LOGiQ Asset Management Inc. (TSX: LGQ) and Grenville Strategic Royalty Corp. (TSX-V: GRC) have entered into an arrangement agreement pursuant to which LOGiQ will acquire all of the issued and outstanding common shares of Grenville on the basis of 6.25 common shares of LOGiQ for each outstanding Grenville share.
Upon closing the transaction, the combined company will be 607% owned by existing shareholders of Grenville with shareholders of LOGiQ owning the remaining 33%. The transaction will constitute a reverse take-over of LOGiQ by Grenville.
LOGIQ sold substantially all of the retail asset management agreements to OMERS backed Purpose Investments for $32.9 million in December 2017.
LOGiQ and Grenville believe that on a combined basis, the companies together will offer a more effective and viable platform for enhancing shareholder value.
“As we explored various options for LOGiQ shareholders, we believe Grenville and its business model, combined with LOGiQ’s institutional Global Advisory Sales platform, offers exciting growth opportunities and the potential to rebuild shareholder value” said Dr. Eldon Smith, LOGiQ’s Chairman. “Grenville’s renewed investment process, strong deal flow pipeline and investment structure are designed to return significant cash on cash yields to investors while participating in the growth of its portfolio companies. This model has been built to provide a win for Grenville’s shareholders and portfolio companies alike. Grenville’s recent success with companies such as Boardwalktech, an emerging enterprise Blockchain company based in California, and its significant equity position in cannabis franchisor Inner Spirit, are indicative of the quality of its deal flow and the upside potential of Grenville’s business model.”
Vernon Lobo, Chair of Grenville’s investment committee added: “We are delighted to be partnering with LOGiQ as we add scale to our business to allow us to take advantage of the compelling investment opportunities ahead of us. Both companies have worked very hard over the past year to address their challenges, and the combination of these businesses will provide us with a solid financial platform from which to build a value-creating business focused on providing alternative sources of financing to high growth companies throughout North America. We are encouraged by recent events in our portfolio, including the contract buyout concluded last week with phone repair company FIXT, and the going public transaction announced by Clear Blue Technologies, one of our earliest investees. We are also looking forward to partnering with Steve Mantle and his team at LOGiQ Global Partners as they continue to grow their business, which generates a consistent and growing revenue stream for the benefit of shareholders. We will be working on board and management configuration over the coming weeks.”
Toronto based Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments, buyouts from contracts and equity returns. The flexible royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.
photo credit: Grenville