Magnolia Capital Partners, LLC

November 28, 2012 17:54 ET

Magnolia Capital Partners Announces Completion of Acquisition of Shares of Atlas Financial Holdings Inc.

TULSA, OKLAHOMA--(Marketwire - Nov. 28, 2012) - Magnolia Capital Partners, LLC ("Magnolia") announces the completion of its purchase (the "Share Purchase") of 1,621,621 restricted voting common shares ("Restricted Shares") in the capital of Atlas Financial Holdings Inc. (TSX VENTURE:AFH) ("Atlas") at a price of Cdn$1.85 per Restricted Share from Kingsway America Inc. ("Kingsway") pursuant to a previously announced share purchase agreement dated as of September 28, 2012 made between Magnolia and Kingsway (the "Share Purchase Agreement"). Immediately following the Share Purchase, each such Restricted Share was converted (the "Share Conversion", together with the Share Purchase, the "Transaction") into one ordinary voting share ("Ordinary Share") in the capital of Atlas.

Nadel and Gussman Combined Funds, LLC is the sole member of Magnolia and a joint actor of Magnolia in the circumstances. Mr. James F. Adelson ("Adelson") and Mr. Stephen J. Heyman ("Heyman") serve as the managers to Magnolia, in that capacity exercise control and direction over the Ordinary Shares and are also joint actors of Magnolia in the circumstances.

As a result of the Transaction, Magnolia acquired beneficial ownership of and Messrs. Adelson and Heyman exercise control and direction over an aggregate of 1,621,621 Ordinary Shares, which, together with 100 Ordinary Shares already held by Magnolia (1,621,721 Ordinary Shares, in the aggregate), represent approximately 23.95% of the 6,770,746 Ordinary Shares outstanding (calculated based on there being 5,149,125 Ordinary Shares issued and outstanding as at October 31, 2012 as per Atlas' definitive proxy statement (Schedule 14A) and the issuance of 1,621,621 Ordinary Shares upon completion of the Share Conversion).

Under the Share Purchase Agreement, Kingsway has agreed to provide purchase price anti-dilution protection to Magnolia if, on or before, January 1, 2014, Kingsway sells any Restricted Shares at a price less than Cdn$1.85 per Restricted Share. In such event, Kingsway shall assign to Magnolia that number of Restricted Shares, for no additional consideration, necessary so that, after the assignment of such additional Restricted Shares, Magnolia's average cost per share shall equal the lowest price at which Kingsway shall have sold such Restricted Shares. In addition, pursuant to an assignment agreement made as of November 28, 2012 between Kingsway and Magnolia, the entering into of which was a condition of closing to the Share Purchase, and with the prior consent of Atlas, Kingsway assigned to Magnolia its rights and obligations with respect to the 1,621,621 Restricted Shares under a registration rights agreement made between Atlas and Kingsway as of December 31, 2010, as amended and restated November 28, 2012, pursuant to which Kingsway has certain demand registration rights with respect to its Restricted Shares under the United States Securities Act of 1933.

The Ordinary Shares were acquired by Magnolia for investment purposes. Magnolia's holdings will be reviewed from time to time by Messrs. Adelson and Heyman and may be increased or decreased as future circumstances may dictate.

The Transaction was undertaken by Magnolia in reliance upon the private agreement take-over bid exemption in section 100.1 of the Securities Act (Ontario).

Contact Information

  • Magnolia Capital Partners, LLC
    Adam Peterson
    Portfolio Manager
    U.S.A. (918) 583-3333