Mr. Trevor White, the President and Chief Executive Officer of Sitka, commented, “We are very excited to announce this Transaction. The execution of a definitive agreement is the culmination of a lot of effort by the parties, as well as their advisors and stakeholders. Synex’s British Columbia based and technologically diverse portfolio of operating, construction ready, and development projects provides a strategic and timely opportunity for Sitka to scale its platform. We look forward to progressing the Transaction to close over the coming months.”

Additional Transaction Details

The Transaction will be implemented by way of a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia). Under the terms of the Arrangement Agreement, Sitka will acquire all of the issued and outstanding Company Shares, with each Shareholder receiving the Transaction Consideration for each Company Share held.

Completion of the Transaction is, among other customary matters, subject to:

• Approval by: (i) at least two-thirds of the votes cast by Shareholders at a special meeting (the “Company Meeting“); and (ii) a majority of the votes cast by Shareholders at the Company Meeting (excluding the votes cast by persons whose votes may not be included in determining minority approval of a “business combination” in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“));

• Supreme Court of British Columbia approval of the Transaction; and

• Completion of all required regulatory approvals, including from the British Columbia Hydro and Power Authority and the British Columbia Utilities Commission, relating to the Transaction.

Additional details of the Transaction will be described in the management information circular that will be mailed to Shareholders (the “Company Circular“) in connection with the Company Meeting to approve the Transaction.

All of the directors and officers of the Company, who collectively own approximately 67% of the outstanding Company Shares, have entered into voting and support agreements pursuant to which they have agreed to vote their Company Shares in favor of the Transaction.

The Arrangement Agreement contains customary terms and conditions, including non-solicitation provisions which are subject to the Company’s right to consider and accept a superior proposal that satisfies certain customary requirements, subject to a matching right in favour of Sitka. The Arrangement Agreement provides for the payment by the Company to Sitka of a termination fee of C$600,000 in certain circumstances, including where the Company has accepted a superior proposal and terminates the Arrangement Agreement. The Arrangement Agreement also provides for the payment by the Company to Sitka or Sitka to the Company, as applicable, of an expense reimbursement fee if the Arrangement Agreement is terminated in certain specified circumstances.

A copy of the Arrangement Agreement will be available through the Company’s filings with the securities regulatory authorities in Canada on SEDAR+ at www.sedarplus.ca.

In connection with the closing of the Transaction, the Company Shares will be delisted from the TSX and the Company will apply to cease to be a reporting issuer.

Recommendation of the Special Committee and the Board

The Special Committee, comprised of Richard McGivern and Danny Sgro, after receiving legal and financial advice, including the fairness opinions from the financial advisors discussed below, has unanimously recommended that the Board approve the Arrangement Agreement having determined, among other things, that the Transaction is fair to the Shareholders from a financial point of view.

The Special Committee has obtained a fairness opinion from each of Beacon Securities Limited (who acted as financial advisor to the Company in connection with the Transaction) and Morrison Park Advisors (who acted as independent financial advisor to the Special Committee in connection with the Transaction) to the effect that, as of the date of the Arrangement Agreement, and subject to the assumptions, limitations and qualifications set forth therein, the Transaction is fair to the Shareholders from a financial point of view.

After receiving the unanimous recommendation of the Special Committee and the fairness opinions discussed above, the Board unanimously determined: (i) that the Transaction is fair to the Shareholders from a financial point of view; (ii) that the Transaction is in the best interests of the Company; and (iii) to unanimously recommend to the Shareholders that they vote in favor of the resolution to approve the Transaction at the Company Meeting.

Additional details concerning the rationale for the recommendation made by the Special Committee and the Board, including copies of the fairness opinions prepared by the financial advisors, will be set out in the Company Circular to be filed and mailed to the Shareholders in the coming weeks and which will be available under Synex’s profile on SEDAR+ at www.sedarplus.ca.

Multilateral Instrument 61-101

The Transaction constitutes a “business combination” under MI 61-101 for the Company as an insider of the Company holding approximately 2% of the Company Shares will receive a “collateral benefit” as a result of the value of an employee termination benefit to be received in connection with the Transaction being in excess of 5% of the value of the aggregate consideration to be received by such insider pursuant to the Arrangement Agreement.

