000,000 in working capital surplus be reduced to CAD 1,500,000, on account of the funds advanced to Choom under the bridge loan. As of August 5, 2020, the annual general and special meeting of shareholders of Phivida will be held on September 4, 2020 to approve the transaction. As of September 4, 2020, shareholders of Phivida approved the transaction. As of September 10, 2020, Phivida obtained a final order from the Supreme Court of British Columbia approving the transaction. The transaction is expected to close on or about September 11, 2020. Haywood Securities Inc. provided fairness opinion to Board of Directors of Phivida. BDO Transaction Advisory Services Inc. acted as financial advisor and Keith Inman of Pushor Mitchell LLP acted as legal advisor for Choom. Hillcrest Merchant Partners Inc. acted as financial advisor and Peter Simeon of Gowling WLG (Canada) LLP acted as legal advisor for Phivida. Computershare Investor Services Inc. acted as the depositary for Phivida Holdings.