TORONTO, March 4,
2024 /CNW/ - Bridgemarq Real Estate Services Inc.
(together with its subsidiaries, "Bridgemarq" or the
"Company") (TSX: BRE) today announced that it has filed and
is in the process of mailing the management information circular
(the "Circular") and related materials in connection with
the special meeting (the "Meeting") of its shareholders to
be held virtually on March 25,
2024.
The Meeting relates to the previously announced proposed
acquisition of the issued and outstanding shares of Bridgemarq Real
Estate Services Manager Limited and Proprio Direct Inc. (together
with their subsidiaries, the "Target Entities") from an
affiliate of Brookfield Business Partners ("Brookfield"), and the settlement of
certain deferred management fees and distribution payments owing by
the Company. As consideration, the Company will issue Class B
subordinated limited partnership units of Residential Income Fund
L.P. (the "Partnership"), (the "Exchangeable Units")
to Brookfield pursuant to a
definitive agreement dated as of December
14, 2023 (the "Purchase Agreement" and collectively,
the "Transaction").
The Transaction is expected to provide a number of meaningful
benefits to shareholders, including the following:
- Compelling Pro Forma Financial Metrics. The
Transaction is expected to meaningfully enhance the scale of
Bridgemarq and deleverage the business through the settlement of
certain deferred management fees and distributions owing to
Brookfield. Given the expected
liquidity of the pro forma entity, the Company anticipates
maintaining existing levels of cash dividends per share, subject to
the discretion of the Board.
- Expanded Acquisition and Growth Opportunities. With the
acquisition of the Target Entities, the Transaction is expected to
add to Bridgemarq's capability to capture future growth across a
broader spectrum of the real estate industry through both organic
growth and future acquisition opportunities. The addition of
highly-regarded best-in-class real estate brokerage operations is
expected to provide Bridgemarq with the scale to grow in its
current markets and to expand beyond those markets increasing value
for shareholders. Particularly, the Proprio Direct model provides
compelling opportunities to expand its platform to markets outside
of Québec.
- Expanded Revenue Opportunities. The broadening of the
Company's business to include brokerage operations is expected to
enable Bridgemarq to capture additional revenue and add increased
capability to service sales representatives in the markets the
Company serves.
- Simplified Organizational Structure. The
Transaction is expected to result in a more traditional and
simplified organizational model, allowing for increased efficiency
of operations and focused, dedicated management.
- Stronger Alignment of Interests. The simplified
organizational structure resulting from the Transaction is expected
to create a stronger alignment of interests among management, the
Board and shareholders, and more efficient decision-making. By
combining the Target Entities with the Royal LePage® and
Via Capitale® franchise networks, the Transaction is
also expected to empower the management team to respond to market
dynamics more efficiently through its enhanced service
offerings.
- Strengthened Franchise Network. With the expansion of
business lines to include direct brokerage operations, Bridgemarq
is expected to be in a better position to grow its industry-leading
national network of REALTORS® and brokers in
addition to diversifying its revenue streams.
- Proven Leadership Team. The business of Bridgemarq
following the completion of the Transaction will be led by
Spencer Enright as Chief Executive
Officer, the current Chief Executive Officer of the Manager, and
Mr. Enright will continue to serve as a director on the Board. The
Company's current Chief Financial Officer, Glen McMillan, will continue in his role with
the Company. The Company's current Chief Executive Officer,
Phil Soper, will continue his role
in managing all brokerage and franchise relationships as the
President of the Company. Messrs. Enright, McMillan and Soper are
talented and experienced executives whose dedicated efforts and
focus will continue to benefit the future operations and business
plans of Bridgemarq following the completion of the
Transaction.
- Benefits from Increased Size and Scale. Upon completion
of the Transaction, the Company will have broader revenue sources,
which may be of interest to a broader investor base and potentially
attract analyst coverage providing more exposure for the Company's
restricted voting shares (the "Restricted Voting
Shares").
Further details regarding the expected benefits of the
Transaction as well as details regarding the potential risks of the
Transaction are included in the Circular available on SEDAR+
(www.sedarplus.ca) under the Company's issuer profile and on the
company website at www.bridgemarq.com.
