Aston Hill Financial Inc.
TSX : AHF

Aston Hill Financial Inc.

July 15, 2013 16:38 ET

Aston Hill Announces Agreement to Acquire 80% of the Closed-End Fund Business of Connor, Clark & Lunn, and Related Bought Deal Financing

CALGARY, ALBERTA--(Marketwired - July 15, 2013) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) is pleased to announce that it has entered into a share purchase agreement with Connor, Clark & Lunn Financial Group Ltd. ("CC&L FG") (the "Agreement") pursuant to which Aston Hill will acquire, subject to certain conditions, an 80% interest (the "Acquisition") in Connor, Clark & Lunn Capital Markets Inc. ("CC&L CM").

Aston Hill has:

  1. entered into the Agreement with CC&L FG, Connor, Clark & Lunn Capital Markets Partnership, CC&L CM, and Messrs. Neil Murdoch and Darren Cabral (the principals of CC&L CM) pursuant to which Aston Hill will acquire an 80% interest in CC&L CM, which will be renamed Aston Hill Capital Markets Inc. on closing of the transaction. CC&L CM currently manages or provides advisory services to 14 TSX-listed closed-end funds and 7 reference funds (the "Funds") having assets under management of approximately $1.2 billion (as of June 30, 2013); and

  2. entered into an agreement with a syndicate of underwriters, led by CIBC, RBC Capital Markets and Scotiabank (the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 13,600,000 subscription receipts of Aston Hill (the "Subscription Receipts") at a price of $1.40 per Subscription Receipt for gross proceeds of $19 million (the "Bought Deal").

The Acquisition

Pursuant to the Agreement, Aston Hill will acquire 80% of the outstanding shares of CC&L CM for $16.4 million in cash. CC&L CM currently manages or provides advisory services to the following Funds:

Fund Name TSX Symbol
Canadian Banc Capital Securities Trust CSB.UN
Low Volatility Canadian Equities Income Fund LOW.UN
North American Financials Capital Securities Trust NAF.UN
U.S. Agency Mortgage-Backed REIT Advantaged Fund USM.UN
U.S. Housing Recovery Fund USH.UN
ING Diversified Floating Rate Senior Loan Fund IFL.UN
Build America Investment Grade Bond Fund BAB.UN
HBanc Capital Securities Trust HSC.UN
Australian Banc Capital Securities Trust AUZ.UN
Macquarie Emerging Markets Infrastructure Income Fund MQA.UN
Australian Banc Income Fund AUI.UN
ING Floating Rate Senior Loan Fund ISL.UN; ISL.U
Coxe Global Agribusiness Income Fund CAG.UN
Canadian 50 Advantaged Preferred Share Fund CPF.UN
Portfolio Trust N/A
North American Portfolio Trust N/A
BAB Trust N/A
CS Trust N/A
ACS Trust N/A
ISL Loan Trust N/A
ISL Loan Trust II N/A

The Acquisition, if completed, would increase Aston Hill's assets under management and advisory ("AUM") from approximately $6.7 billion to approximately $7.9 billion (based on June 30, 2013 AUMs).

Following closing, Messrs. Murdoch and Cabral, the current principals of the CC&L CM business, will hold the remaining 20% interest in Aston Hill Capital Markets Inc. and are expected to continue to conduct the closed end business. Aston Hill will have an option to acquire, and Messrs. Murdoch and Cabral will have an option to sell, the remaining 20% interest after three years (in the case of Mr. Cabral, one-half of his interest after three years, and all of his interest after five years).

Pursuant to the Agreement, CC&L CM will assign the management agreement of one conventional mutual fund to an affiliate of CC&L FG prior to the closing. As a result, the Acquisition relates exclusively to CC&L CM's closed-end fund business.

Mr. Murdoch, President and CEO of CC&L CM, stated "Darren and I are excited to be joining Aston Hill. Our business has grown significantly in recent years and we believe that it is necessary to access sales, marketing and client service personnel to continue to grow the business. We believe Aston Hill is a great fit for us and we look forward to working with the talented professionals at Aston Hill that are focused on the retail market."

