Terra Nova Royalty Corp. reported that the company has signed an agreement to purchase all the outstanding shares of Mass Financial Corp, a trading and financial firm specializing in commodities and natural resources.
Terra Nova Royalty Corporation will issue one share of the company in exchange for each share of Mass Financial Corp. The deal is valued at $225 million, and incorporates an adjusted book value for Terra Nova Royalty Corporation of $8.91 per share and $9.00 per share for Mass Financial Corp.
Since Terra Nova Royalty Corporation will be increasing the company’s share count by more than 20%, the acquisition must be approved by the shareholders of Terra Nova Royalty Corporation. The management indicated that this approval is expected.
Terra Nova Royalty Corporation said that after the two companies complete the deal, the company would distribute to shareholders all the shares of KHD Humboldt Wedag International AG that the company owns.
Raymond James Ltd. was the adviser for Terra Nova Royalty Corporation in the deal and issued a fairness opinion on the value of the prospective target.
Terra Nova Royalty Corporation said that the deal contains a termination fee provision calling for a payment of $6 million by Terra Nova Royalty Corporation if the company was unable to complete the deal. This provision also calls for a similar payment by Mass Financial Corp. to Terra Nova Royalty Corporation if the company accepted a superior offer from a third party.
For more information on the company, go to www.terranovaroyalty.com
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