Saltire Capital closes SanStone Investments acquisition

Executive Summary

• Saltire Capital Ltd. has successfully completed the acquisition of 100% of SanStone Investments Ltd., a leading owner/operator of heavy and agricultural equipment dealerships in Eastern Canada, valued at $70-million CAD.
• The company secured a $50.1-million USD initial draw from a $100-million USD credit facility with Sagard Credit Partners II, LP, with proceeds used to refinance existing debt, preferred equity, and fund the acquisition.
• Concurrently, Saltire launched a brokered private placement for up to $5-million CAD (plus overage) at $11.78 per share to further finance the acquisition, having obtained necessary TSX conditional approval and written shareholder consent.

Key Details

• Acquisition of SanStone Investments Ltd.:
  • Valuation: $70-million CAD (subject to customary adjustments).
  • Structure: Indirect acquisition via wholly owned subsidiary.
  • Target: SanStone Investments Ltd., owner of Wilson Equipment and Tidal Tractor dealership brands in Eastern Canada.
  • Consideration: Saltire satisfied $10-million CAD of the purchase price and working capital adjustment by issuing 1,246,071 common shares to vendors at a deemed price of $11.78 CAD per share. Additional shares may be issuable in specific circumstances.
• Sagard Credit Facility:
  • Total Facility Size: Up to $100-million USD (inclusive of initial draw).
  • Initial Draw: $50.1-million USD.
  • Lenders: Sagard Credit Partners II LP and others, with Sagard Holdings Manager LP as administrative/collateral agent.
  • Additional Draws: Up to $49.1-million USD available subject to conditions.
  • Maturity: Fifth anniversary of the loan agreement.
  • Use of Proceeds: Refinancing existing National Bank of Canada credit facilities, refinancing issued/outstanding preferred equity, refinancing assumed SanStone debt, financing portion of cash purchase price, and paying fees/expenses.
  • Warrant Consideration: Issuance of 1,504,812 common share purchase warrants to Sagard.
  • Warrant Terms: Exercise price of $14.5228 CAD per share; expires at 5 p.m. Toronto time on Dec. 1, 2030.
• Brokered Private Placement:
  • Agent: Paradigm Capital Inc.
  • Size: Up to 424,448 common shares at $11.78 CAD per share.
  • Gross Proceeds: Up to $5-million CAD.
  • Over-allotment Option: Up to 63,667 additional shares for proceeds up to $749,997.26 CAD.
  • Expected Close: On or about Aug. 12, 2025.
  • Use of Proceeds: Indirect financing of a portion of the cash purchase price for the SanStone acquisition.
• Regulatory and Shareholder Approvals:
  • TSX Conditional Approval: Received for the transactions and listing of shares issued/issuable.
  • Shareholder Consent: Written evidence obtained from holders of >50% of issued/outstanding common shares (familiar with terms) in favor of the transactions, satisfying Section 611(c) of the TSX Company Manual (as shares issued/issuable exceed 25% of outstanding shares).
• Advisers:
  • Transaction Adviser (Acquisition): National Bank of Canada.
  • Credit Facility Adviser: Raymond James.
  • Private Placement Agent: Paradigm Capital Inc.
  • Legal Counsel (Saltire - Credit/Private): Goodmans LLP.
  • Legal Counsel (Sagard - Credit): Torys LLP.
  • Legal Counsel (Paradigm - Private): Borden Ladner Gervais LLP.
  • Legal Counsel (Saltire - Acquisition): McInnes Cooper.
  • Legal Counsel (SanStone - Acquisition): Cox & Palmer.

Notable Quotes

• None explicitly quoted in the text provided.