CC Capital to Invest USD $250 Million in
Westaim at CAD $4.75 Per Share Bringing Total Investable Capital
Base to Approximately USD $700 Million
Westaim to Invest in Cloud-Native, Highly
Scalable Annuities Provider Ceres Life Insurance Company, and
Remaining Interests in Arena Investors
Platform Expected to Drive Meaningful,
Long-Term Value for Shareholders
Chinh Chu to Serve as Executive Chair of
Westaim
Industry Veteran Deanna Mulligan to Lead Ceres
Life Insurance Company
Westaim to Host Conference Call Today, October
9, 2024, at 10:00 a.m. ET
CC Capital, a private investment firm focused on investing in
and operating high-quality businesses for the long term, and The
Westaim Corporation (“Westaim”) (TSXV: WED) today announced the
creation of an integrated insurance and asset management platform
through the strategic combination of:
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- Westaim, an investment company specializing in providing
long-term capital to financial services businesses;
- Arena Investors, LP (“Arena”), a global institutional asset
manager with approximately USD $3.5 billion of invested and
committed assets under management; and
- Ceres Life Insurance Company (“Ceres Life”), a cloud-native,
highly scalable annuity platform. Ceres Life has been incubated by
CC Capital and will be led by Deanna Mulligan, former CEO and Chair
of Guardian Life Insurance, a Fortune 300 company and one of the
largest life and annuities insurance companies in the U.S.
The strategic combination, fueled by CC Capital’s investment and
expertise, will transform Westaim into an integrated insurance and
asset management platform, with a growing and diversified credit
manager and an advantaged, tech-enabled insurance carrier that is
expected to provide competitively priced fixed income and
multi-year guarantee annuity products to policyholders and drive
strong and sustainable value creation for Westaim shareholders. The
transaction is expected to provide Arena with long-dated insurance
assets and better position Arena to increase its third-party assets
under management (AUM), creating a path to a potential USD $10
billion of AUM with just the existing equity capital base. Ceres
Life will continue to develop its advanced technology platform and
invest in enhanced distribution and service offerings to bring
compelling annuities products to customers. As part of a combined
platform, these businesses are expected to generate a powerful
value creation flywheel, driving continued growth and stability of
both the insurance and asset management businesses.
Ceres Life will launch with access to considerable organic
distribution flow through a unique distribution partnership, which
is expected to significantly accelerate Ceres Life’s growth,
delivering more assets to Arena and in turn enabling the Ceres Life
business to scale and serve a broader range of potential
policyholders. With these additional capabilities, Ceres Life is
expected to be positioned to leverage the long-standing insurance
relationships across CC Capital’s and Ceres Life’s management
teams’ networks to opportunistically pursue reinsurance
transactions to further accelerate the platform’s growth.
Executive Commentary
“This is a unique opportunity to create an integrated insurance
and asset management platform,” said Chinh Chu, Founder and Senior
Managing Director of CC Capital. “Ceres Life will be competitively
advantaged by Deanna Mulligan’s leadership and experience, its
advanced tech platform and a sizeable, committed capital base. With
this foundation, Ceres Life is positioned to scale rapidly and
improve how the industry serves policyholders, generating stable
insurance assets that will support Arena’s strong growth. We are
confident that this transaction will create significant long-term
value for Ceres Life policyholders and Westaim shareholders.”
“We are proud to provide our shareholders with the chance to
participate in this unique strategic combination and join us on our
significant value creation journey,” said Cameron MacDonald, CEO of
Westaim. “We are transforming Westaim into a competitively
advantaged, integrated insurance and asset management platform,
with the potential to rapidly increase our AUM, and the network and
talent to further accelerate our growth and success. Our focus at
Westaim is to partner with businesses to compound wealth and
provide above average returns over the long-term for our
shareholders – and we believe this transaction massively delivers
on that objective. We are thrilled to partner with Chinh and his
team and with Deanna, who collectively bring demonstrated expertise
in guiding the growth of world-class insurance and asset management
businesses, and who will help enable us to unlock the tremendous
potential of this unique platform.”
