Tornado Infra to be acquired by Toro for $1.92 a share

Mr. Brett Newton reports TORNADO INFRASTRUCTURE EQUIPMENT TO BE ACQUIRED BY THE TORO COMPANY Tornado Infrastructure Equipment Ltd. has entered into a definitive agreement with The Toro Company whereby a subsidiary of The Toro Company (the purchaser) will acquire all of the outstanding Class A common shares of the company in an all-cash transaction for $1.92 per share. The purchase price represents an aggregate fully diluted equity value for Tornado of approximately $279.3-million. Upon completion of the transaction, Tornado will be an indirect wholly owned private subsidiary of The Toro Company. Key highlights The transaction is the result of a comprehensive strategic review process over the past eight months, focused on maximizing value for the company's shareholders. The strategic review also involved discussions with a broad range of potential strategic buyers and financial sponsors. Prior to reaching out to any such potential strategic buyers and financial sponsors, the company formed a committee of independent directors, which was advised by independent and qualified legal and financial advisers. The strategic review has been supervised by the special committee, is the outcome of that process, and is unanimously supported by the special committee and Tornado's management and its board of directors. The special committee, in making its unanimous determination to recommend approval of the transaction to the board, and the board, in making its unanimous decision to approve the transaction, considered, among other things, the following factors: Superior strategic alternative and extensive sale process. An extensive sale process was undertaken with outreach and negotiations being conducted under the supervision of the special committee, with the assistance of legal and financial advisers. In conducting the strategic review, the special committee and board assessed the business, operations, assets, financial condition, operating results and future prospects of the company, and the relative benefits and risks of various alternatives reasonably available to the company, including the continued execution of the company's existing strategic plan. During the course of the strategic review, a significant number of potential bidders were contacted and the purchase price of $1.92 per share in cash represents the highest offer received by the company under the sale process, and is more favourable (and can be achieved with less risk) than the value that might have been realized through pursuing a number of other strategic alternatives reasonably available to the company. Certainty of value and immediate liquidity. The all-cash consideration provides shareholders with certainty of value and immediate liquidity. Premium to market price. The purchase price of $1.92 per share represents a premium of approximately 43.7 per cent to the 12-month volume weighted average trading price as of Oct. 3, 2025, the last trading day prior to the public announcement of the transaction, a premium of 3.8 per cent to the closing price of the shares as of such date and a premium of approximately 30.3 per cent over the 180-trading day volume weighted average trading price as of such date. In assessing these premiums, the special committee and the board also considered the fact that the shares had appreciated in price significantly over the short to medium term, increasing by approximately 68.18 per cent since Jan. 2, 2025, and that recent trading prices reflected limited liquidity, representing values for a limited number of the shares rather than broader market demand. Voting and support agreements. The transaction is supported by nine of the company's largest shareholders and each of its directors and senior executives who, in aggregate, hold approximately 54 per cent of the issued and outstanding shares (on a fully diluted basis) and who have entered into agreements to vote all of their shares and other equity securities in favour of the transaction. Fairness opinions. Each of Stifel Nicolaus Canada Inc. and Origin Merchant Partners has provided to the special committee and the board an opinion to the effect that the consideration to be received by the holders of shares pursuant to the transaction is fair, from a financial point of view, to such shareholders, in each case subject to the respective limitations, qualifications and assumptions set out in those opinions. Terms of the arrangement agreement. The terms of the arrangement agreement are the result of a comprehensive arm's-length negotiation process with the oversight and participation of the special committee and the board and their advisers, which resulted in an agreement with terms and conditions that are reasonable in the judgment of the special committee and the board. Limited conditions to closing. The transaction is not subject to a financing condition and is otherwise subject to a limited number of customary closing conditions, including approval under the Competition Act (Canada). Ability to respond to superior proposals. The terms and conditions of the arrangement agreement do not prevent the board, in the exercise of its fiduciary duties, to respond, prior to the shareholders meeting, to certain unsolicited acquisition proposals that are more favourable, from a financial point of view, to the shareholders than the transaction, subject to compliance with certain terms and conditions and certain "rights to match" in favour of the purchaser. Termination fee. The termination fee payable by Tornado of $11.0-million is reasonable in the view of the board and the special committee and only payable in customary and limited circumstances. Transaction and shareholder meeting details The transaction is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta). The transaction is subject to certain approvals at the securityholders' meeting, including by at least two-thirds of the votes cast by securityholders (being the holders of shares and of company options, voting together as a single class) and if required, a simple majority of the votes cast on such resolution by securityholders present in person or represented by proxy at the company meeting excluding, for the purposes of this clause (ii), votes attached to shares and company options held by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 -- Protection of Minority Securityholdersin Special Transactions. Completion of the transaction is subject to other customary conditions, including receipt of court approval and approval under the Competition Act (Canada). The transaction is expected to close in the fourth quarter of 2025. The arrangement agreement includes customary non-solicitation provisions, which are subject to customary fiduciary out provisions that entitle the company to terminate the arrangement agreement and accept a superior proposal subject to the purchaser's matching rights. Tornado expects to hold a special meeting of securityholders to consider the transaction in November, 2025, and to mail the management information circular for the shareholders' meeting in October, 2025. Further information regarding the terms of the arrangement agreement, the background to the transaction, the rationale for the recommendations made by the special committee and the board, and how shareholders can participate in and vote at the meeting will be provided in the management information circular for the meeting which will also be filed on SEDAR+. Shareholders are urged to read these and other relevant materials when they become available. Upon closing of the transaction, the purchaser intends to cause the shares to cease to be delisted from the TSX-V and to cause the company to submit an application to cease to be a reporting issuer under applicable Canadian securities laws. The foregoing summary is qualified in its entirety by the provisions of the arrangement agreement, a copy of which, together with the voting and support agreements, will be filed on SEDAR+. Advisers Stifel is acting as the exclusive financial adviser to the board and the company. Origin is acting as independent financial adviser to the special committee. Stikeman Elliott LLP is acting as legal adviser to the company and to the special committee. McCarthy Tetrault LLP is acting as legal adviser to the purchaser and to The Toro Company. About Tornado Infrastructure Equipment Ltd. Tornado is a pioneer and leader in the vacuum truck industry and has been the choice of utility and oil field professionals with over 1,900 hydrovacs sold since 2008. The company designs and manufactures hydrovac trucks and, through its subsidiary CustomVac, based in Nisku, Alta., produces complementary vacuum and industrial equipment solutions, including units designed for the transportation of dangerous goods, and provides maintenance and field services to its customers. In addition, Tornado operates a heavy-duty truck maintenance facility in central Alberta. The company sells its products to excavation service providers in the infrastructure, environmental, industrial construction, and oil and gas markets. Hydrovac trucks use high-pressure water and vacuum to safely penetrate and cut soil to expose critical infrastructure for repair and installation without damage. Hydrovac excavation methods are quickly becoming a standard in North America to safely excavate in urban areas and around critical infrastructure, significantly reducing infrastructure damage and related fatalities. We seek Safe Harbor.