TORONTO, March 11, 2021 /CNW/ - EFH Holdings Inc. (the "Company" or "EFH") (TSXV: EFH) is pleased to announce that it has entered into a letter of intent with Cooke Holdings Inc. ("Cooke") to acquire the remaining 25% ownership of The Insurance Company of Prince Edward Island ("ICPEI") that the Company currently does not own (the "Acquisition").  

Terms of the Acquisition

Under the terms of the Acquisition, the Company will acquire from Cooke all of the remaining issued and outstanding shares of ICPEI not already owned by EFH (the "ICPEI Shares") for a total cash consideration of approximately $6,315,000 (the "Purchase Price").The Acquisition is an arm's length transaction and is expected to close on or before April 1st, 2021.

Completion of the Acquisition is subject to a number of conditions precedent, including but not limited to, the completion to the satisfaction of EFH of due diligence, the negotiation and execution of definitive documentation, and the approval of the TSX Venture Exchange. Accordingly, there can be no assurance that the Acquisition will be completed on the terms proposed above or at all.

Concurrent Private Placement

As a condition to completing the Acquisition, the Company intends to complete a non-brokered private placement financing of up to $3,739,002 (the "Private Placement"). The Private Placement will consist of the sale of up to 2,633,100 common shares of the Company ("Shares") at a price of $1.42 per Share.

The proceeds of the Private Placement will be held in escrow, pending the Company receiving all applicable regulatory approvals and will be used to pay the Purchase Price on the closing of the Acquisition. If the Acquisition is not completed, the proceeds of the Private Placement will be returned to the subscribers.

The Shares issued pursuant to the Private Placement will be subject to a hold period of four (4) months and one day from the date of closing of the Private Placement. In addition, the Private Placement is subject to the approval of the TSX Venture Exchange.

The Private Placement will constitute a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), given that certain insiders of the Company have indicated their intention to subscribe for Shares under the Private Placement. On closing of the Private Placement, it is expected that certain insiders will subscribe for an aggregate of $897,098 of Shares. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, given that the fair market value of the participation in the Private Placement by certain insiders does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Private Placement has been approved by the independent directors of the Company. The Company expects that it will not file a material change report in respect of the Private Placement more than 21 days before the expected closing date of the Private Placement as the Company wishes to close the Private Placement on an expedited basis for sound business reasons and in a timeframe consistent with usual market practice for transactions of this nature.

About The Insurance Company of Prince Edward

Founded in 1987, The Insurance Company of Prince Edward Island offers market-leading home, auto and commercial insurance solutions. Its products are sold exclusively through a network of brokers across all three Maritime Provinces and Quebec. ICPEI has established a longstanding record of underwriting profitability, rooted in its disciplined approach to risk selection. On July 1, 2014, EFH acquired 75% ownership of ICPEI.

About EFH Holdings Inc.

Founded in 1998, EFH Holdings Inc. operates in the property and casualty insurance industry in Canada, providing personal and commercial lines insurance exclusively through the broker channel. The Company distributes insurance products through The Insurance Company of Prince Edward Island. It trades on the TSX Venture Exchange under the symbol EFH.

Forward-looking Information

This news release contains forward-looking information based on current expectations. This information includes, but is not limited to, statements about the targets, ongoing objectives, strategies, timelines for completing the Acquisition and the Private Placement, Purchase Price, amounts to be raised pursuant to the Private Placement and outlook of EFH. These statements, which appear in this press release generally can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "would", "should", "could", "trend", "predict", "likely", "potential" or "continue" or the negative thereof and similar variations.

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a projection as reflected in the forward-looking information. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific. A variety of material factors, many of which are beyond EFH's control, affect the operations, performance and results of its business and could cause actual results to differ materially from the expectations expressed in any of this forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE EFH Holdings Inc.

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