“I could not be more excited to develop and lead an insurer with
the capabilities and resources we are building into Ceres Life from
day one, including exceptional distribution capabilities for a de
novo annuities provider and an experienced asset management partner
– creating a company positioned to deliver stable and attractive
income for policyholders and superior returns for investors,” said
Deanna Mulligan, incoming CEO of Ceres Life. “We are inspired by
the belief that technology can reinvent the way insurance providers
meet the needs of retirees, improving service, communication, and
clarity of offerings, and we look forward to expanding our
partnerships to reach more customers over time. With the support
and backing of CC Capital, we are building a nimble, highly
efficient, and risk-conscious insurance company that provides
simple-to-understand and easily accessible annuity products to
create better outcomes for policyholders. With a large and growing
aging population and strong demand for annuity products, we believe
that Ceres Life is poised for robust and consistent growth.”
Dan Zwirn, CEO and Chief Investment Officer of Arena, said, “We
believe this transaction will enable Arena to leverage its existing
capabilities to thoughtfully scale our platform through access to
stable insurance assets from Ceres Life and the additional
long-term support and resources of the CC Capital team. We have
been working with partners in the insurance industry for years and
look forward to capitalizing on our expertise to source
high-quality, long-duration assets to generate stable returns for
Ceres Life’s policyholders.”
Boards of Directors and Management
Westaim
Westaim and Wembley Group Partners LP (the “Investor”), an
affiliate of CC Capital, will enter into an investor rights
agreement upon closing of the transaction pursuant to which the
Investor will be entitled to, among other things, certain board
nomination rights at Westaim. Pursuant to the investor rights
agreement, following the closing of the transaction, Mr. Chu will
serve as Executive Chair of the Westaim Board of Directors and Ian
Delaney, the current Executive Chair, will transition to Vice
Chair. Immediately following closing of the transaction, the
Westaim Board of Directors will consist of 11 directors, five of
whom will be nominated by the Investor and five of whom will be
nominated by Westaim (one of whom will be the CEO of Westaim),
along with an independent director nominated in coordination
between the Investor and Westaim. Mr. MacDonald will continue to
lead Westaim as CEO.
In the event the volume weighted average price of Westaim’s
shares on the TSX Venture Exchange (the “TSXV”) or other stock
exchange on which its shares are listed for trading equals or
exceeds CAD $8.00 (subject to certain adjustments described in the
investor rights agreement) for any 30 consecutive trading day
period prior to the five-year anniversary of closing of the
transaction (the “Share Price Target”), the Investor will have the
right to nominate a sixth nominee to the 11-member Westaim Board of
Directors.
Mr. Chu is the Founder and Senior Managing Director of CC
Capital, a private investment firm based in New York, which he
founded in 2015. Prior to founding CC Capital, Mr. Chu was a Senior
Managing Director, the Co-Head of Private Equity, and a member of
the Executive Committee at Blackstone, where he spent 25 years.
The Investor’s five nominees and the mutually selected
independent nominee to the Westaim Board of Directors described
above will be identified following signing and details of such
nominees will be included in the management information circular to
be mailed to Westaim shareholders in connection with the special
meeting of shareholders to approve the transaction.
Pursuant to a consulting agreement between Westaim and an
affiliate of CC Capital, Westaim will also appoint Richard DiBlasi,
Managing Director at CC Capital, as its Chief Strategy Officer,
effective immediately. After joining CC Capital in 2016, Mr.
DiBlasi was involved in the acquisition of Fidelity & Guarantee
Life in 2017 and helped support CC Capital’s stewardship of the
business following the transaction. He also supported CC Capital’s
take-private of Dun & Bradstreet in 2019 and subsequent public
listing in 2020. Prior to CC Capital, he spent six years at
Blackstone focused on investments in the financial services,
technology, and business services sectors. In addition to his new
role at Westaim, Mr. DiBlasi will continue to serve as Managing
Director at CC Capital.
Arena
Arena will continue to be led by Mr. Zwirn. The size of the
Arena Board of Managers will be fixed at nine. Westaim will have
the right to appoint five members of the Arena Board of Managers,
all of whom will be nominated by the Investor, and Mr. Zwirn will
have the right to appoint the remaining four members of the Arena
Board of Managers, two of which include Mr. Zwirn and Lawrence
Cutler, Arena’s existing Chief Operating Officer. The Investor’s
consent will be required for the removal of any of the Investor’s
nominees from the Arena Board of Managers and each nominee to the
Arena Board of Managers will require approval by a majority of the
independent directors of the Westaim Board of Directors.
