CLARKE INC. ENTERS INTO AGREEMENT TO ACQUIRE RAVELIN PROPERTIES REIT

Executive Summary

• Clarke Inc. entered into an Arrangement Agreement to acquire 100% of Ravelin Properties REIT (units and convertible debentures) in a court‑approved plan of arrangement valued at $1.1 billion (enterprise value $1.7 billion).
• Consideration: REIT unit holders receive 0.582 Clarke shares per 1,000 units; REIT debenture holders receive 14.562 Clarke shares per $1,000 principal, plus an additional 150,000 Clarke shares allocated to early‑consenting debentureholders. Approximately 2.5 million Clarke shares (≈19.3% of post‑transaction equity) will be issued.
• Transaction expected to close in Q2 2026 pending court, TSX, and securityholder approvals; upon closing REIT units and debentures will be delisted.

Key Details

• Valuation: Ravelin valued at $1.1 bn (incl. debt); pro‑forma combined entity valued at $1.7 bn.
• Share Issuance: 2,500,000 Clarke common shares to be issued; represents ~19.3% of post‑transaction Clarke equity. Post‑closing ownership: existing Clarke shareholders ≈83.8%; REIT securityholders ≈16.2%.
• Consideration Premiums:
• Debentureholder consideration = 93 % premium vs. 20‑day VWAP of debentures.
• 171 % premium vs. closing price of debentures on March 26, 2026.
• Early Consenting Debentureholders: Pro‑rated allocation of 150,000 Clarke shares for those who consent early.
• Closing Conditions: Court approval (Ontario Superior Court), TSX approval, ≥2/3 votes from REIT unit holders and debenture holders at special meetings, customary closing conditions.
• Forbearance Extension: G2S2 Capital extended loan forbearance to June 1, 2026; potential CCAA proceedings if required approvals not obtained.
• Debt Impact: $157.95 million principal of REIT debentures exchanged for Clarke shares; post‑transaction loan‑to‑value expected ≈68.5 % (down from 94.2 % at year‑end 2025).
• Strategic Rationale / Benefits:
• Immediate liquidity and balance‑sheet certainty for REIT securityholders.
• Scale increase: pro‑forma asset base >$1.8 bn; presence in 11 Canadian provinces/territories, Chicago, Ireland.
• Diversification of Clarke’s cash flows beyond hospitality & Western Canada.
• Expected G&A cost synergies and enhanced capital market visibility.
• Governance: Unanimous board approvals from both companies; special committee fairness opinion (KSV Soriano) deems consideration fair to unit holders and superior to liquidation for debenture holders.
• Termination Fee: $1 million payable by REIT to Clarke if REIT accepts a superior proposal.

Notable Quotes

• Calvin Younger, Chair of the REIT Board: “The Transaction is in the best interests of Ravelin and its stakeholders given the current solvency and leverage challenges.”
• Tom Casey, CFO of Clarke: “The acquisition will result in a company with diversified geographic exposure and scale, providing significant upside and liquidity for shareholders.”