Anjac to Acquire Apollo in an All Cash, C$327 Million Transaction

Apollo Healthcare Corp. (TSX: AHC – “Apollo” or the “Company”) and Anjac SAS (“Anjac”) are pleased to announce that they have entered into a definitive arrangement agreement (“Arrangement Agreement”) pursuant to which Anjac has agreed to acquire all of the issued and outstanding Class B shares of Apollo (“Apollo Shares”), other than certain Apollo Shares held by members of management (“Rollover Shares”), by way of a statutory plan of arrangement (“Plan of Arrangement”) under the Business Corporations Act (Ontario) (“Transaction”). Under the terms of the Arrangement Agreement, holders of Apollo Shares (“Apollo Shareholders”) will receive C$4.50 in cash for each Apollo Share held (“Consideration”), which implies an aggregate equity value for Apollo (including the Rollover Shares), of approximately C$327 million, on a fully-diluted, in-the-money, treasury method basis.

Charles Wachsberg, Chairman and Co-Chief Executive Officer of Apollo, commented: “We are delighted to be able to deliver a substantial premium and investment liquidity for all of our faithful shareholders through Apollo’s partnership with Anjac. Apollo’s established leadership and commitment to strategic, client centric engagement, as well as to building world class retail brands for its cherished family of clients will be further enhanced in its association with Anjac. We look forward to working closely with Anjac to deliver industry leading innovation and customization throughout our global distribution platform.”

Aurelien Chaufour, Chief Executive Officer of Anjac, commented: “With assets in the USA, Canada and Europe, Anjac is a global leader in developing first to market and exclusive technologies within the health and beauty care and pharmaceutical sectors. We look forward to collaborating with the talented Apollo team on future initiatives and to bringing exceptional quality products to market in the dedicated service of Apollo’s customers.”

HIGHLIGHTS & KEY BENEFITS TO APOLLO SHAREHOLDERS:

• The Consideration represents a 157% premium to the closing price of the Apollo Shares on the Toronto Stock Exchange (“TSX”) as at November 4, 2021 and a 172% premium over the volume-weighted average price of the Apollo Shares on the TSX based for the 20 trading days ending on November 4, 2021.
• The all cash offer crystalizes value for Apollo Shareholders and provides full liquidity and certainty of value.
• As a condition to the Transaction, Apollo’s Co-CEOs, Charles Wachsberg and Richard Wachsberg (collectively, the “Rollover Shareholders”) have agreed to exchange approximately 64% of their total Apollo Shares for equity in an affiliate of Anjac, which will represent 30% of the pro forma equity interests therein, valued at the same price as the Consideration.
• Apollo's board of directors (“Board”) formed an independent committee (the “Independent Committee”) of directors, consisting of Jeffrey Spiegelman, Andrew Schachter and Carlo LiVolsi, to negotiate and review the Transaction. The Independent Committee unanimously recommended that the Board approve the Transaction and the Board (with interested directors abstaining), having received the recommendation of the Independent Committee, unanimously approved the Transaction and unanimously recommends that Apollo Shareholders vote in favour of the Transaction.
• The Rollover Shareholders, who hold approximately 46.6% of the Apollo Shares, have entered into “hard” irrevocable voting support agreements (“Hard Lock-Ups”) with Anjac pursuant to which they have agreed to vote their Apollo Shares in favour of the shareholder resolution approving the Transaction. The remaining directors and officers of Apollo, who hold approximately 5.1% of the Apollo Shares, have entered into “soft” voting support agreements (“Soft Lock-Ups”). Together, the Hard Lock-Ups and Soft Lock-Ups represent approximately 51.7% of the Apollo Shares.
• The Independent Committee obtained a formal valuation (the “Formal Valuation”) from its independent financial advisor, Cormark Securities Inc. (“Cormark”), as required by MI 61-101 (as defined below). The Formal Valuation was prepared under the supervision of the Independent Committee and determined that, as at November 4, 2021, and based upon and subject to the assumptions, limitations and qualifications contained in Cormark’s written valuation report, the Consideration falls within the valuation range per Apollo Share determined by Cormark. In addition, Cormark has provided a fairness opinion to the Independent Committee that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as Cormark considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the Apollo Shareholders (other than the Rollover Shareholders).
• The Board received an opinion from its financial advisor, Canaccord Genuity Corp. (“Canaccord Genuity”), that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as Canaccord Genuity considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the Apollo Shareholders (other than the Rollover Shareholders).

TERMS OF THE TRANSACTION

The Transaction will be effected by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). The implementation of the Plan of Arrangement will be subject to Apollo Shareholder approval at a special meeting of Apollo Shareholders (the “Special Meeting”), which is expected to be held prior to the end of the year. The Plan of Arrangement will constitute a "business combination" for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), and will therefore also require the approval of the holders of a majority of the shares cast by Apollo Shareholders at the Special Meeting, excluding the Apollo Shares held by the Rollover Shareholders, in addition to approval by 66 2/3% of all votes cast by Apollo Shareholders at the Special Meeting. The Transaction is also subject to the approval of the Ontario Superior Court of Justice, in addition to certain other closing conditions customary to a Transaction of this nature. Other than the approval of the TSX, there are no regulatory approvals to complete the Transaction.