Transaction Details
In connection with the transaction, CC Capital has committed to
making a USD $250 million strategic investment in Westaim to
acquire common shares and warrants that will represent an
approximately 41% interest in Westaim (assuming the vesting and
exercise of all warrants), bringing Westaim’s total investable
capital base to approximately USD $700 million. CC Capital is
currently an arm’s length party to Westaim. Following completion of
the transaction, CC Capital will be a “Control Person” of Westaim
(as such term is defined under the policies of the TSXV).
Westaim has committed to use the proceeds from CC Capital’s
investment, additional capital from its balance sheet, and capital
from the monetization of the Arena FINCOs to invest an aggregate of
approximately USD $600 million in exchange for 100% of the limited
partnership interests of a new vehicle managed by CC Capital
(“Salem Partners”). An affiliate of CC Capital will serve as the
general partner of Salem Partners and will control Salem Partners
and its investments. The limited partnership agreement of Salem
Partners will provide Westaim with the ability to remove the CC
Capital affiliate as general partner at any time, subject to
obtaining approval of a majority of the Westaim Board of Directors
(including all of CC Capital’s nominees to the Westaim Board of
Directors).
Salem Partners will acquire an affiliate of CC Capital that has
entered an agreement to acquire ManhattanLife of America Insurance
Company (the “Insurance Company”), a regulated insurance company
with minimal assets other than insurance licences in all US states
other than California, Idaho, Maine, Minnesota, New Jersey, and New
York, in exchange for the reimbursement of arm’s length third party
expenses incurred by CC Capital and its affiliates related to the
buildout of the insurance vehicle and the acquisition of the
Insurance Company, which are expected to amount to approximately
USD $10 million. Closing of the acquisition is subject to
regulatory approvals and the other transactions described in this
press release are not conditional on closing of the acquisition.
Assuming the acquisition is completed, once acquired, Salem
Partners intends to rebrand the Insurance Company as Ceres Life. In
anticipation of completing the acquisition of the Insurance
Company, CC Capital has taken steps that are expected to poise
Ceres Life for growth following closing, including identifying Ms.
Mulligan to lead Ceres Life, identifying and negotiating the
acquisition of the Insurance Company from an arm’s length third
party, and assisting with developing Ceres Life’s technology
platform. The remainder of the funds to be invested in Salem
Partners are expected to be used to pursue investments in insurance
or insurance-related, annuities, reinsurance, corporate
liabilities, distribution, asset and wealth management companies
and/or related investments.
In addition, in connection with the transaction Westaim will
restructure the ownership of Arena to acquire the remaining 49% of
the equity of Arena that it does not already own from BP LLC in
exchange for the issuance of profit interests entitling the members
of BP LLC and certain other front office investment team members of
Arena to receive distributions of 45% of the net profits of Arena
on an ongoing basis. CC Capital will be entitled to receive
distributions of 6% of the net profits of Arena on an ongoing basis
and Westaim will be entitled to receive the remainder of the net
profits of Arena. In connection with this restructuring, BP LLC’s
existing earn-in mechanism in respect of Arena will be eliminated.
The existing members of BP LLC are Dan Zwirn and Lawrence Cutler,
each of whom are members of senior management of Arena and who
collectively own 0.84% of the outstanding common shares of Westaim
as of the date hereof.
Ceres Life and Arena will enter into an investment management
agreement pursuant to which Arena is expected to manage up to 90%
of Ceres Life’s total investible assets.
Following the completion of the transaction, subject to the
approval of a committee of the Westaim Board of Directors, Westaim
intends to implement a share buyback to repurchase up to USD $100
million of Westaim common stock at CAD $5.00 to $5.25 per common
share, returning capital to shareholders at accretive values.
The Investor and Westaim have entered into an investment
agreement pursuant to which, among other things, CC Capital will
acquire approximately 71.9 million shares of Westaim, representing
a 36% ownership interest in the Company, for CAD $4.75 per share in
cash, an approximately 18.2% premium to the closing price of
Westaim’s shares on October 8, 2024, the last trading day prior to
the announcement of the transaction and an approximately 25%
premium to the 180-day volume weighted average price prior to
announcement. Pursuant to the investment agreement, the Investor
will also receive (i) warrants entitling it to acquire up to an
additional approximately 7.8 million shares of Westaim, which is
expected to represent approximately 3% of FDSO following closing of
the transaction, exercisable for a period of five years following
closing at an exercise price of CAD $4.02 per share (subject to
customary adjustments), which warrants will vest in the event that
the Share Price Target is met; and (ii) warrants entitling it to
acquire up to an additional approximately 23.5 million shares of
Westaim, which is expected to represent approximately 9% of FDSO
following closing of the transaction, exercisable for a period of
five years following closing at an exercise price of CAD $4.75 per
share (subject to customary adjustments). The number of shares
issuable pursuant to the warrants are subject to customary
adjustments and adjustments to maintain the percentage of issued
and outstanding shares issuable pursuant to the warrants following
completion of the share buyback. Mr. Chu has ultimate beneficial
ownership and control of the Investor.
