|Date Announced:||May 13, 2016|
|Date Closed:||June 03, 2016|
|Client Name:||Founders Advantage Capital Corp.|
Founders Advantage Capital, in connection with its $74 million acquisition of a 60% Interest in the Dominion Lending Centre group of companies.
The Transaction was completed with an innovative structure to provide the investor with 60% of the first $14.6 million of annual distributions (the "Annual Threshold") paid by DLC to its securityholders, with the founder vendors receiving 40% of such Annual Threshold. To the extent that any distributions are paid in a year in excess of the Annual Threshold, founder vendors who remain active in the business will receive 70% of such excess distributions, with the investor receiving the remaining 30% of such excess distributions. In addition, with respect to any liquidity event, the net proceeds of disposition will be allocated amongst the investor and the founder vendors based upon their proportionate shares of distributions received as at the date of the liquidity event. As a result, the Transaction provides strong incentives for management to pursue continued free cash flow and earnings growth.