Flow Capital Corp. (TSX-V: FW) has closed sale of its LOGiQ Global Partners business to Ninepoint Financial Group Inc. for $12.375 million. The purchase price is subject to an adjustment of up to $1.5 million upward or downward in the event that the revenue of the Global Partners business for the 2019 fiscal year.
LOGiQ Global Partners works with investment managers from around the world to provide comprehensive investment management solutions to Pension Plans, Foundations, Endowments, Insurance Companies, Family Offices, and other Institutional clients in Canada.
LOGiQ Global Partners business includes LOGiQ Asset Management Ltd. (100%), LOGiQ Capital 2016 (100%), LOGiQ Capital Partners Inc. (51%), and Tuscarora Capital Inc. (100%)
Flow Capital was formed through a plan of arrangement between LOGiQ Asset Management Inc. and Grenville Strategic Royalty Corp. (formerly TSX-V: GRC) on June 7, 2018. The transaction constituted as reverse take-over of LOGiQ by Grenville.
photo redit: Flow Capital
News Release
FLOW CAPITAL ANNOUNCES SALE OF LOGIQ GLOBAL PARTNERS BUSINESS FOR $12.375 MILLION
TORONTO, April 15, 2019 – Flow Capital Corp. (TSXV: FW) (“Flow Capital”) is pleased to announce the closing on April 12, 2019 of the sale of its LOGiQ Global Partners business to Ninepoint Financial Group Inc. (“Ninepoint”) for total consideration of $12,375,000 (the “Transaction”).
“The sale of the Global Partners business is an important milestone for Flow Capital”, said Alex Baluta, Chief Executive Officer of Flow Capital. “The Company now has a cash balance of approximately $10,000,000, and a $9,500,000 receivable from Ninepoint that can be called for payment in December 2019, thereby providing us with sufficient resources to capitalize on the opportunities available to us. The completion of this sale puts us in an excellent position to accelerate our growth going forward”.
The purchase price is subject to an adjustment of up to $1,500,000 upward or downward in the event that the revenue of the Global Partners business for the 2019 fiscal year increases or decreases, as the case may be, by more than 5% compared to revenue for the 2018 fiscal year.
Under the terms of the Transaction, Flow Capital has received:
A $1,375,000 cash payment;
A note in the principal amount of $9,500,000 bearing interest at an annual rate of 10%, which may be called by Flow Capital at any time after August 1, 2019 and which must be repaid by Ninepoint no later than 4 months following the date of demand (the “First Note”);
and
A note in the principal amount of $1,500,000 bearing interest at an annual rate of 10%, repayable on the later of: (i) the date that is two months following the date on which the First Note is repaid; and (ii) three business days following the determination of the purchase price adjustment described above.
“We are very excited by the opportunities facing Flow Capital. We are experiencing continued strong demand from well managed emerging growth companies for the revenue-linked royalty financing that we are becoming known for. We are also seeing an increase in the number of excellent investment opportunities that are more appropriate for alternate types of financings structures, including venture debt. Over time, in an effort to improve our returns to shareholders, to diversify the risk profile of our portfolio, and to capitalize on diverse opportunities, we will continue to expand the types of structures we use for investment into these emerging growth companies. In addition, we continue to work on initiatives to enhance the liquidity of some of our long-term assets and investments, to further increase our cash available for future investment”,
said Mr. Baluta.
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About Flow Capital
Based in Toronto, Flow Capital Corp. is a diversified alternative asset investor and advisor, specializing in providing minimally dilutive capital to emerging growth businesses.
For further information, please contact:
Flow Capital Corp.
Alex Baluta
Chief Executive Officer
alex@flowcap.com
1 Adelaide Street East, Suite 3002,
PO Box 171,
Toronto, Ontario M5C 2V9