Pursuant to the investment agreement, Westaim intends to
implement a plan of arrangement under the Business Corporations Act
(Alberta) pursuant to which, among other things, Westaim will
change its jurisdiction of incorporation from Alberta to Delaware
and implement a consolidation of Westaim’s shares on the basis of
one post-consolidation share for every six pre-consolidation
shares. As of the date hereof there are 128.2 million common shares
of Westaim outstanding and following the share consolidation there
are expected to be 200.1 million common shares of Westaim
outstanding on a pro forma basis including CC Capital’s investment
in Westaim, supporting Westaim’s efforts to enhance its
attractiveness to new investors. All numbers provided elsewhere in
this press release have not been adjusted for the
consolidation.
Pursuant to the investment agreement, Westaim has agreed to a
plan to monetize its interest in the Arena FINCOs to provide equity
capital for the insurance business.
In connection with the transactions, management of Westaim and
Arena are expected to receive stock options equal to an aggregate
of 8% of issued and outstanding Westaim shares as of closing of the
transaction. Such stock options will be issued pursuant to a new
equity incentive plan to be adopted by Westaim effective on closing
of the transaction (subject to receipt of required TSXV and
shareholder approvals). As of the date hereof, management of
Westaim and Arena, on a collective basis, owns approximately 13.92%
of the issued and outstanding shares of Westaim.
In connection with the transaction, Westaim and an affiliate of
CC Capital (the “Consultant”) have entered into a consulting
agreement in respect to the implementation of Westaim’s asset
management strategy. Pursuant to the consulting agreement, Westaim
will appoint Richard DiBlasi, Managing Director at CC Capital, as
its Chief Strategy Officer.
The Consultant will provide certain consulting services to
Westaim and in exchange, the Consultant will receive a customary
expense reimbursement and performance-based restricted stock units
of Westaim to be issued on closing of the transaction pursuant to
the new equity incentive plan to be adopted by Westaim on closing
of the transaction (subject to receipt of required TSXV and
shareholder approvals) representing 2% of the issued and
outstanding Westaim shares following closing of the transaction. In
addition, pursuant to the consulting agreement, for so long as the
Investor is entitled to nominate at least two director nominees,
the Consultant will be entitled to receive ongoing future grants of
performance-based restricted stock units representing 25% of the
Westaim shares underlying equity compensation grants to directors
or officers of Westaim from time to time.
Investor Rights Agreement
The investment agreement contemplates that, contemporaneously
with the closing of the transaction, the Investor and Westaim will
enter into an investor rights agreement pursuant to which the
Investor will be granted the following rights.
Board Representation
As described above, following closing of the transaction, the
Investor will be entitled to nominate five out of the 11 nominees
to the Westaim Board of Directors, subject to certain stepdowns
based on ownership thresholds and value, which vary over time.
In addition, as described above, in the event the Share Price
Target is met, the Investor will have the right to nominate a sixth
nominee to the 11-member Westaim Board of Directors.
Participation Rights
In connection with certain issuances of securities by Westaim
(each, a “Subsequent Offering”), the Investor will have the right
to subscribe for and to be issued, on a private placement basis and
substantially on the terms and conditions of such Subsequent
Offering, securities that will result in the Investor owning the
same percentage of Westaim shares, on a partially diluted basis,
that it owned immediately prior to the completion of the Subsequent
Offering.
Registration Rights
The Investor will have the right, subject to certain limitations
and to the extent permitted by applicable law, to require Westaim
to file a prospectus and/or a registration statement under
applicable securities laws qualifying the Westaim shares held by
the Investor for distribution in Canada and/or the United States.
In addition, the Investor may, in certain circumstances, require
Westaim to include shares held by the Investor in certain proposed
distributions of shares in Canada and/or the United States by
Westaim for its own account.