As a result of the Transaction, Brookfield's ownership interest in the Company
is expected to increase from approximately 28.4% to approximately
41.7% on a fully-diluted basis, subject to applicable purchase
price adjustments. Under applicable Toronto Stock Exchange
("TSX") rules, the Transaction will be subject to approval
by Bridgemarq's shareholders, as the number of Exchangeable Units
to be issued to Brookfield, an
insider of the Company, exceeds 10.0% of the total number of
outstanding Restricted Voting Shares. In accordance with the TSX
rules, Brookfield and its
associates and affiliates will be excluded for the purposes of such
shareholder approval. Senior officers and directors of the Company
(representing approximately 0.8% of the Restricted Voting
Shares) have entered into voting and support agreements
pursuant to which they have agreed to, among other things, vote
their Restricted Voting Shares in favour of the Transaction.
The board of directors of the Company (the "Board"),
acting on the unanimous recommendation of the special committee of
the Board comprised solely of independent directors (the
"Special Committee"), has unanimously approved the
Transaction and recommends that holders of Restricted Voting Shares
vote in favour of the Transaction Resolution. In making its
recommendation, the Board considered a number of factors, including
among others, the Special Committee's receipt of a fairness opinion
from Blair Franklin Capital Partners Inc. ("Blair Franklin"), which concluded that in
Blair Franklin's opinion, and based
upon and subject to the assumptions, limitations, and
qualifications set forth therein, the issuance of the Exchangeable
Units to Brookfield pursuant to
the Transaction is fair, from a financial point of view, to the
Company.
MEETING AND CIRCULAR
At the Meeting, holders of the Restricted Voting Shares will be
asked to consider, and if deemed advisable, to pass an ordinary
resolution (the "Transaction Resolution") approving the
issuance by the Partnership of up to 3,000,000 Exchangeable
Units, in accordance with the terms of the Purchase Agreement, and
the issuance by Bridgemarq of the equivalent number of Restricted
Voting Shares that may be issued by the Company upon the exchange
of such Exchangeable Units.
The Meeting is scheduled to be held as a virtual meeting
accessible at https://virtual-meetings.tsxtrust.com/1601 on
March 25, 2024, at 11:00 a.m. (EDT), using the password "bresi2024",
which is case sensitive. Shareholders of record as at the close of
business on February 14, 2024, are
entitled to receive notice of and vote at the Meeting.
Holders of Restricted Voting Shares are encouraged to vote on
the Transaction Resolution as soon as possible by proxy or voting
instruction form. Proxies must be submitted no later than
11:00 a.m. (EDT) on March 21, 2024, or 48 hours (excluding Saturdays,
Sundays and holidays) prior to the commencement of any adjourned or
postponed Meeting. Shareholders may also vote online during the
Meeting as more particularly described in the Circular.
If shareholders have any questions or require more information
with respect to voting their Restricted Voting Shares, they can
contact Bridgemarq's proxy advisor, Carson Proxy Advisors, at
1-800-530-5189 (collect 416-751-2066) or info@carsonproxy.com to
discuss.
The Circular provides important information on the Transaction
and related matters, including the background to the Transaction,
the rationale for the recommendations made by the Special Committee
and the Board, information concerning the Target Entities and the
Company following completion of the Transaction, and procedures
relating to voting and virtually attending the Meeting.
Shareholders are urged to read the Circular and its appendices
carefully and in their entirety, and, if assistance is required, to
consult with their financial, legal, tax or other professional
advisors. The Circular and the Purchase Agreement are available on
SEDAR+ (www.sedarplus.ca) under the Company's issuer profile.
In addition to shareholder approval, the completion of the
Transaction is subject to, among other things, applicable
regulatory approvals, including TSX approval, and the satisfaction
or waiver of certain other closing conditions customary in
transactions of this nature. Subject to the satisfaction of such
conditions, the Transaction is expected to close by the end of
March, 2024.
ABOUT BRIDGEMARQ REAL ESTATE
SERVICES
Bridgemarq is a leading provider of services to residential real
estate brokers and a network of approximately 21,000
REALTORS®. We operate in Canada under the Royal LePage, Via Capitale
and Johnston & Daniel brands. For more information, go to
bridgemarq.com.
