PopReach Corporation (TSXV: POPR) announced on Monday that it has signed a definitive agreement with 2810735 Ontario Inc., known as Federated Foundry, to settle the terms and conditions of the proposed business combination. The transaction is reported to be for consideration of $160 million.
Under the terms of the agreement, the mobile game developer will be acquiring all issued and outstanding shares of Federated Foundry on a fully diluted basis. The transaction is expected to be an amalgamation of PopReach, Federated Foundry, and a new PopReach subsidiary. The company will be fulfilling the acquisition price by issuing PopReach common shares to the resulting amalgamated firm at $0.80 per share, a 32.9% premium on its 20-day average trading price.
Further, the transaction is subject to adjustments for assumed debt, working capital, and other customary terms and conditions set out in the agreement. Hence, the acquisition price will be further subtracted by assumed debt and net working capital less than $5 million.
At the transaction’s closing, it is expected that Federated Foundry shareholders will own more than 50% of the shares of the resulting issuer.
The transaction will still need the shareholders’ approval of both parties but has already got the support of 50.5% of the shareholders represented by the company’s directors, executive officers, and insiders.
Trading of PopReach shares has been halted since August 2021 when it first signed the letter of intent for the proposed business combination.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.