Standstill and Transfer Restrictions
For a period of 36 months following closing of the transaction,
the Investor will agree not to, and shall cause its affiliates not
to, directly or indirectly, acquire or agree to acquire or make any
proposal or offer to acquire any voting shares or convertible
securities of Westaim that would cause the Investor’s aggregate
beneficial ownership to exceed 49% of the issued and outstanding
Westaim shares, other than pursuant to the exercise by the Investor
or its affiliates of the warrants acquired pursuant to the
transaction.
In addition, the Investor has agreed not to effect, seek, offer,
or propose any change of control transaction (as defined in the
investor rights agreement), pursuant to which the Investor,
together with its affiliates or any other persons acting in
concert, becomes the beneficial owner of more than 50% of the
then-outstanding Westaim shares other than pursuant to the exercise
by the Investor or its affiliates of the warrants, subject to
certain exceptions.
For a period of 24 months following closing of the transaction,
the Investor will be prohibited from knowingly transferring any
shares or convertible securities of Westaim to any person that,
following such transfer, would, either alone or together with
persons acting jointly or in concert, beneficially own 10% or more
of the shares of Westaim, subject to certain exceptions.
Voting Support
During the 36 month period following closing, the Investor will
agree to vote its shares in favour of the election of each
independent director nominated by Westaim for election to the
Westaim Board of Directors and to not vote any shares in favour of
any shareholder nomination to the Westaim Board of Directors (other
than the Investor’s nominees) not approved by the Westaim Board of
Directors or any proposal or resolution to remove any independent
director serving on the Westaim Board of Directors (other than an
Investor nominee).
Approval Rights
Pursuant to the investor rights agreement, and subject to
certain exceptions and, depending on the matter, fallaways
depending on the number of director nominees the Investor is
entitled to nominate at a given time, the prior written consent of
the Investor will be required for, among other things (i) any
material amendments to the constating documents of Westaim or any
of its subsidiaries, as well as any amendments that would adversely
affect the rights of the Investor; (ii) the removal, termination,
or replacement of senior officers of Westaim or Arena and material
changes to their compensation and terms of employment; (iii) any
reclassification, recapitalization, reorganization, or
restructuring that may adversely impact the rights of the Investor
of existing shareholders of Westaim; (iv) any repurchase,
redemption, or acquisition of shares or convertible securities of
Westaim or any of its subsidiaries; (v) the declaration of any
dividend on any share or convertible security of Westaim, subject
to certain exceptions; (vi) entering into financing arrangement or
incurring indebtedness in excess of USD $15 million or prepaying
any indebtedness; (vii) any related-party agreements between
Westaim, Arena or any of their respective subsidiaries, on the one
hand, and any director, executive officer or other affiliate or
related-party of Westaim, Arena or any of their respective
subsidiaries, on the other hand, other than compensation and
incentive awards in the ordinary course of business and certain
other exceptions; (viii) entering into any material new line of
business or changing the nature of Westaim’s business or the
business of any subsidiaries; (ix) investments, acquisitions,
dispositions, or divestitures with an aggregate value in excess of
USD $3 million; (x) appointing or removing Westaim’s or any of its
subsidiaries’ auditors or implementing any material change to
accounting principles or practices; (xi) any change of control or
sale of a majority of the assets of Westaim; (xii) any increase or
decrease to the number of directors on the Westaim Board of
Directors, the number of managers on the Arena Board of Managers or
the number of directors constituting the board of directors or
similar governing body of any subsidiary of the Company; and (xiii)
the adoption, amendment, or termination of any security based
compensation plan of Westaim.
Further, approval of the majority of the Westaim Board of
Directors and each of the Investor’s nominees on the Westaim Board
of Directors at such time will be required to, among other things
(i) issue equity securities or securities convertible into equity
securities of Arena or any of its subsidiaries; (ii) repurchase,
redeem, or acquire any equity securities or securities convertible
into equity securities of Arena or any of its subsidiaries; (iii)
the sale of all or substantially all of the properties or assets of
Arena and its subsidiaries, taken as a whole, or any change in
control of Arena; (iv) any increase or decrease to the number of
members constituting the Arena Board of Managers; and (v) any
amendments to the governing documents of Arena.
