Pan American Fertilizer Corp. announced its intention this week to acquire Pacific Potash Corp. Pan American is a Canadian company focused on the extraction of a specific type of fertilizer called calcium sulphate (also referred to as “Agricultural Gypsum”).
"Pan American considers the combination of the assets held by Pacific Potash and its subsidiaries to be consistent with Pan American’s mission to bring its shareholders quality projects within the fertilizer industry," said president and CEO of Pan American, Randy Wright.
Balbir Johal of Pacific Potash Corp stated, “We are very pleased with the proposed transaction as it provides our shareholders with a substantial premium and meaningful ownership in a stronger combined fertilizer-focused mining company with the financial resources to withstand a protracted lull in the capital markets. We believe this Transaction to be mutually beneficial to both parties and strategically positions the new company well for future value creation.”
Under the terms of the deal, Pacific Potash shareholders will exchange their shares for common shares in Pan American, which will result in Pacific Potash shareholders owning 37.5 percent of the issued and outstanding common shares of Pan American once the transaction is complete. The effective rate of exchange is approximately 0.631 Pan American share for each Pacific Potash share.
The Transaction is an arm’s length transaction and is subject to the prior approval of the TSX Venture Exchange (the “TSXV”) and the Canadian National Stock Exchange (the “CNSX”). It is the intention of the parties to apply to the TSXV to have the common shares of Pan American listed on the TSXV concurrently with the completion of the Transaction.