VersaBank and PWC Capital Inc. Provide Update on Merger Transaction, Announce Record Date and Meeting Date

Dateline City:
LONDON, Ontario

LONDON, Ontario–(BUSINESS WIRE)–VersaBank (TSX: VB, VB.PR.A, VB.PR.B) (“VersaBank”) and PWC Capital Inc. (TSX: PWC, PWC.PR.A, PWC.PR.B, PWC.NT.C) (“PWC”) today jointly provided an update on their previously announced merger.

VersaBank and PWC have set November 23, 2016 as the record date and December 30, 2016 as the meeting date for their respective meetings of securityholders (the “Meetings”) to approve their previously announced amalgamation and related transactions (the “Merger”).

In connection with the Merger, PWC also announced today that it has amended the exchange ratios pursuant to which its outstanding PWC Common Shares and PWC Series C Notes will be exchanged, directly or indirectly, for VersaBank Common Shares. Amendments were made to reflect, among other things, a review of the financial model and feedback in respect of the Merger from holders of PWC securities. In this connection, pursuant to the Merger, directly or indirectly

  • every 54.508758 PWC Common Shares will now be entitled to one (1) VersaBank Common Share;
  • each PWC Class B Preferred Share will still be entitled to approximately 2.793 VersaBank Common Shares; and
  • each $1,000 principal amount of PWC Series C Notes will now be entitled to approximately 137.009 VersaBank Common Shares.

Prior to their conversion into VersaBank Common Shares, it is anticipated that the PWC Class B Preferred Shares and the PWC Series C Notes will be exchanged into PWC Common Shares. Such exchange will be effected, in the case of the PWC Class B Preferred Shares, pursuant to amendments to the articles of PWC and, in the case of the PWC Series C Notes, pursuant to amendments to the indenture governing same, in lieu of a statutory plan of arrangement as previously contemplated.

Such amendments have no effect on the aggregate pro forma capitalization of VersaBank previously announced; that is, no change is contemplated to the aggregate number of VersaBank Common Shares to be issued to holders of PWC securities as a result of the revised PWC exchange ratios set out above. The number of VersaBank Common Shares that will indirectly be issued to 340268 Ontario Limited (“340268”) in satisfaction of certain indebtedness owed by PWC to 340268 will also remain unchanged. As previously announced, pursuant to the Merger,

  • all of the outstanding VersaBank securities will be converted into equivalent securities of the merged VersaBank on a one-for-one basis (other than the VersaBank common shares owned by PWC, which will be cancelled); and
  • existing VersaBank Common Shareholders will continue to own approximately 35% of the merged VersaBank Common Shares, and the former securityholders and debtholders of PWC will own the remaining approximately 65% of the merged VersaBank Common Shares.

The board of directors of each of VersaBank and PWC, on the unanimous recommendation of their respective independent committees, and having the benefit of the advice of their independent financial and legal advisors, have unanimously resolved to affirm their previous recommendation and unanimously recommend that their securityholders vote in favour of the Merger. Each of the directors and executive officers of VersaBank and PWC has expressed his or her intention to vote in favour of the various resolutions to be considered with the Merger, as applicable.

It is anticipated that proxy circulars will be mailed shortly by each of VersaBank and PWC in connection with the Meetings. These circulars will contain further information in relation to the proposed Merger, including the full text of the fairness opinion received from RBC Capital Markets (in the case of the VersaBank circular) and the fairness opinions and formal valuations to be received from Crosbie & Company Inc. (in the case of the PWC circular) in connection with the Merger. Such opinions and valuations were given as at the dates rendered and are subject to the respective assumptions and qualifications contained therein. These circulars, together with the agreements entered into in connection with or ancillary to the Merger, have been or will be filed with the Canadian securities regulatory authorities and will be available under VersaBank’s and PWC’s respective profiles at

In addition to the approvals to be sought at the Meetings, the Merger is subject to certain regulatory approvals in Canada, including from the Minister of Finance. The Merger also is subject to other closing conditions, including satisfaction of the customary conditions of the TSX. The Superintendent of the Office of the Superintendent of Financial Institutions has approved the amalgamation agreement as required pursuant to Section 225 of the Bank Act (Canada). VersaBank has also received the decision of the Ontario Securities Commission exempting VersaBank from the valuation and minority approval requirements of National Instrument 61-101 in connection with the Merger, which decision document will be available on VersaBank’s website at

About VersaBank

VersaBank, a technology based and digital Canadian Schedule I chartered bank, operates using an “electronic branchless model”. It sources deposits, consumer loans, commercial loans and leases electronically. The Bank also makes residential development and commercial mortgages it sources through a well-established network of brokers and direct contact with its lending staff. VersaBank Common Shares trade on the Toronto Stock Exchange under the symbol VB and its Series 1 Preferred Shares and Series 3 Preferred Shares trade under the symbols, VB.PR.A, VB.PR.B, respectively.

About PWC Capital Inc.

PWC Capital Inc. is a holding company whose PWC Common Shares, PWC Class A Preferred Shares, PWC Class B Preferred Shares and PWC Series C Notes trade on the Toronto Stock Exchange under the symbols PWC, PWC.PR.A, PWC.PR.B, PWC.NT.C, respectively. PWC currently owns approximately 63% of VersaBank’s outstanding Common Shares.

Forward-looking information

This news release may contain forward-looking information within the meaning of applicable securities laws that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for the combined entity following the Merger and expectations regarding whether the Merger will be consummated, including whether conditions to the consummation of the Merger will be satisfied, or the timing for completing the Merger. The words “may”, “would”, “could”, “should”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “aim”, “endeavour”, “project”, “continue”, “predict”, “potential”, or the negative of these terms or other similar expressions have been used to identify these forward-looking statements.

Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond management’s control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. Management has attempted to identify important factors that could cause actual results, performance or achievements to vary from current expectations or estimates, expressed or implied, by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

The following factors could cause actual results to differ materially from those discussed in the forward-looking information: failure to satisfy the conditions to completion of the Merger; and the occurrence of any event, change or other circumstance that could give rise to the further amendment to, variation of or termination of the definitive agreements concerning the Merger. Additional risks and uncertainties regarding VersaBank and PWC are described in their respective most recent Annual Information Forms which are available on SEDAR at

This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing management’s views as of any date subsequent to the date of this document. While we anticipate that subsequent events and developments may cause our views to change, we do not intend to update this forward-looking information, except as required by applicable securities laws.


David Taylor, 519-675-4206
President & CEO
[email protected]