Niagara Ventures Announces Going Private Transaction

TORONTO, Feb. 21, 2017 /CNW/ - Niagara Ventures Corporation (the ("Corporation") (TSX VENTURE:NIA) announced today that its board of directors has unanimously approved (with Ron McEachern as an interested director abstaining) a proposed going private transaction (the "Transaction") to be completed by way of a consolidation of the issued and outstanding common shares of the Corporation (the "Consolidation").

In connection with the Transaction, the Corporation has entered into a definitive consolidation agreement (the "Consolidation Agreement") with One St. Thomas Holdings Inc. ("One St. Thomas"), the Corporation's largest shareholder (holding an aggregate of 3,980,866 common shares, representing approximately 19.9% of the issued and outstanding common shares)One St. Thomas is a corporation owned and controlled by Ron McEachern, the Chief Executive Officer and a director of the Corporation, together with his spouse.

Pursuant to the Consolidation, the outstanding common shares of the Corporation will be consolidated on the basis of one post-consolidated common share for each 3,980,866 pre-consolidated common shares.  One St, Thomas will be the only shareholder of the Corporation to receive a whole common share, on a post-consolidation basis, pursuant to the Consolidation.  As fractional shares will not be issued pursuant to the Consolidation, each holder of outstanding common shares, other than One St. Thomas, will receive $0.015 in cash for each common share held immediately prior to the effective time of the Consolidation.  After completion of the Consolidation, One St. Thomas will be the sole shareholder of the Corporation.

The Consolidation will require the approval of 66 2/3% of the votes cast by shareholders of the Corporation, voting in person or by proxy, at a special meeting of the shareholders of the Corporation to be called to consider the Consolidation (the "Meeting") and will also require "majority of the minority" approval under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").  For the purposes of the "majority of the minority" approval requirement under MI 61-101, the votes cast by One St. Thomas in respect of the Consolidation will be excluded.  The Consolidation is exempt from the formal valuation requirement set out in MI 61-101 pursuant to section 4.4(a) of MI 61-101.

In connection with its review and consideration of the Consolidation, the board of directors of the Corporation established an independent committee comprised of all of the directors of the Corporation other than Ron McEachern.  This committee concluded that the Consolidation is in the best interests of the Corporation and that the Consolidation is fair to Voting Shareholders (other than One St. Thomas).  Based on these determinations, the board of directors (with Ron McEachern as an interested director abstaining) has approved the Consolidation Agreement and the Consolidation and recommends that shareholders of the Corporation vote in favour of the Consolidation.

The directors of the Corporation (excluding Ron McEachern and One St. Thomas), collectively holding common shares representing approximately 21.3% of the issued and outstanding common shares, intend to vote all of their common shares in favour of the Consolidation.

In its consideration of the Transaction, the independent committee considered a variety of factors.  These factors will be detailed in the management information circular to be mailed to shareholders in connection with the Meeting.  Ultimately, however, the independent committee determined that the business of the Corporation, given its current stage of development and current financial situation (including its inability to source additional financing on terms and conditions acceptable to it), was not sustainable as public company.

The operating costs of the Blu-Dot beverage business (the Corporation's only active business) have consistently exceeded revenues and this has consistently depleted the cash resources of the Corporation.  The Corporation requires significant and sustainable financing in order to continue to develop and expand the Blu-Dot business and achieve profitability.  The Corporation, despite its best efforts, has not been able to source additional financing on terms and conditions acceptable to it and, without such additional financing, the Blu-Dot beverage business is not considered by the independent committee to be viable within the existing public structure of the Corporation. 

Under applicable securities laws a broad range of regulatory obligations are imposed on companies, such as the Corporation, having public shareholders.  These compliance costs are a significant drain on the Corporation's already limited cash flows.  The independent directors believe that the significant time and costs associated with meeting the legal and regulatory obligations to public shareholders cannot be justified in view of the Corporation's current financial situation.  As such, the independent committee believes that the Consolidation is in the best interests of the Corporation and believes that shareholders (other than One St. Thomas) should be presented with the opportunity to realize some value for their shares pursuant to the Consolidation

Subject to the approval of the Consolidation at the Meeting and the acceptance of the TSX Venture Exchange, the Corporation intends to file articles of amendment to effect the Consolidation.  Following the completion of the Consolidation, the Corporation intends to apply to have its common shares delisted from the TSX Venture Exchange and intends to apply to cease to be a reporting issuer with the applicable securities regulatory authorities.

A complete copy of the Consolidation Agreement will be filed by the Corporation under its profile on SEDAR at www.sedar.com

In addition, further information regarding the Consolidation will be contained in the management information circular in respect of the Meeting which will be filed on SEDAR at the time that it is mailed to shareholders.  All shareholders are urged to read the information circular once it becomes available, as it will contain additional important information concerning the Consolidation.  The Corporation expects to mail the information circular to shareholders on March 29, 2017 or earlier and to hold the Meeting on April 19, 2017.  The parties expect that the Consolidation will be completed shortly after the Meeting, subject to satisfaction of all conditions to closing set out in the Consolidation Agreement.

Forward Looking Information

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws.  Forward-looking statements in this press release include, without limitation, statements relating to: the Transaction and the proposed Consolidation under the Consolidation Agreement; the ability of the parties to satisfy the conditions to closing of the Transaction; the mailing of the management information circular in connection with the Meeting and anticipated timing thereof; and the anticipated timing of the completion of the Consolidation.  Words such as "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "potential" and similar expressions may be used to identify these forward-looking statements although not all forward-looking statements contain such words.

Forward-looking statements involve significant risks, uncertainties and assumptions.  Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including risks associated with the Consolidation, such as the failure to satisfy the closing conditions contained in the Consolidation Agreement, events which may give the parties (or a party) a basis on which to terminate the Consolidation Agreement, and the ability of the parties to complete and mail the information circular in respect of the Meeting and hold the Meeting within the time frames indicated.  Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release.  These factors should be considered carefully and reader should not place undue reliance on the forward-looking statements.  These forward-looking statements are made as of the date of this press release and, other than as required by law, the Corporation does not intend to or assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

SOURCE NIAGARA VENTURES CORPORATION

For further information: Miles Atkinson, Chief Financial Officer, Niagara Ventures Corporation, (647) 388-5517, miles@niagaraventures.ca

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NIAGARA VENTURES CORPORATION

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