Bridgemarq Real Estate Services® Announces Completion of Strategic Transaction to Acquire High-Quality Real Estate Brokerage Assets and Become Independently Managed

TORONTO, April 1, 2024 /CNW/ - Bridgemarq Real Estate Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) today announced the completion on March 31, 2024, of the Company's previously announced acquisition of Bridgemarq Real Estate Services Manager Limited (the "Manager") and Proprio Direct Inc. ("Proprio Direct" and collectively with the Manager and with their subsidiaries, the "Target Entities") from an affiliate of Brookfield Business Partners ("Brookfield"), and the settlement of certain payments owing by the Company (collectively, the "Transaction"). As consideration for the Transaction, 2,920,877 ClassB subordinated limited partnership units (the "Exchangeable Units") of Residential Income Fund L.P. (the "Partnership") were issued to Brookfield, which are exchangeable on a one-for-one basis into an equivalent number of restricted voting shares (the "Restricted Voting Shares") of the Company.

"The completion of this transaction marks a pivotal moment for Bridgemarq. The acquisition of these brokerage operations and the internalization of the management team are crucial to the long-term success and growth of our business. Expanding the Company's profile with the addition of new and innovative business models will allow us to increase revenues and better position our brands to capture greater market share. We believe this transaction will provide long-term value for shareholders and offer even more diverse and technology-forward solutions for our network of real estate professionals," said Spencer Enright, Chief Executive Officer, Bridgemarq.

For additional details on the Transaction, see the Management Information Circular dated March 1, 2024, and the definitive share purchase agreement for the Transaction dated December 14, 2023, copies of which are available on the Company's profile on SEDAR+ at www.sedarplus.ca.

Following the completion of the Transaction, the Company effected several key changes to the Company's board of directors (the "Board") and management team to increase the operational effectiveness of the business while maintaining continuity of operations:

• Lorraine Bell, who has been a valuable member of the Board since 2003, has succeeded Spencer Enright as the independent chair of the Board;
• Spencer Enright, who for the past decade has been the Chief Executive Officer of the Manager and responsible for overall leadership and oversight over operations of the Target Entities, was appointed Chief Executive Officer of Bridgemarq and will continue as a director on the Board; and
• Phil Soper will continue in his role managing all agent and franchise relationships as the President of Bridgemarq, and Glen McMillan will continue in his role as Chief Financial Officer of Bridgemarq.

In connection with the Transaction, the Company has also amended its credit facility (the "Credit Facility") effective February 21, 2024. The Credit Facility amendments include updating certain provisions to account for the new corporate structure and the Company's expanded operations resulting from the Transaction as well as increasing the Company's aggregate borrowing capacity from $90 million to $95 million through a $5million increase in the Company's operating facility.

For a full description of the Company's Credit Facility, see the Company's Annual Information Form for the year ended December31, 2023, or the Company's Annual Report, which will be available on the Company's website at www.bridgemarq.com and on the Company's profile on SEDAR+ at www.sedarplus.ca.

Blair Franklin acted as independent financial advisor and Stikeman Elliott LLP acted as independent legal counsel to the special committee of the Board in connection with the Transaction. Goodmans LLP advised Brookfield on the Transaction.

Bridgemarq is a leading provider of services to residential real estate brokers and a network of approximately 21,000 REALTORS®. We operate in Canada under the Royal LePage®, Via Capitale® and Johnston & Daniel® brands. For more information, go to bridgemarq.com.

Bridgemarq is an affiliate of Brookfield Business Partners, a business services and industrials company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs. Brookfield Business Partners is listed on the New York and Toronto stock exchanges. Further information is available at bbu.brookfield.com.

This news release contains forward-looking information and other "forward-looking statements", including, without limitation, statements with respect to the anticipated benefits of the Transaction, and the economic and strategic impact of the Transaction. Words such as "believe", "growth", "may", "to", "will", and other expressions that are predictions of or could indicate future events and trends and that do not relate to historical matters identify forward-looking statements.

Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those indicated in the forward-looking statements include: any resurgence of COVID-19 (including any impact of COVID-19 on the economy and the Company's business), changes in the supply or demand of houses for sale in Canada or in any particular region within Canada, changes in the selling price for houses in Canada or any particular region within Canada, changes in the Company's cash flow, changes in the Company's strategy with respect to and/or ability to pay dividends, changes in the productivity of the Company's REALTORS® or the commissions they charge their customers, changes in government policy, laws or regulations which could reasonably affect the housing markets in Canada or the economy in general, changes to any products or services developed or offered by the Company, consumer response to any changes in the housing markets in Canada or any changes in government policy, laws or regulations, changes in general economic conditions (including interest rates, consumer confidence and other general economic factors or indicators), changes in global and regional economic growth, changes in the demand for and prices of natural resources on local and international markets, the level of residential real estate transactions, competition from other real estate brokers or from discount and/or Internet-based real estate alternatives, the closing of existing real estate brokerage offices, other developments in the residential real estate brokerage industry or the Company that reduce the number of REALTORS® in the Company's network or revenue from the Company's network, the Company's ability to maintain brand equity through the use of trademarks, the methods used by shareholders or analysts to evaluate the value of the Company and its publicly traded securities, changes in tax laws or regulations and other risks detailed in the Company's annual information form, which is filed with securities commissions and posted on SEDAR+ at www.sedarplus.ca. There are also risks that are inherent in the nature of the Transaction, including the diversion of management time caused by the Transaction and the failure to realize the anticipated benefits of the Transaction. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to management. Material factors or assumptions that were applied in drawing conclusions or making estimates set out in the forward-looking statements include, but are not limited to: anticipated economic conditions, anticipated impact of government policies, anticipated financial performance, anticipated market conditions, anticipated benefits from the Transaction, business prospects and the successful execution of the Company's business strategies. The factors underlying current expectations are dynamic and subject to change. Certain information in this press release may be considered as "financial outlook" within the meaning of applicable securities legislation. The purpose of this financial outlook is to provide readers with disclosure regarding the Company's reasonable expectations with respect to the Transaction. Readers are cautioned that the financial outlook may not be appropriate for other purposes. Although the forward-looking statements contained in this press release are based upon what management believes are reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Prior to completion of the Transaction, Brookfield, together with the persons and entities which are directly or indirectly controlled by it, beneficially owned or exercised control or direction over 315,000 Restricted Voting Shares (representing approximately 3.3% of the Restricted Voting Shares on a non-diluted basis and 2.5% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all outstanding Exchangeable Units, in each case prior to completion of the Transaction) and 3,327,667 Exchangeable Units (representing approximately 26.0% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all Exchangeable Units prior to the completion of the Transaction). Such securities, in the aggregate, represented approximately 28.4% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all Exchangeable Units prior to the completion of the Transaction.

Upon completion of the Transaction, after taking into account the additional 2,920,877 Exchangeable Units issued by the Partnership in consideration for the Transaction (representing approximately 18.6% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all Exchangeable Units), Brookfield, together with the persons and entities which are directly or indirectly controlled by it, beneficially own or exercise control or direction over, 315,000 Restricted Voting Shares (representing approximately 3.3% of the Restricted Voting Shares on a non-diluted basis and 2.0% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all outstanding Exchangeable Units) and 6,248,544 Exchangeable Units (representing approximately 39.7% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all Exchangeable Units). Such securities, in the aggregate, represent approximately 41.7% of the Restricted Voting Shares on a fully-diluted basis, assuming the exchange of all Exchangeable Units.

The above calculations are based on 9,483,850 Restricted Voting Shares and 3,327,667 Exchangeable Units issued and outstanding (calculated on a non-diluted basis) immediately prior to the Transaction and 9,483,850 Restricted Voting Shares and 6,248,544 Exchangeable Units issued and outstanding (calculated on a non-diluted basis) following the Transaction.

Brookfield's direct and indirect holdings of Restricted Voting Shares and Exchangeable Units are being held for investment purposes and such holdings may be increased or decreased as considered appropriate in light of investment criteria, market conditions and other factors and in accordance with the provisions of applicable securities legislation.

This news release is being issued under the early warning provisions of Canadian securities legislation. A copy of the Early Warning Report to be filed by Brookfield in connection with the transactions described above will be available on SEDAR+ (www.sedarplus.ca) under the Company's issuer profile.

The head office of the Company is located at 39 Wynford Drive, Suite 200, Toronto, Ontario, Canada M3C 3K5. Brookfield's address is 181 Bay Street, Unit 100, Toronto, Ontario, M5J 2T3.

To obtain a copy of the Early Warning Report filed under National Instrument 62-103, please contact:

SOURCE Bridgemarq Real Estate Services Inc.

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