Finally, until the Share Price Target is met, approval of the
majority of the Westaim Board of Directors (including at least two
directors that are not Investor nominees) will be required for,
among other things (i) the sale of all or substantially all of the
properties or assets of Arena and its subsidiaries, taken as a
whole, or any change in control of Arena, subject to certain
exceptions; (ii) the liquidation, dissolution, winding-up or
petitioning for bankruptcy of Westaim or any material subsidiary;
(iii) declaring any dividend or making any other payment or
distribution on account of any shares or convertible securities of
Westaim that is material to Westaim and its subsidiaries, taken as
a whole; (iv) entering into any new line of business or materially
changing the nature of Westaim’s business; (v) amending the
constating documents of Westaim in a manner that would affect the
governance rights, obligations, or preferences of the parties to
the investor rights agreement; and (vi) increasing the number of
directors constituting the Westaim Board of Directors.
Shareholder Approval
The transaction is subject to the receipt of the required
shareholder approvals to be obtained at a special meeting of
shareholders of Westaim to approve the transaction, including: (i)
approval of the redomestication and reverse share split
contemplated by the plan of arrangement by (A) two-thirds of the
votes cast; and (B) if and to the extent required, a majority of
the votes cast excluding any shareholders that are required to be
excluded in accordance with Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions,
(ii) approval of the CC Capital investment, including the creation
of a new Control Person (as such term is defined under the policies
of the TSXV) of Westaim, by (A) two-thirds of the votes cast; and
(B) a simple majority of votes cast, excluding any shareholders
that are required to be excluded in accordance with the policies of
the TSXV, and (iii) approval of the new equity incentive plan by a
simple majority of the votes cast (excluding votes cast in respect
of common shares held by insiders who could receive equity
compensation grants under the plan and their respective associates
and affiliates, amounting to a total of 12,619,563 common shares,
representing 9.85% of Westaim’s issued and outstanding common
shares). At the special meeting, shareholders will also vote upon
the election of directors to reconstitute the Westaim Board of
Directors on closing as described above and any other matters
required by the TSXV.
Aspects of the restructuring of Arena may be considered to be a
“related party transaction” under Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions as
a result of the principals of BP LLC being insiders of Westaim. As
a result, the restructuring may require approval of a majority of
the votes cast by Westaim shareholders excluding any shareholders
that are required to be excluded in accordance with Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions, unless an exemption is available.
Special Committee and Board Recommendation
A Special Committee comprising unconflicted members of the Board
of Directors of Westaim was formed to consider the transaction. BMO
Nesbitt Burns Inc. (“BMO Capital Markets”), the financial advisor
to the Special Committee and the Board of Directors, has delivered
an opinion to the Special Committee and the Board of Directors to
the effect that, as of the date thereof and based upon and subject
to the various assumptions, limitations and qualifications set
forth therein, the transactions contemplated by the investment
agreement are fair, from a financial point of view, to Westaim.
The Westaim Board of Directors, following receipt of the
unanimous recommendation of the Special Committee, determined that
the transaction is in the best interests of Westaim and is
unanimously recommending that shareholders of Westaim vote in favor
of the transaction at the special meeting of shareholders to
approve the transaction.
Closing
The parties expect to complete the transaction by the end of the
first quarter of 2025, subject to receipt of certain regulatory
approvals including, without limitation, approval of the TSXV,
approval by Westaim shareholders and satisfaction of other
customary closing conditions. Westaim shareholders holding in the
aggregate approximately 35% of outstanding common shares of Westaim
have agreed to vote their shares in support of the transaction.
Salem Partners’ acquisition of Ceres Life and Westaim’s acquisition
of the remaining equity interest in Arena are contingent on the
completion of CC Capital’s investment in Westaim, but the
completion of Salem Partners’ acquisition of Ceres Life is not a
condition to completion of the other transactions.
Conference Call and Presentation
Chinh Chu, Cameron MacDonald, Deanna Mulligan, and Dan Zwirn
will host a conference call today, October 9, 2024, at 10:00 a.m.
ET to discuss the strategic combination. A live webcast of the
conference call and related replay will be available on the
investor relations section of Westaim’s website at
https://westaim.com/investors/investor-presentations/. You may also
listen to the conference call by dialing (800) 715-9871 (U.S. /
Canada) or +1 (646) 307-1963 (International) and giving the
passcode 9876931.
A copy of the investor presentation will be made available on
Westaim’s investor relations website in advance of the conference
call.
