H2 to Acquire Magnus in Strategic Share Exchange Agreement
H2 has announced a definitive agreement to acquire all issued and outstanding common shares of Magnus, marking a significant step in its strategic growth. In exchange for the Magnus shares, H2 will issue an aggregate of 48,871,956 shares of the resulting issuer, thereby solidifying Magnus as a wholly owned subsidiary upon completion of the transaction. The resulting issuer is poised to operate under a Tier 2 technology designation on the TSX Venture Exchange (TSXV), a classification that reflects its growth potential within the sector.
Post-transaction, the vendor will hold approximately 84.41% of the outstanding shares after consolidation and name change, while existing H2 shareholders will retain about 10.57% of the resulting issuer shares. This transaction values the shares exchanged at CAD 2.00 each, with specific shares subject to escrow and a statutory hold period, ensuring compliance with TSXV policies.
Notably, the structure of the transaction does not classify it as a non-arm's length qualifying transaction, thus eliminating the need for shareholder approval from H2, which streamlines the process. Proposed leadership for the resulting issuer includes Richard Halka as Chief Financial Officer and Manish Mistry as Chief Executive Officer, who brings substantial experience from his previous roles at DuPont and ABB.
In a parallel move, H2 is preparing to file a prospectus detailing the transaction with the TSXV. As part of the arrangements, a finder’s fee amounting to approximately CAD 2,906,896 will be issued, contingent upon exchange acceptance. H2 is also seeking a waiver from the sponsorship requirements typically mandated for capital pool companies, though the outcome remains uncertain.
Currently, trading of H2 shares has been halted, with a resumption contingent on TSXV's assessment following the transaction’s completion. Legal counsel for H2 is provided by Prest Law Corporation, while Dentons Canada LLP represents Magnus and the vendor. The TSXV has not evaluated the merits of this transaction and has neither endorsed nor disapproved the details shared in this announcement.
