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Axis Auto Finance closes Cars on Credit Financial deal

Axis Auto Finance Inc. has completed the acquisition of Newmarket, Ontario-based subprime automotive finance company Cars on Credit Financial Inc. for a total consideration of C$11 million in cash.

The C$11 million include about C$6.5 million in cash, about C$3.0 million in cash paid into escrow and a contingent amount of up to C$1.5 million in cash.

The acquisition was funded by a private placement financing which closed Jan. 19 through a syndicate of agents co-led by Canaccord Genuity Corp. and INFOR Financial Inc. and including PI Financial Corp. and Raymond James Ltd.

Pursuant to the financing, Axis Auto Finance issued 27,142,858 subscription receipts at a price of 70 Canadian cents per subscription receipt for gross proceeds of about C$19 million.

Each subscription receipt was exchanged upon the closing of the acquisition for 1 common share of Axis Auto Finance and half of 1 common share purchase warrant and the proceeds from the sale of the subscription receipts were released from escrow. Each whole warrant entitles the holder to purchase a common share of the company at an exercise price of 90 cents for a period of 36 months following the closing date of the offering.

INFOR Financial Inc. acted as financial adviser to Axis Auto Finance while Dentons Canada LLP acted as the legal counsel.