Additional Information
Further information regarding the transaction will be included
in the management information circular to be mailed to shareholders
in connection with the special meeting of shareholders to approve
the transaction as well as subsequent press releases regarding the
transaction. Copies of the investment agreement and certain
exhibits thereto, including the form of warrants and the investor
rights agreement, will be filed on Westaim’s profile on SEDAR+ at
www.sedarplus.ca. The above descriptions of the terms and
conditions of the investment agreement and other associated
agreements are qualified in their entirety by the terms of such
agreements.
Advisors
Lazard is serving as lead financial advisor, with GreensLedge
Capital Markets LLC, Macquarie Capital, and Rothschild & Co
serving as financial advisors to CC Capital in connection with the
transaction. Skadden, Arps, Slate, Meagher & Flom LLP is
serving as US legal advisor and Blake, Cassels & Graydon LLP is
serving as Canadian legal advisor to CC Capital.
PJT Partners is serving as lead financial advisor and Dentons
Canada LLP is serving as Canadian legal advisor to Westaim on this
transaction.
BMO Capital Markets is serving as financial advisor, Willkie
Farr & Gallagher LLP is serving as US legal advisor and
Stikeman Elliott LLP is serving as Canadian legal advisor to the
Special Committee on this transaction.
Campbell Lutyens is serving as financial advisor and Ropes &
Gray, LLP and Dechert LLP are serving as legal advisors to Arena on
this transaction.
About CC Capital
CC Capital Partners is a private investment firm based in New
York, NY that was founded in late 2015 by Chinh Chu with a focus on
investing in and operating high-quality businesses for the long
term. The firm evaluates investments anticipating a hold-period
well beyond that of a typical private equity firm and funds its
investments through a variety of permanent capital sources. CC
Capital frequently partners with highly-seasoned executives,
managers and owners seeking to create significant value
post-acquisition. More information on CC Capital can be found at
www.cc.capital.
About Westaim
Westaim is a Canadian investment company specializing in
providing long-term capital to businesses operating primarily
within the global financial services industry. The company invests,
directly and indirectly, through acquisitions, joint ventures and
other arrangements, with the objective of providing its
shareholders with capital appreciation and real wealth
preservation. Westaim’s strategy is to pursue investment
opportunities with a focus towards the financial services industry
and grow shareholder value over the long term. Westaim’s
investments include significant interests in Arena and the Arena
FINCOs. Arena and Arena FINCOs are defined in the notes to
Westaim’s audited consolidated financial statements for the year
ended December 31, 2023, and the related management discussion and
analysis. The common shares of Westaim are listed on the TSXV under
the trading symbol “WED”.
About Ceres Life
Ceres Life Insurance Company is a cloud-native, highly scalable,
de novo annuity platform, expected to launch in the first quarter
of 2025. Inspired by the belief that technology can reinvent the
way insurance providers meet the needs of investors, Ceres Life is
building a nimble, highly efficient, and risk-conscious insurance
company that provides simple-to-understand and easily accessible
annuity products to create better outcomes for policyholders. Ceres
Life will be led by Deanna Mulligan, former CEO and Chair of
Guardian Life Insurance. For more information, see
www.CeresLifeInsurance.com.
About Arena Investors, LP
Arena is a global institutional asset manager founded in
partnership with The Westaim Corporation with deep expertise in
credit and asset-oriented investments, including the full spectrum
of corporate, real estate and structured finance opportunities.
With approximately USD $3.5 billion of invested and committed
assets under management as of October 2024, and a team of over 180
employees in offices around the world, Arena provides creative
solutions for those seeking capital by bringing together
individuals with decades of experience, a track record of comfort
with complexity, and the flexibility to engage in transactions that
cannot be addressed by banks and other conventional financial
institutions. For more information, please visit
www.arenaco.com.
Cautionary Note and Forward-Looking Statements
Certain statements in this press release and any related oral
statements may constitute “forward-looking statements” or
“forward-looking information” within the meaning of applicable
Canadian and United States securities laws, including pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 (collectively, “forward-looking statements”).