FORWARD-LOOKING
STATEMENTS
This news release contains forward-looking information and other
"forward-looking statements", including, without limitation,
statements with respect to the Transaction, including the
anticipated benefits of the Transaction; the economic and strategic
impact of the Transaction; the expected timeline for mailing the
Circular and holding the Shareholder Meeting; the satisfaction of
the conditions to closing the Transaction and the timing thereof;
and the intended changes to the Company's Board and management
team. Words such as "continues", "appear", "until", "may",
"expect", "could", "will", "intend" and other expressions that are
predictions of or could indicate future events and trends and that
do not relate to historical matters identify forward-looking
statements.
Reliance should not be placed on forward-looking statements
because they involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or
achievements of the Company to differ materially from anticipated
future results, performance or achievement expressed or implied by
such forward-looking statements. Factors that could cause actual
results to differ materially from those indicated in the
forward-looking statements include: any resurgence of COVID-19
(including any impact of COVID-19 on the economy and the Company's
business), changes in the supply or demand of houses for sale in
Canada or in any particular region
within Canada, changes in the
selling price for houses in Canada
or any particular region within Canada, changes in the Company's cash flow,
changes in the Company's strategy with respect to and/or ability to
pay dividends, changes in the productivity of the Company's
REALTORS® or the commissions they charge their
customers, changes in government policy, laws or regulations which
could reasonably affect the housing markets in Canada or the economy in general, changes to
any products or services developed or offered by the Company,
consumer response to any changes in the housing markets in
Canada or any changes in
government policy, laws or regulations, changes in general economic
conditions (including interest rates, consumer confidence and other
general economic factors or indicators), changes in global and
regional economic growth, changes in the demand for and prices of
natural resources on local and international markets, the level of
residential real estate transactions, competition from other real
estate brokers or from discount and/or Internet-based real estate
alternatives, the closing of existing real estate brokerage
offices, other developments in the residential real estate
brokerage industry or the Company that reduce the number of
REALTORS® in the Company's network or revenue from the
Company's network, the Company's ability to maintain brand equity
through the use of trademarks, the methods used by shareholders or
analysts to evaluate the value of the Company and its publicly
traded securities, changes in tax laws or regulations and other
risks detailed in the Company's annual information form, which is
filed with securities commissions and posted on SEDAR+ at
www.sedarplus.ca. There are also risks that are inherent in the
nature of the Transaction, including the diversion of management
time caused by the Transaction, the failure to satisfy the
conditions to the completion of the Transaction, the failure to
obtain any required approvals (or to do so in a timely manner) and
the failure to realize the anticipated benefits of the Transaction.
Forward-looking information is based on various material factors or
assumptions, which are based on information currently available to
management. Material factors or assumptions that were applied in
drawing conclusions or making estimates set out in the
forward-looking statements include, but are not limited to:
anticipated economic conditions, anticipated impact of government
policies, anticipated financial performance, anticipated market
conditions, anticipated benefits from the Transaction, business
prospects, the successful execution of the Company's business
strategies and recent regulatory developments, including as the
foregoing relate to COVID-19. The factors underlying current
expectations are dynamic and subject to change. Certain information
in this press release may be considered as "financial outlook"
within the meaning of applicable securities legislation. The
purpose of this financial outlook is to provide readers with
disclosure regarding the Company's reasonable expectations with
respect to the Transaction. Readers are cautioned that the
financial outlook may not be appropriate for other purposes.
Although the forward-looking statements contained in this press
release are based upon what management believes are reasonable
assumptions, the Company cannot assure readers that actual results
will be consistent with these forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
BRIDGEMARQ & DESIGN / BRIDGEMARQ REAL ESTATE
SERVICES are registered trademarks of Residential Income Fund L.P.
and are used under licence by Bridgemarq Real Estate Services Inc.
and Bridgemarq Real Estate Services Manager
Limited.
The trademarks REALTOR®, REALTORS®
and the REALTOR® logo are controlled by The Canadian Real Estate
Association (CREA) and identify real estate professionals who are
members of CREA.
SOURCE Bridgemarq Real Estate Services Inc.