TORONTO, April 3, 2018 /CNW/ - Axis Auto Finance Inc.
(TSXV:AXIS) ("Axis" or "the Company"), is pleased to announce that on April 2, 2018,
it closed its acquisition (the "Acquisition") of all of the issued and outstanding securities of Trend Financial Corp.
("Trend").
"The closing of the Trend acquisition creates a powerhouse in the Canadian sub-prime auto lending market," said Ilja
Troitschanski, Axis' Founder and President. "We are excited to welcome the Trend team to Axis and look forward to our future
together."
"I want to commend the Axis deal team, the management at Trend, as well as our advisors for successfully getting this
transaction closed," said Todd Hudson, Axis' CEO. "We have become a clear leader in the
Canadian sub-prime auto finance space and we intend to continue to grow Axis from coast to coast. The Trend deal puts us one
step closer to that goal," he added.
The Acquisition was completed pursuant to a share purchase agreement dated March 6, 2018 (the
"Share Purchase Agreement") for a total consideration of approximately $29.3 million,
comprised of: (i) approximately $20.7 million in cash, inclusive of a $1
million holdback amount paid into escrow and releasable following the completion of the purchase price adjustments under
the Share Purchase Agreement; (ii) the issuance of 3,252,244 common shares in the capital of Axis ("Common Shares") and
1,918,194 Common Share purchase warrants ("Warrants"); (iii) the issuance of 2,015,409 Common Shares and 2,562,933
Warrants, paid into escrow and, subject to certain exceptions, releasable no later than the date that is 19 months from the
closing date of the Acquisition; and (iv) the issuance of a contingent 1,684,345 Common Shares and a contingent 2,141,929
Warrants, paid into escrow and payable in accordance with the terms of the Share Purchase Agreement. Each Common Share was issued
at a deemed price of $0.70 per Common Share and each Warrant entitles the holder thereof to
purchase a Common Share at a price of $0.90 at any time during a period of 36 months following the
closing date of the Acquisition.
In addition, as previously disclosed, Axis issued an additional $3 million principal aggregate
amount of extendible convertible unsecured subordinated debentures ("Debentures") to certain vendors of Trend, who
subscribed for such Debentures with a portion of the cash entitled to be received by such vendors pursuant to the Acquisition.
The Debentures are not listed or posted for trading on any exchange and are subject to a statutory four-month and a day hold.
The Acquisition was funded in part by a private placement financing (the "Offering") of subscription receipts
("Subscription Receipts") and Debentures, which closed on March 22, 2018 through a syndicate
of underwriters co-led by Canaccord Genuity Corp. and INFOR Financial Inc. and including PI Financial Corporation and Raymond
James Ltd. Pursuant to the Offering, Axis issued 10,440,784 Subscription Receipts at a price of $0.70 per Subscription Receipt for gross proceeds of approximately $7.3 million
and $14.55 million aggregate principal amount of Debentures. In accordance with the terms of the
Subscription Receipts, each Subscription Receipt was exchanged upon the closing of the Acquisition for one Common Share and the
proceeds from the sale of the Subscription Receipts were released from escrow. Holders of Subscription Receipts are not required
to take any action in order to receive their Common Shares.
INFOR Financial Inc. ("INFOR") acted as financial advisor to Axis in connection with the Acquisition and Dentons Canada
LLP acted as legal counsel to Axis. In connection with the closing of the Acquisition, Axis will pay INFOR: (i) a cash advisory
fee in connection with Axis' prior acquisition of Cars on Credit Financial Inc. and (ii) an advisory fee in connection with the
Acquisition, satisfied in part by payment in cash and in part through the issuance of 321,428 Axis units ("Units") at a
price of $0.70 per unit. Each Unit is comprised of 1 Common Share and one half of a Warrant, with
each Warrant entitling the holder thereof to purchase a Common Share at a price of $0.90 at any
time during a period of 36 months following the closing date of the Acquisition.
About Axis Auto Finance
Axis provides non-standard financing options targeting roughly 30% of Canadians (Source: Equifax) that do not qualify for
traditional bank-type financing for their used vehicle purchase. Through personalized service and a commitment to building
strong, long-lasting relationships with dealer partners, Axis continues to be one of Canada's
fastest-growing auto-financing companies.
Further information on the Company can be found at www.axisautofinance.ca.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor
its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward looking Information
Certain information in this press release may constitute forward-looking information. This information is based on current
expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ
materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward
looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying
risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, available at www.sedar.com.
SOURCE Axis Auto Finance Inc.
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