STEP Energy Services Ltd. Agrees to $5.50 Per Share Take Private Transaction With Funds Advised by ARC Financial Corp.

Executive Summary

• STEP Energy Services entered into a definitive arrangement agreement with ARC Energy Fund 8 (and related limited partnerships) to take the company private in an all‑cash transaction at $5.50 per share, representing roughly a 29% premium to the September 24 2025 closing price.
• The Arrangement requires shareholder approval (minimum 66⅔% of votes cast, with a “majority of the minority” test) and court approval, and is expected to close in December 2025, after which STEP’s shares will be delisted from the TSX.
• ARC has secured voting support agreements covering ~71.7% of the minority shares, and the Board and Special Committee have unanimously recommended that shareholders vote in favour of the transaction.

Key Details

• Purchase Price: $5.50 per share (cash).
• Premium: Approximately 29% over STEP’s September 24 2025 closing price.
• Transaction Structure: Plan of arrangement under the Alberta Business Corporations Act; no financing condition for ARC.
• Shareholder Approval Requirements:
• At least 66⅔% of votes cast by all shareholders, and a majority of votes cast by “minority” shareholders (excluding ARC‑controlled shares).
• Voting Support Agreements:
• MMCAP International Inc. – ~22.5% of outstanding shares.
• XIB Arbitrage Master Fund & XIB International Master Fund – ~6.35%.
• Groundlayer Capital Inc. – ~1.64%.
• Combined, these agreements represent ~71.7% of the minority shareholders’ holdings.
• Board and Special Committee: Unanimously approved and recommended the Arrangement; Board members representing ARC abstained.
• Independent Valuation & Fairness Opinion: EY provided a formal valuation (fair‑market range $4.80–$5.70 per share) and fairness opinion dated October 17 2025, concluding the consideration is fair from a financial perspective.
• Closing Timeline: Expected closing on or about December 16 2025, subject to shareholder, court, TSX, and customary closing conditions.
• Post‑Closing Actions: Shares to be delisted from the TSX; STEP will cease to be a reporting issuer but will continue under its current management team led by President & CEO Steve Glanville.
• Advisors & Counsel:
• Financial advisors – Peters & Co. (Special Committee), RBC Capital Markets (lead advisor to ARC), ATB Capital Markets (co‑advisor to ARC).
• Legal counsel – Burnet, Duckworth & Palmer LLP (Special Committee), Stikeman Elliott LLP (STEP), Norton Rose Fulbright Canada LLP (ARC).
• Lock‑up Agreements: Board members, officers, and certain shareholders collectively own ~1.61% of outstanding shares and have entered lock‑up agreements to vote in favour of the Arrangement.
• Meeting Details: STEP shareholder meeting (“STEP Meeting”) scheduled for December 12 2025; information circular to be filed by November 10 2025 (subject to Canada Post delivery disruptions).

Notable Quotes

“The proposed transaction represents the culmination of the avenues we have explored to maximize value for our shareholders.” – Steve Glanville, President & CEO

All forward‑looking statements are subject to risks and uncertainties detailed in the release.