TIMIA Capital buying controlling stake in specialty finance company

Vancouver, British Columbia-based TIMIA Capital Corp. agreed to acquire a 77% stake in a Canada-based specialty finance company for about C$9.24 million.

Due to competitive issues related to the acquisition, the target entity's name will only be disclosed after the deal's close, which is expected by June 30, according to a press release. The proposed acquisition is subject to a nonbinding letter of intent dated March 24.

The acquisition will complete by way of a C$7.7 million cash payment to the vendors of the target company upon closing, plus a C$1.54 million unsecured promissory note with a 5% annual interest to be paid in 12 months. The transaction is also subject to a break fee of C$200,000 payable by TIMIA if the deal does not close before June 30.

The target company had approximately C$123.4 million in long-term debt at year-end 2021.

TIMIA expects to finance the purchase through the issuance of debt and is not considering common or preferred stock issuance as part of the purchase price.

TIMIA, which provides growth capital loans to growing business-to-business technology companies, recently entered into a nonbinding letter of intent to acquire Canadian residential mortgage providers Brightpath Capital Corp. and Brightpath Residential Mortgage LP I.