Circa Enters into Amalgamation Agreement with Sicame and Agrees to Sell Telecom Business

Calgary, Alberta--(Newsfile Corp. - March 8, 2023) - Circa Enterprises Inc. (TSXV: CTO) ("Circa" or the "Company") is pleased to announce that it has entered into an amalgamation agreement dated March 8, 2023 (the "Amalgamation Agreement") with Sicame Canada Holdings Inc. ("Sicame Canada"), and 2023 Sicame Amalco Inc. ("SubCo"), a wholly-owned subsidiary of Sicame, in connection with the proposed amalgamation of Circa and SubCo (the "Amalgamation"). Sicame Canada and Subco are subsidiary entities of Sicame Group SAS ("Sicame Group"), a worldwide industrial group specializing in products and services related to the transmission and distribution of electrical energy. The Amalgamation, if completed will result in Circa and SubCo continuing as one corporation that is expected to be renamed "Hydel Inc." ("Amalco") and be wholly owned by Sicame Canada. Upon the completion of the Amalgamation, Sicame Canada will be the sole shareholder of Amalco, and the Circa Shareholders (as defined below) will each receive a cash payment from Sicame Canada equal to their pro rata portion of the total consideration paid by Sicame Canada. The total base consideration payable by Sicame Canada in connection with the Amalgamation is $26,500,000, but is subject to a number of adjustments. As a result of such adjustments the total consideration receivable by Circa shareholders will not be definitively known until shortly before completion of the Amalgamation but is expected to be in the range of $2.10 to $2.20 per Circa common share (such adjusted amount being, the "Consideration").

This Amalgamation constitutes a "reviewable transaction" for Circa, as such term is defined in the policies of the TSX Venture Exchange ("TSXV"), and a "business combination" transaction subject to TSXV Policy 5.9 - Protection of Minority Security Holders in Special Transactions ("TSXV Policy 5.9") and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("Multilateral Instrument 61-101").

Concurrent with the signing of the Amalgamation Agreement, Circa and Guardian Telecom Ltd. ("Guardian") entered into an asset purchase agreement dated March 8, 2023 (the "Asset Purchase Agreement"), respecting the sale of the Circa Telecom Business (defined below) and related assumed liabilities, to Guardian. This Asset Purchase Agreement has been contemplated in the Amalgamation Agreement and the sale of the Circa Telecom Business is intended to close immediately following the closing of the Amalgamation. The Asset Purchase Agreement constitutes a "related party transaction" subject to TSXV Policy 5.9 and Multilateral Instrument 61-101.

Due to the involvement of certain directors and officers of the Company in the Asset Purchase Agreement, a special committee (the "Special Committee") of independent directors, consisting of Peter Bourgeois, Michael Lowry and Warren White, was established to consider the Amalgamation Agreement and Asset Purchase Agreement without conflict of interest and to negotiate the terms of the agreements.

Cory Tamagi, President and CEO of Circa, stated, "We are pleased to present this proposal to the Company's shareholders, including our largest shareholder, who is supportive of the transaction. Circa's diverse product offering, high quality standards and service are beneficial to its customers and for employee engagement. However, the Company's relatively small public company size and lack of liquidity is not well-suited for trading in the marketplace. The offer by Sicame Canada provides an excellent liquidity event and opportunity for shareholders to realize fair compensation for the underlying value of the Company. We believe that after the completion of the proposed amalgamation, the metals business will benefit from Sicame Group's expertise and global presence in the energy transmission and distribution markets, while the telecom business will be able to focus on growing its markets in the areas of safety, security and protection of critical infrastructure."

Summary of the Amalgamation

Pursuant to the Amalgamation Agreement, Sicame Canada has agreed to acquire Circa, indirectly by way of an amalgamation of Circa and SubCo under the Business Corporations Act (Alberta) (the "ABCA"). In exchange for the cancellation of the issued and outstanding common shares of Circa (the "Common Shares") at closing of the Amalgamation, the holders of the Common Shares (the "Circa Shareholders") will receive a pro rata portion of the Consideration, estimated to be equal to approximately $2.10 to $2.20 for every Common Share held. The estimated Consideration equates to an estimated 53% to 60% premium to Circa Shareholders based on the 20-day weighted average stock price.

