High River, Alberta, January 17, 2019 – The Western Investment Company of Canada Limited (“Western”) (TSXV: WI) provides an update and clarification regarding the status of its pending insurance transaction, announced on December 18, 2018 and re-issued January 9, 2019:
- Western entered into a letter of intent dated December 18th, 2018 to acquire a fifty percent interest in a Western Canadian based property and casualty insurance company for approximately $2 million or 90% of book value as of the closing date.
- Western has completed its due diligence with regard to the target company and has removed that condition;
- Western has the option to accept vendor financing at Prime Rate + 3.0% for up to 6 months from the closing date or the flexibility to pay cash from working capital, issuance of securities or a combination thereof for the estimated $2 million purchase price. Western confirms the transaction is arms length;
- Deadline for completion of a mutually acceptable go-forward business plan and approval by Western’s Board is January 31;
- A formal Purchase and Sale Agreement and a Unanimous Shareholders Agreement will be executed concurrent with the receipt of final approval of the transaction by the Alberta Superintendent of Insurance; and
- The parties are working toward a target closing date of March 31 to complete the transaction.
Western CEO Scott Tannas stated:
“We continue to work toward completion of this transaction which will see us take a 50 percent interest in a small, Western based insurer. We are active in the building of the business plan and will take a leading role in the execution of the plan. We believe there is a growing need for specialty insurance capacity delivered by a nimble insurer with strong distribution relationships.”
“Shareholders will know that since inception we have been on the lookout for our entry point into the insurance business. Insurance was one of four target industries we identified as part of our founding investment strategy. We are focused on completing the transaction and moving forward as soon as possible.”
Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian business people, and dedicated to building and maintaining ownership in successful Western Canadian companies, and helping them to grow. The company’s shares are traded on the TSX Venture Exchange under the symbol WI. For more information on the company, please visit its website at www.winv.ca.
The Western Investment Company of Canada Limited
President and Chief Executive Officer
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