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FCF Capital Inc. (TSXV: FCF) agreed to acquire a 60% majority interest in Canada’s largest mortgage brokerage firm, Vancouver-based Dominion Lending Centres (DLC), for approximately CAD$74 million. The purchase price consists of CAD$61,487,788 in cash, and 71,428,572 newly issued class A common shares of FCF at an ascribed price of CAD$0.175 per share. On Friday, May 13, FCF shares closed up over 15% at CAD$0.265 after an early morning voluntary trading halt due to the pending news was resumed by 2:30pm, giving the company a market value of CAD$43.35 million. DLC’s current owners, Gary Mauris, Christopher Kayat and certain other minority shareholders, will retain a 40% interest in DLC, and will continue to manage the day-to-day business and operations of DLC. “This is a tremendous opportunity for Dominion Lending Centres to continue to provide exceptional mortgage services for Canadians and expand our reach into other growth areas,” says Gary Mauris, President and CEO of Dominion Lending Centres. “We will continue to operate under the DLC group of companies with the same values, principles and operating approach that has made DLC Canada’s number one mortgage company.” The move comes after DLC closed the acquisition of Mississauga-based Mortgage Architects, with 1,287 mortgage brokers and agents, from Pacific Mortgage Group, on December 31, 2015. The combination turned DLC into the No. 1 mortgage originator in Canada. In 2013, DLC had acquired Mortgage Centre Canada from the Canadian Imperial Bank of Commerce. “We work with all the major banks, trust companies and credit unions across Canada,” Mauris said. “We originate loans underwritten by those lenders. They hold the loans on their balance sheets.” “FCF is delighted that the acquisition of a majority interest in DLC could form FCF’s first investment under its new investment thesis,” said Stephen Reid, CEO of FCF. The cash portion of the purchase price will be funded by FCF’s cash on hand, the net proceeds from FCF’s recently completed offering of subscription receipts, and a CAD$20 million demand loan facility provided by Bridging Finance Inc. FCF has paid to DLC a CAD$2.1 million deposit, which will be credited to the cash portion of the purchase price at closing. In the event of a breach of contract by FCF, or if the deal fails to close by July 29, 2016, FCF will forfeit its deposit. After the closing, DLC will be overseen by a combined board of directors, consisting of Gary Mauris, Christopher Kayat and three nominees of FCF, initially Stephen Reid, Ron Gratton and James Bell. Completion of the transaction is subject to a number of conditions, including the approval of the TSX Venture Exchange. The deal is expected to close before June 30, 2016, subject to an outside date of July 29, 2016. DLC group of companies is Canada’s leading and largest mortgage brokerage with $33 billion in funded mortgages in 2015. DLC group of companies operates through three main subsidiaries, Dominion Lending Centres, Mortgage Centre Canada and Mortgage Architects and has operations in all 13 provinces and territories. DLC group of companies’ extensive network includes over 5,000 agents, 325 franchises and 650 locations. Headquartered in British Columbia, DLC group of companies was founded in 2006 by Gary Mauris and Chris Kayat. Gary Mauris is the co-founder and President & CEO of Dominion Lending Centres; CEO of Mortgage Centre Canada; and chairman of Mortgage Architects. Together, these companies account for almost 35% of all consumer mortgages in Canada. He is a serial entrepreneur, having sold two prior companies to the public market. He has been recognized as a finalist for the Ernst & Young Entrepreneur of the Year in 2011 and earned the 2016 Tri-Cities Chamber of Commerce Business Leader of the Year, and is frequently interviewed by Canadian media. His companies have also won multiple industry awards. Chris Kayat is the co-founder and Executive VP of Dominion Lending Centres and is also an owner and Director of Mortgage Centre Canada (MCC) and Mortgage Architects. Prior to DLC and MCC, he was the largest Royal LePage owner in Western Canada by market share and overall agent count. FCF Capital Inc. is a Calgary, Canada-based private equity firm which employs a passive and long-term investment approach by pursuing majority interest acquisitions of cash flow positive middle-market privately held entities. The company focuses on investments in equity, debt, or other securities of publicly traded companies or private businesses, and offers financing services in exchange for pre-determined royalties or distributions. It also seeks to acquire all or part of one or more businesses, portfolios, or other assets. FCF Capital is listed on the TSX Venture Exchange as a Tier 1 investment issuer. FCF was founded in 1998 and is headquartered in Calgary, Alberta, Canada. The company was formerly known as Brilliant Resources Inc. and changed its name to FCF Capital Inc. in June 2015. FCF was previously a junior resource company in the business of acquiring mineral rights. It had operations in the Republic of Equatorial Guinea and related to the Michikamau property in Newfoundland and Labrador.]]>