TORONTO, ONTARIO--(Marketwired - Jan. 6, 2017) - Integrated Asset Management Corp. ("IAM") (TSX:IAM) announced today that it has entered into an agreement to sell all of the common shares of Integrated Managed Futures Corp. ("IMFC") directly or indirectly held by IAM, an outstanding loan owed to IAM by IMFC and units of the AlphaCentric/IMFC Managed Futures Strategy Fund ("AlphaCentric Fund") to Koloshuk Farrugia Corp. ("the Purchaser"). The Purchaser is a holding company wholly-owned by Victor Koloshuk, the Executive Chairman, a director and a significant shareholder of IAM.
As part of its ongoing consideration of IAM's core business segments, IAM's board of directors established a committee comprised of two independent directors (the "Independent Committee") to consider potential strategic alternatives for IMFC. Following the committee's review of alternatives, consideration of various stakeholders and discussions with a number of potential buyers over the past 12 months by the Independent Committee, IAM pursued the sale to the Purchaser in order to better focus IAM on its core Private Debt and Real Estate business segments.
Under a purchase agreement dated January 4, 2017 (the "Purchase Agreement") among IAM, BluMont Capital Inc. (a wholly-owned subsidiary of IAM) and the Purchaser, IAM agreed to sell (i) all of the common shares of IMFC directly or indirectly held by IAM (representing approximately 77.5% of IMFC's common shares) and an outstanding loan owed to IAM by IMFC and (ii) The AlphaCentric Fund units held by IAM based on the closing unit price at close on January 6th, 2017, payable in cash.
The sale of the AlphaCentric Fund units is scheduled to close following calculation of the net asset value for such units after the close of business today. The sale of the IMFC common shares and outstanding loan to IMFC are expected to close in IAM's second fiscal quarter of 2017 and are subject to certain closing conditions, including the receipt of Ontario Securities Commission approval.
These transactions constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") as Victor Koloshuk is the Executive Chairman and a member of IAM's board of directors, and beneficially owns (including through the Purchaser) approximately 35.5% of the outstanding common shares of IAM. Since these transactions constitute a related party transaction, the transactions were examined, reviewed and considered by the Independent Committee and the Independent Committee had an active role in overseeing the related discussions and negotiations with KFC. Based upon a number of factors, including the recommendations of and discussions with disinterested members of IAM's management, review and consideration of other strategic alternatives, negotiations and feedback from discussions and negotiations with other potential buyers of IMFC, the absence of any offers from any third parties following a market canvas conducted by the Independent Committee with the assistance of members of IAM's management, the related party nature of the transactions, consideration of the interests of effective stakeholders, the impact of the sale on IAM, negotiations with management of the Purchaser, and its review and consideration of the Purchase Agreement and related agreements, the Independent Committee determined that the transactions are on commercially reasonable terms and in the best interests of the IAM. The disinterested members of IAM's board of directors, on the recommendation of the Independent Committee, unanimously approved the transactions.
The Independent Committee and the disinterested directors of IAM's board of directors determined that IAM is exempt from the requirements under MI 61-101 to obtain a formal valuation and minority shareholder approval for the transactions because neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transactions, exceeds 25% of IAM's market capitalization.
Integrated Asset Management Corp. is one of Canada's leading alternative asset management companies with approximately $2.6 billion in assets and committed capital under management in real estate, private debt and managed futures as of December 31, 2016.
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of IAM. The words" plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to the closing of the sale of IAM's equity interest in IMFC and the outstanding loan owed by IAM by IMFC and the sale of the AlphaCentric Fund units and the expected closing dates thereof. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of IAM as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. IAM's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, all conditions to closing the transactions, including obtaining all required regulatory approvals, being satisfied or waived, IAM's future growth potential, results of operations, future prospects and opportunities, no change in legislative or regulatory matters, future levels of indebtedness, the continual availability of capital and the current economic conditions remaining unchanged.
When relying on forward-looking statements to make decisions, IAM cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in IAM's annual information form for the year ended September 30, 2016, which is available under IAM's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, IAM assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.