Any statements that express or involve discussions with respect to
predictions, target yields and returns, internal rates of return,
expectations, beliefs, plans, projections, objectives, Arena
operating leverage and assets under management, growth, assumptions
or future events or performance (often, but not always using words
or phrases such as “expects”, “does not expect”, “is expected”,
“seeks”, “endeavours”, “anticipates”, “does not anticipate”,
“positioned”, ”confident”, “plans”, “advantaged”, “estimates”,
“believes”, “does not believe” or “intends”, “does not intend” or
stating that certain actions, events or results may, could, would,
might or will occur or be taken, or achieved) are not statements of
historical fact and may be “forward-looking statements”. In
particular, but without limiting the foregoing, this press release
contains forward-looking statements pertaining to the new operating
platform, the strategic partnership, including the anticipated
benefits therefrom and financial projections resulting therefrom,
the terms of the transaction, the use of proceeds from the
transaction, anticipated timing of closing the transaction, the
share buyback and Westaim’s strategies (collectively, the
“Transaction Matters”). The Transaction Matters are subject to
risks, uncertainties and other factors that could cause Westaim’s
actual results to differ, possibly materially, from those in the
specific projections, goals, assumptions and statements herein
including, but not limited to: (i) that the parties may be unable
to complete or satisfy some or all of the Transaction Matters
because, among other reasons, conditions to the completion of the
Transaction Matters may not be satisfied or waived, including the
failure to obtain Westaim’s shareholder approval for some or all of
the Transaction Matters or that a governmental authority such as
the TSXV may prohibit, delay or refuse to grant approval for the
consummation of some or all of the Transaction Matters in
acceptable terms; (ii) uncertainty as to the timing of completion
of the Transaction Matters; (iii) the occurrence of any event,
change or other circumstance that could give rise to the
termination of the investment agreement or other documents entered
into by the parties in connection with the Transaction Matters;
(iv) risks related to disruption of management’s attention from
Westaim’s ongoing business operations due to the Transaction
Matters; (v) the effect of the announcement of the Transaction
Matters on Westaim’s relationships with its clients, employees,
regulators and customers; and (vi) the outcome of any legal
proceedings to the extent initiated against Westaim or others
following the announcement of the Transaction Matters, as well as
Westaim management’s response to any of the aforementioned factors.
Forward-looking statements are based on expectations, estimates,
assumptions, variables and projections as well as other relevant
factors at the time the statements are made that are inherently
uncertain, involve a number of risks and uncertainties which could
cause actual results or events to differ materially from those
presently anticipated. These include, but are not limited to, the
risk factors discussed in Westaim’s Annual Information Form for its
fiscal year ended December 31, 2023, which is available on SEDAR+
at www.sedarplus.ca, as same may be supplemented, modified or
superseded by a subsequently filed Annual Information Form or the
management information circular of Westaim relating to the proposed
transaction. Except as required by law, Westaim does not have any
obligation to advise any person if it becomes aware of any
inaccuracy in or omission from any forward-looking statement or to
update such forward-looking statement.
Although management of Westaim has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements or
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended and there
can be no guarantee that any of the forward-looking statements
contained herein, including the estimates or projections (including
projections of revenue, expense and earnings) set forth herein,
will be achieved to any extent. Completion of the transaction is
subject to the satisfaction of certain regulatory requirements and
the receipt of all necessary regulatory approvals, shareholder
approval and the approval of the TSXV. There can be no certainty,
nor can Westaim provide any assurance, that these conditions will
be satisfied or, if satisfied, when they will be satisfied. There
can be no assurance that the transactions described in this press
release, or the anticipated benefits therefrom, will occur on the
terms as proposed and described herein or at all. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Nothing contained herein is, or
shall be relied upon as, a promise or representation as to past or
future performance. Past performance is not a reliable indicator of
future results and should not be relied upon for any reason.
Accordingly, you should not place undue reliance on any
forward-looking statements and forward-looking information
contained herein. Forward-looking statements contained herein speak
only as of the date of this press release, and Westaim hereby
expressly disclaims any obligation to release publicly any updates
or revisions to any forward-looking statement, forward looking
information or financial information contained herein to reflect
any change in expectations with regard thereto or change in events,
conditions or circumstances on which any statement is based, except
in accordance with applicable securities laws.
The information provided herein does not constitute an offer or
solicitation regarding any investment products offered by
Arena.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this press release.
The contents of any websites referenced in this press release
are not incorporated by reference herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241009456695/en/
For CC Capital Kate Thompson / Melissa Johnson Joele Frank,
Wilkinson Brimmer Katcher 212-355-4449
For Westaim J. Cameron MacDonald, President and Chief Executive
Officer info@westaim.com (416) 969-3333
For Ceres Life media@CeresLifeInsurance.com
For Arena Investors, LP Prosek Partners Joshua Clarkson
pro-arena@prosek.com
Parag Shah ir@arenaco.com
The Westaim (TSXV:WED)
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