Axis Auto Finance Completes the Acquisition of Trend Financial Corp.

TORONTO, April 3, 2018 /CNW/ - Axis Auto Finance Inc. (TSXV: AXIS) ("Axis" or "the Company"), is pleased to announce that on April 2, 2018, it closed its acquisition (the "Acquisition") of all of the issued and outstanding securities of Trend Financial Corp. ("Trend").

"The closing of the Trend acquisition creates a powerhouse in the Canadian sub-prime auto lending market," said Ilja Troitschanski, Axis' Founder and President. "We are excited to welcome the Trend team to Axis and look forward to our future together."

"I want to commend the Axis deal team, the management at Trend, as well as our advisors for successfully getting this transaction closed," said Todd Hudson, Axis' CEO.  "We have become a clear leader in the Canadian sub-prime auto finance space and we intend to continue to grow Axis from coast to coast. The Trend deal puts us one step closer to that goal," he added.

The Acquisition was completed pursuant to a share purchase agreement dated March 6, 2018 (the "Share Purchase Agreement") for a total consideration of approximately $29.3 million, comprised of: (i) approximately $20.7 million in cash, inclusive of a $1 million holdback amount paid into escrow and releasable following the completion of the purchase price adjustments under the Share Purchase Agreement; (ii) the issuance of 3,252,244 common shares in the capital of Axis ("Common Shares") and 1,918,194 Common Share purchase warrants ("Warrants"); (iii) the issuance of 2,015,409 Common Shares and 2,562,933 Warrants, paid into escrow and, subject to certain exceptions, releasable no later than the date that is 19 months from the closing date of the Acquisition; and (iv) the issuance of a contingent 1,684,345 Common Shares and a contingent 2,141,929 Warrants, paid into escrow and payable in accordance with the terms of the Share Purchase Agreement. Each Common Share was issued at a deemed price of $0.70 per Common Share and each Warrant entitles the holder thereof to purchase a Common Share at a price of $0.90 at any time during a period of 36 months following the closing date of the Acquisition.

In addition, as previously disclosed, Axis issued an additional $3 million principal aggregate amount of extendible convertible unsecured subordinated debentures ("Debentures") to certain vendors of Trend, who subscribed for such Debentures with a portion of the cash entitled to be received by such vendors pursuant to the Acquisition. The Debentures are not listed or posted for trading on any exchange and are subject to a statutory four-month and a day hold.

The Acquisition was funded in part by a private placement financing (the "Offering") of subscription receipts ("Subscription Receipts") and Debentures, which closed on March 22, 2018 through a syndicate of underwriters co-led by Canaccord Genuity Corp. and INFOR Financial Inc. and including PI Financial Corporation and Raymond James Ltd. Pursuant to the Offering, Axis issued 10,440,784 Subscription Receipts at a price of $0.70 per Subscription Receipt for gross proceeds of approximately $7.3 million and $14.55 million aggregate principal amount of Debentures. In accordance with the terms of the Subscription Receipts, each Subscription Receipt was exchanged upon the closing of the Acquisition for one Common Share and the proceeds from the sale of the Subscription Receipts were released from escrow. Holders of Subscription Receipts are not required to take any action in order to receive their Common Shares.

INFOR Financial Inc. ("INFOR") acted as financial advisor to Axis in connection with the Acquisition and Dentons Canada LLP acted as legal counsel to Axis. In connection with the closing of the Acquisition, Axis will pay INFOR: (i) a cash advisory fee in connection with Axis' prior acquisition of Cars on Credit Financial Inc. and (ii) an advisory fee in connection with the Acquisition, satisfied in part by payment in cash and in part through the issuance of 321,428 Axis units ("Units") at a price of $0.70 per unit. Each Unit is comprised of 1 Common Share and one half of a Warrant, with each Warrant entitling the holder thereof to purchase a Common Share at a price of $0.90 at any time during a period of 36 months following the closing date of the Acquisition.

About Axis Auto Finance

Axis provides non-standard financing options targeting roughly 30% of Canadians (Source: Equifax) that do not qualify for traditional bank-type financing for their used vehicle purchase. Through personalized service and a commitment to building strong, long-lasting relationships with dealer partners, Axis continues to be one of Canada's fastest-growing auto-financing companies.

Further information on the Company can be found at www.axisautofinance.ca.

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

Forward looking Information

Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, available at www.sedar.com.

SOURCE Axis Auto Finance Inc.

For further information: Axis Auto Finance Inc., Ilja Troitschanski, President, [phone], [e-mail]

Related Links

www.axisautofinance.ca