As required by MI 61-101, the Company will seek the requisite majority of the minority approval of the Transaction from the Shareholders at the Company Meeting, excluding the votes of such insider whose votes are required to be excluded for the purposes of “minority approval” under MI 61-101 in the context of a “business combination”.

Advisors

Dentons Canada LLP is acting as legal advisor to the Company. Stikeman Elliott LLP is acting as legal advisor to Sitka. Beacon Securities Limited is acting as financial advisor to the Company. Morrison Park Advisors is acting as independent financial advisor to the Special Committee.

About Synex Renewable Energy Corporation

Synex is a Vancouver, British Columbia based company engaged in the development, acquisition, ownership, and operation of renewable energy projects in Canada. It has ownership interests in 11 MW of operating hydro projects in British Columbia and owns a Vancouver Island grid connection and utility carrying on business as Kyuquot Power Ltd. The Company also has 9.4 MW of construction ready run-of-river projects, applications, and land tenures on another 24 potential hydroelectric sites totaling over 150 MW of capacity, and approximately 16 wind development sites that could provide up to 4,700 MW of clean power in British Columbia.

For further information, visit www.synex.com.

About Sitka Power Inc.

Sitka Power is a small scale Canadian renewable energy developer and independent power producer, headquartered in Calgary, Alberta, who is active in British Columbia, Alberta, Saskatchewan, and Ontario.

For further information, visit www.sitka-power.ca.

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Such forward-looking information or statements (“FLS“) are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such FLS may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. FLS contained or referred to in this press release includes, but is not limited to, statements regarding the anticipated benefits of the Transaction, the proposed timing and various steps contemplated in respect of the Transaction, the holding of and approval by the Shareholders of the Transaction at the Company Meeting and the results of the completion of the Transaction, the likelihood that the Transaction will be consummated, receipt of required regulatory and court approvals, payment of the cash consideration, the possibility of any termination of the Arrangement Agreement in accordance with its terms, and delisting of the Company Shares and changes to reporting issuer status.

FLS is based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although the Company believes that the expectations reflected in such FLS is reasonable, undue reliance should not be placed on FLS because the Company can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such FLS include, without limitation, the following factors, many of which are beyond the Company’s control and the effects of which can be difficult to predict: (a) the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder, court and regulatory approvals and other conditions of closing necessary to complete the Transaction or for other reasons; (b) the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; (c) risks relating to the abilities of the parties to satisfy conditions precedent to the Transaction; (d) a third party superior proposal materializing prior to the completion of the Transaction; (e) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Transaction, including changes in economic conditions, interest rates or tax rates; (f) changes and trends in the Company’s industry and the global economy; and (g) the identified risk factors included in the Company’s public disclosure, including the annual information form dated September 27, 2024, which is available on SEDAR+ at www.sedarplus.ca. If any of these risks or uncertainties materialize, or if the assumptions underlying the FLS prove incorrect, actual results or future events might vary materially from those anticipated in the FLS. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in FLS, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such FLS. The FLS in this press release reflect the current expectations, assumptions, judgements and/or beliefs of the Company based on information currently available to the Company, and are subject to change without notice.

Any FLS speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any FLS, whether as a result of new information, future events or results or otherwise, except as required under applicable securities laws. The FLS contained in this press release are expressly qualified by this cautionary statement. For more information on the Company, please review the Company’s continuous disclosure filings that are available at www.sedarplus.ca.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The TSX accepts no responsibility for the adequacy or accuracy of this release.

For more information, please contact:

Daniel J. Russell
President & CEO, Synex Renewable Energy Corporation
4248 Broughton Ave., Niagara Falls, Ontario L2E 0A4
Phone (905) 329-5000
daniel.russell@synex.com

Sitka

Trevor White
President & CEO, Sitka Power Inc.
639 5 Ave SW #1050, Calgary, Alberta T2P 0M9
Phone (403) 999 8781
twhite@sitka-power.ca

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/246452