TIN article
The tungsten space saw some exciting M&A activity on Wednesday morning when Almonty Industries (TSXV:AII,OTCMKTS:ALMTF) announcedthat it has entered into an arrangement agreement with Woulfe Mining (CSE:WOF). The deal, which has been a long time coming, will see Almonty acquire all of Woulfe’s outstanding shares by way of a court-approved plan of arrangement.
Upon closing, each common share of Woulfe will be exchanged for 0.1029 of a common share of Almonty; that represents total consideration of $0.07 per Woulfe share, a premium of 16.7 percent to Woulfe’s closing price as of July 6. Woulfe’s shareholders will own approximately 40.2 percent of the combined businesses.
The acquisition is subject to approval from the TSX Venture Exchange and the Supreme Court of BC; however, according to Almonty CEO Lewis Black, the agreement has already been signed and unanimously approved by the boards of both companies. Shareholders will vote on the deal at a special meeting that is expected to be held on or before September 8, and the companies expect it to be finalized early that month.
A long time coming
As mentioned, the Almonty-Woulfe deal has been in the works for quite some time, with the two companies entering into a non-binding letter of intent back in January to merge. However, less than a month later, releases from both companies revealed that they had decided against the merger. Black later said that decision was just an issue of timing.
Then, just last month, Almonty acquired 9,497,229 common shares in the capital of Woulfe from Dundee Resources; at the same time, it signed an agreement with Woulfe for a non-brokered private placement for $1 million in principal amount of convertible unsecured subordinated debentures at a price of $1,000 per debenture.
Now it seems the two have managed to come to an agreement that suits both parties and came at the right time.
“We have been able to put these companies together because the commodity markets right now aren’t particularly kind to anybody,” Black told the Investing News Network, adding, “we feel that with this consolidation we will see dramatic savings in standalone projects, and we’ll be able to produce a consistent spec of scheelite and wolframite across the company. So the customers are very happy because now they are getting consistency, regardless of source, because we have the ability to blend multiple sources of material. What we are taking here is the most significant deposit outside of China that exists and marrying it to the most accomplished tungsten operating team.”
Black said that even though both boards have agreed to it, it ultimately the shareholders of Woulfe will decide wthether the acquisition happens. ”I think the Almonty shareholders are for it because they know what we are capable of and what we have been able to achieve in a very difficult market. So I believe they will trust that we have a vision for the company, and I think we can rely on their support.”
Win-win deal
Woulfe Chairman Brian Howlett is certainly in favor of the deal. He said in Wednesday’s press release that the company “consider