Completion of the Acquisition, which is expected to occur on or about August 15, 2013 (the "Acquisition Closing Date"), is subject to certain regulatory approvals, the completion of the Bought Deal, and customary terms and conditions. If the conditions to the Agreement have not been fulfilled by September 30, 2013, either Aston Hill or CC&L FG may terminate the Agreement.

A copy of the Agreement is available at www.sedar.com.

The Bought Deal

The Subscription Receipts will be offered in each of the provinces of Canada, except for Québec. The offering is expected to close on August 7, 2013 (the "Bought Deal Closing Date"), and is subject to the satisfaction or waiver of various conditions, such as the receipt of normal regulatory approvals, including approval of the TSX. Aston Hill has also granted the Underwriters an over-allotment option to purchase an additional 2,040,000 Subscription Receipts (or if the Acquisition has been completed at the time of exercise, an equal number of common shares) exercisable at the offering price for a period of 30 days after the Bought Deal Closing Date. Aston Hill intends to use the net proceeds from the Bought Deal to fund the purchase price of the Acquisition, with any excess proceeds to be used for working capital and general corporate purposes.

The net proceeds from the sale of the Subscription Receipts will be held by an escrow agent until all conditions, undertakings and other matters to be satisfied prior to completion of the Acquisition in accordance with the Share Purchase Agreement have been met or waived, other than the payment of the consideration for the Acquisition for which the escrowed proceeds are required, in whole or in part.

Upon closing of the Acquisition, (i) one common share of Aston Hill will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protections), without payment of any additional consideration and (ii) an amount equal to the dividends that have been declared on each common share by Aston Hill for which record dates have occurred during the period from the Bought Deal Closing Date to but excluding the Acquisition Closing Date will become payable (less any applicable withholding taxes, if any) in respect of each Subscription Receipt.

If (i) the Acquisition fails to close on or before September 30, 2013, (ii) the Agreement is terminated prior to such time or (iii) Aston Hill advises the Underwriters or discloses to the public that it does not intend to proceed with the Acquisition, the holders of the Subscription Receipts will be entitled to receive an amount equal to the full subscription price thereof plus their pro rata share of any interest or other income earned or deemed to have been earned on the proceeds of the offering (less applicable withholding taxes, if any).

The Subscription Receipts have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons" ("U.S. Persons"), as such term is defined in Regulation S promulgated under the 1933 Act, absent registration or applicable exemption from the registration requirement of the 1933 Act and applicable state securities laws. This news release is not an offer of securities for sale to, or for the account or benefit of, persons in the United States or U.S. Persons.

About Aston Hill

Aston Hill, through its offices in Calgary, Toronto and Halifax, is a diversified asset management company with a suite of retail mutual funds, closed-end funds, private equity funds, hedge funds and segregated institutional accounts. Aston Hill also is engaged in oil and gas property management. Additional information regarding Aston Hill is available in Aston Hill's publicly available disclosure documents on www.sedar.com.

Forward-Looking Statements

The information and statements in this news release contains certain forward-looking information. This forward-looking information relates to future events or Aston Hill's future performance. In particular, this document contains forward-looking information and statements regarding: (i) the completion of the Bought Deal and the issuance of the Subscription Receipts, (ii) the completion of the Acquisition, (iii) the expected closing dates of the Bought Deal and the Acquisition; (iv) the use of proceeds of the Bought Deal; and (v) future capital expenditures and projects. All statements other than statements of historical fact may be forward-looking information. This forward-looking information is subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking information. The outcome and timing of the Bought Deal and the Acquisition, as well as the Company's actual results, performance or achievement, could differ materially from those expressed in, or implied by, such forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do, what benefits that the Company will derive from them. The Company's forward-looking information is expressly qualified in its entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking information.

Contact Information

  • Aston Hill Financial Inc.
    Eric Tremblay
    Chief Executive Officer
    (403) 770-4817

    Aston Hill Financial Inc.
    Larry Titley
    Vice President and CFO
    (403) 770-4808