TORONTO, March 20, 2016 /CNW/ - Smoothwater Capital Corporation ("Smoothwater") announced today that, from its announcement on March 23, 2015 regarding its investment in Equity Financial Holdings Inc. ("Equity") until February 17, 2016, it acquired ownership and control over an aggregate of 124,281 common shares of Equity on the open market (the "Market Purchases"). These common shares represent approximately 1.30% of the issued and outstanding common shares of Equity (based upon the 9,539,508 common shares stated to be issued and outstanding as at February 9, 2016 by Equity in its management's discussion and analysis for the year ended December 31, 2015 filed on SEDAR on February 9, 2016) (the "Outstanding Shares of Equity"). The Market Purchases were made by Smoothwater through the facilities of the Toronto Stock Exchange at an average price of $8.54 per share.
On March 18, 2016, Smoothwater acquired by way of a private agreement 676,600 common shares of Equity at a price of $8.60 per share (the "Private Purchase"). These common shares represent approximately 7.10% of the Outstanding Shares of Equity. Smoothwater made the Private Purchase using the "private agreement exemption" contained in Section 101.1 of the Securities Act (Ontario) through the facilities of the Toronto Stock Exchange.
Combined, the Market Purchases and the Private Purchase aggregate 800,881 common shares of Equity, representing approximately 8.40% of the Outstanding Shares of Equity.
After giving effect to the Market Purchases and the Private Purchase, Smoothwater had ownership and control over 2,601,331 common shares of Equity, representing approximately 27.27% of the Outstanding Shares of Equity, which are held for investment purposes.
Stephen J. Griggs ("Griggs") is the Chief Executive Officer and a director of Smoothwater, and a director and the Chair of the board of directors of Equity, and may be considered to be a "joint actor" with Smoothwater. Griggs exercises control over and has an ownership interest in Underwood Capital Partners Inc. ("Underwood"). Underwood has ownership and control over 38,137 common shares of Equity representing approximately 0.40% of the Outstanding Shares of Equity. Griggs is also the beneficial owner of 3,052 common shares of Equity pursuant to the employee share purchase plan of Equity, representing approximately 0.03% of the Outstanding Shares of Equity. Accordingly, Griggs exercises control and direction over 41,189 common shares of Equity representing approximately 0.43% of the Outstanding Shares of Equity. Griggs also participates in the deferred share unit plan of Equity available to directors in payment of their directors' fees. The common shares of Equity owned or controlled by Underwood and Griggs are held for investment purposes.
Smoothwater and Griggs together beneficially own or exercise control and direction over an aggregate of 2,642,500 common shares of Equity, representing approximately 27.70% of the Outstanding Shares of Equity.
In purchasing common shares of Equity pursuant to the Private Purchase, Smoothwater was entitled to rely on the "private agreement exemption" from the formal take-over bid rules set out in section 100.1(1) of the Securities Act (Ontario) because (i) the purchase of the Equity common shares was not made from more than five persons, (ii) the offer to purchase was not made generally to all holders of common shares of Equity, and (iii) the value of the consideration paid for the Equity common shares pursuant to the Private Purchase, including brokerage fees or commissions, was not greater than 115% of the market price of common shares of Equity on the Toronto Stock Exchange, as determined in accordance with section 1.3 of OSC Rule 62-504, Take-Over Bids and Issuer Bids.
Depending on market conditions, Smoothwater, Griggs and/or Underwood may from time to time in the future acquire or dispose of common shares of Equity through open market purchases, private agreements or otherwise for investment purposes.
This news release is issued pursuant to the early warning requirements of applicable Canadian securities laws. Smoothwater Capital will file early warning reports in accordance with applicable securities laws, copies of which will be available on SEDAR at www.sedar.com or upon request to Smoothwater Capital.
About Smoothwater Capital:
Smoothwater Capital Corporation is a leading Canadian activist investor, focusing on investing in small to midcap Canadian public companies where there is an identifiable path to significantly improve shareholder value. Smoothwater works to effect change in targeted companies, often collaboratively with institutional and other like-minded investors who hold material positions but are not able to take on the time consuming and costly activist role.
SOURCE Smoothwater Capital Corporation
For further information: For further information or to obtain a copy of the related early warning report, please contact: Smoothwater Capital Corporation, Suite 2500, 120 Adelaide Street West, Toronto, Ontario, M5H 1T1, Attention: Stephen J. Griggs, Chief Executive Officer, 416.644.6582, [email protected]