Additional details of the Transaction will be provided to Apollo Shareholders in an information circular expected to be mailed in the coming weeks. It is currently anticipated that, subject to receipt of all court, shareholder and other approvals, the Transaction is expected to be completed in the fourth quarter of 2021.

INDEPENDENT COMMITTEE AND BOARD RECOMMENDATION

The Independent Committee unanimously recommended that the Board approve the Transaction and the Board (with interested directors abstaining), having received the recommendation of the Independent Committee, unanimously approved the Transaction and unanimously recommends that Apollo Shareholders vote in favour of the Transaction. In making their respective determinations, the Board and the Independent Committee considered (as applicable), among other factors, (i) the fairness opinion received from Canaccord Genuity which states that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as Canaccord Genuity considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the Apollo Shareholders (other than the Rollover Shareholders), (ii) the Formal Valuation for purposes of MI 61-101 from Cormark, independent financial advisor to the Independent Committee, pursuant to MI 61-101, (iii) the fairness opinion from Cormark, which states that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as Cormark considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the Apollo Shareholders (other than the Rollover Shareholders), and (iv) the terms of the Arrangement Agreement.

Apollo and Anjac have provided representations and warranties customary for a transaction of this nature and Apollo has provided customary interim period covenants regarding the operation of its business in the ordinary course. In addition, the Arrangement Agreement includes customary deal protection provisions, including that Apollo has agreed not to solicit or initiate any discussion regarding any other business combination, subject to customary “fiduciary out” rights. Apollo has also granted Anjac a right-to-match any superior proposal and will pay a termination fee of C$11.5 million to Anjac if the Arrangement Agreement is terminated in certain circumstances, including if Apollo recommends or approves an acquisition proposal or enters into an agreement with respect to a superior proposal. Apollo and Anjac have also agreed to make an expense reimbursement payment to the other party if the Arrangement Agreement is terminated in certain circumstances.

The Transaction is not subject to a financing condition and the Consideration will be funded from Anjac’s current cash balance and a committed debt facility to be provided on closing of the Transaction.

ADVISORS

Canaccord Genuity Corp. acted as financial advisor and Miller Thomson LLP acted as legal counsel to Apollo. Cormark Securities Inc. acted as independent financial advisor to the Independent Committee in preparing the Formal Valuation and Cassels Brock & Blackwell LLP acted as legal counsel to the Independent Committee. Canaccord Genuity Corp. provided a fairness opinion to the Board, and Cormark Securities Inc. provided the Formal Valuation and a fairness opinion to the Independent Committee.

Raymond James Ltd. acted as exclusive financial advisor to Anjac and Fasken Martineau DuMoulin LLP and Gibson Dunn & Crutcher LLP acted as legal counsel to Anjac.

ABOUT APOLLO HEALTHCARE CORP.

Based in Ontario, Canada, Apollo Healthcare Corp. is one of the largest private label personal care product manufacturers in North America, developing and manufacturing retailer branded and private label products for major North American retailers. Apollo’s products are sold in tens of thousands of stores across North America and its customer base spans across major North American grocery, drug, and mass merchandise retailers, users as well as wholesale clubs. In addition to private label, Apollo also manufactures products on a contract basis for many of its clients.

ABOUT ANJAC SAS

Anjac Health and Beauty Services provides contract development, manufacturing services, and analytical testing for pharmaceuticals, medical devices, health and hygiene products, and beauty products. The Anjac group of companies brings together 10 leading, complementary enterprises, and 14 research, development and production facilities, across the health, hygiene, beauty and food supplements industries. Anjac was founded in 2008, has approximately 1,700 employees globally, and is based in Paris, France.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of Apollo as of the date of this press release, unless otherwise stated. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information. In particular, this press release contains, without limitation, forward-looking information and statements pertaining to: the Transaction and the anticipated timing of required regulatory, court and shareholder approvals; mailing of the information circular related to the Special Meeting and the timing of the Special Meeting; the anticipated benefits of the Transaction for Apollo Shareholders; the ability of the parties to satisfy the other conditions to, and to complete, the Transaction; and the anticipated timing for the closing of the Transaction.

With respect to the forward-looking statements contained in this press release, Apollo has made assumptions regarding, among other things, that the Transaction will be completed on the terms contemplated by the Arrangement Agreement; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court, shareholder, stock exchange and other third party approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and other expectations and assumptions concerning the Transaction. Although Apollo believes that the expectations reflected in the forward-looking statements contained in this press release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this press release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Apollo’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, completion of the Transaction is subject to a number of conditions which are typical for transactions of this nature, certain of which are outside the control of Apollo, failure to satisfy any of these conditions, the emergence of a superior proposal or the failure to obtain approval of Apollo Shareholders may result in the termination of the Arrangement Agreement. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

Readers are cautioned that the forgoing lists of factors are not exhaustive. Additional information on these and other factors that could affect Apollo’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Apollo’s website (www.apollohealthcarecorp.com). Furthermore, the forward-looking statements contained in this press release are made as at the date of this press release and Apollo does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

This release does not constitute an offer to purchase or a solicitation of an offer to sell securities. Shareholders are advised to review any documents that may be filed with securities regulatory authorities and any subsequent announcements because they will contain important information regarding the Transaction and the terms and conditions thereof.

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