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July 5, 2014
10:51 EDTMSLIMerus signs definitive acquisition agreement with Dacha Strategic Metals
Merus Labs International announced that it has entered into a definitive acquisition agreement with Dacha Strategic Metals pursuant to which Dacha will complete the balance of the previously announced investment of at least $11M in Merus. As contemplated by the letter agreement between Dacha and Merus which was announced on June 10, the acquisition agreement provides that Merus will acquire from Dacha, in exchange for common shares of Merus, a new subsidiary to be incorporated by Dacha and to which Dacha will contribute a minimum of $6M cash by way of equity subscriptions. The number of Merus Shares that Dacha will receive in exchange for Newco will equal Newco's cash on hand at closing divided by $1.70. Upon closing of the transaction, Merus will pay to Dacha a transaction fee, payable in the common shares of Merus based on a price of $1.70 per share, equal to 3.5% of the aggregate value of the Merus Shares exchanged for Newco. Dacha purchased $5M of Merus Shares at a price of $1.70 per share as part of the Merus bought deal financing completed on June 19. Therefore, upon completion of the transactions contemplated by the acquisition agreement, it is expected that Dacha will have acquired a total of at least $11M of Merus Shares at a price of $1.70 per share. Completion of the transaction is conditional upon the conditions to closing set forth in the acquisition agreement, which include receipt of all necessary stock exchange approvals, receipt of Dacha shareholder approval and no material adverse change with respect to Merus or Dacha. If the transaction has not been completed by August 31, either party may terminate the acquisition agreement. Dacha will be seeking shareholder approval for the sale of Newco to Merus at Dacha's annual and special meeting of shareholders on August 11. Certain Dacha shareholders have signed voting support agreements with Merus pursuant to which they have agreed that they will vote their Dacha common shares in favor of the sale of Newco at the meeting.
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