TORONTO, July 4, 2013 /CNW/ – MCAN Mortgage Corporation (TSX:MKP) (“MCAN”, the “Company” or “we”) and Xceed Mortgage Corporation (TSX:XMC) (“Xceed”) are pleased to announce today that the previously announced acquisition of each of the issued and outstanding common shares of Xceed (“Xceed Shares”) pursuant to a court-approved plan of arrangement under the Business Corporations Act (Ontario) (the “Arrangement”) has closed. Xceed is now a wholly owned subsidiary of MCAN.
Pursuant to the Arrangement, holders of Xceed Shares were entitled to elect to receive Cdn$1.75 in cash or 0.118 of a common share of MCAN (the “MCAN Shares”) for each Xceed Share held, subject to pro-ration. Pursuant to the elections or deemed elections of holders of Xceed Shares and after giving effect to pro-rationing in accordance with the Arrangement, in consideration for the transfer of Xceed Shares, MCAN paid aggregate cash consideration equal to $30,292,062.50, and issued 1,531,903 MCAN Shares, to the holders of Xceed Shares.
The Xceed Shares will cease to be listed on the Toronto Stock Exchange on or about the close of business on July 8, 2013. Following the delisting of the Xceed Shares, Xceed will apply to the relevant securities regulatory authorities to cease being a reporting issuer in all of the provinces of Canada in which it is currently a reporting issuer.
“MCAN is pleased to have completed its acquisition of Xceed,” said William Jandrisits, MCAN’s President and Chief Executive Officer. “We look forward to integrating the two companies to achieve value for our shareholders. New capital received as part of this transaction allows approximately $120 million of new capacity for MCAN to grow.”
Material change reports relating to the Arrangement will be filed with the Canadian securities regulators and will be available under MCAN’s and Xceed’s respective profiles on SEDAR at www.sedar.com. MCAN’s material change report will also be available on MCAN’s website at www.mcanmortgage.com.
This press release may contain forward-looking statements, including statements regarding certain strategic benefits and operational, competitive and cost efficiencies expected to result from the Arrangement. These forward-looking statements can generally be identified as such because of the context of the statements and often include words such as “believes”, “anticipates”, “expects”, “plans”, “estimates” or words of a similar nature. These statements are based on current expectations, and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, technology change, global market activity, interest rates, changes in government and economic policy and general economic conditions in geographic areas where MCAN and Xceed operate. Reference is made to the risk factors disclosed in MCAN’s Annual Information Form dated March 26, 2013 which are incorporated herein by reference. Reference is also made to the risk factors disclosed in Xceed’s management proxy circular dated April 23, 2013. These and other factors should be considered carefully and undue reliance should not be placed on MCAN’s or Xceed’s forward-looking statements. Subject to applicable securities law requirements, neither MCAN nor Xceed undertakes to update any forward-looking statements.
MCAN is a public company listed on the TSX under the symbol MKP and is a reporting issuer in all provinces and territories in Canada. MCAN also qualifies as a mortgage investment corporation (“MIC”) under the Income Tax Act(Canada) (the “Tax Act”).
MCAN’s primary objective is to generate a reliable stream of income by investing its corporate funds in a portfolio of mortgages (including single family residential, residential construction, non-residential construction and commercial loans), as well as other types of financial investments, loans and real estate investments. MCAN employs leverage by issuing term deposits eligible for Canada Deposit Insurance Corporation (“CDIC”) deposit insurance up to a maximum of five times capital (on a non-consolidated tax basis) as permitted by the Tax Act. The term deposits are sourced through a network of independent financial agents. As a MIC, MCAN is entitled to deduct from income for tax purposes 100% of dividends, except for capital gains dividends, which are deducted at 50%. Such dividends are received by the shareholders as interest income and capital gains dividends, respectively.
MCAN also participates in the Canada Mortgage Bonds program, and other securitizations of insured mortgages.
About Xceed Mortgage
Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of residential mortgages that it originates inCanada. Xceed has approximately $0.8 billion of mortgages under administration.
SOURCE: MCAN Mortgage Corporation
For further information:MCAN Mortgage Corporation
President and Chief Executive Officer
Vice President and Chief Financial Officer
Xceed Mortgage Corporation
Chief Financial Officer
(416) 364-7944 Ext. 3434