Completion of the Amalgamation is subject to a number of conditions being satisfied or, where permitted, waived by one or more of Circa or Sicame Canada and SubCo at or prior to closing of the Amalgamation. These conditions include the approval of the Circa Shareholders, together with approval of the Majority of the Minority (as defined below) at the Meeting; approval of the TSXV; the closing conditions of the Asset Purchase Agreement being satisfied or waived; the settlement of any outstanding options or stock option agreements; the receipt of all necessary third-party approvals; and, the satisfaction of certain other closing conditions customary for a transaction of this nature.

There are no finders fees payable in conjunction with either the Amalgamation or the Telecom Transaction.

Details of this arm's-length Amalgamation and the Asset Purchase Agreement will be disclosed in a management information circular of Circa (the "Circular"), which will be delivered to Circa Shareholders and will also be available on SEDAR at www.sedar.com. A copy of the Amalgamation Agreement will also be made available on SEDAR at www.sedar.com. All Circa Shareholders are urged to read such materials once circulated, as it will contain important additional information concerning the Amalgamation and the sale of Circa's Telecom Business. There can be no assurance that the Amalgamation will be completed as proposed or at all.

Shareholder Approvals, Lock-up Agreements and Closing

It is expected that the special meeting of Circa Shareholders (the "Meeting") to approve the proposed Amalgamation and sale of the Telecom Business will be held virtually on April 10, 2023 and, if approved at the Meeting, it is expected that the Amalgamation would close shortly thereafter.

Implementation of the Amalgamation will be subject to approval at the Meeting by at least two-thirds of the votes cast by all the Circa Shareholders, based on the votes cast by Circa Shareholders present virtually or represented by proxy at the Meeting, and by a majority of the votes cast by disinterested shareholders represented by proxy at the Meeting ("Majority of the Minority"). In relation to this approval, the "minority" holders for the purpose of MI 61-101 are anticipated to include all holders of Common Shares with the exception of Robert Johnston, Cory Tamagi, Angela Hulshof and Darren Epp.

As of the date hereof, The Article 6 Marital Trust created under the First Amended and Restated Jerry Zucker Revocable Trust dated April 2, 2007, Cory Tamagi, Angela Hulshof, Darren Epp and Robert Johnston (together, the "Supporting Shareholders") collectively beneficially own, directly or indirectly, or exercise control or direction over, 4,693,280 Common Shares, which represent approximately 45.8% of the issued and outstanding Common Shares. Each of the Supporting Shareholders have, separately entered into lock-up agreements with Sicame Canada and SubCo under which they have agreed, among other things, to vote in favour of the Amalgamation, and to be restricted by non-solicitation and exclusivity provisions. Forms of the Lock-Up Agreements with the Supporting Shareholders, will be reviewable on the Company's profile on SEDAR at www.sedar.com.

Fairness Opinion

Sequeira Partners has provided the Special Committee with an opinion to the effect that, based upon its analysis and hypothesis and subject to the full text of the fairness opinion, including the assumptions, qualifications and limitations set out therein, the Consideration to be received by the Circa Shareholders under the Amalgamation is fair, from a financial point of view, to such Circa Shareholders.

Board Recommendation

Upon receipt of a recommendation from the Special Committee, the Board has unanimously determined (with Messrs. Johnston and Tamagi abstaining) that the Amalgamation and the Telecom Transaction are in the best interests of the Company, are fair to the Circa Shareholders and recommends the approval of the Transaction by the Circa Shareholders.

Summary of Telecom Business Asset Purchase Agreement

The Asset Purchase Agreement sets out the terms of the related party transfer by the Company (or its successor, Amalco) of its business related to the telecommunications products, sold under the CircaMax, Guardian Telecom, and Teletics trade names and the shares of Westronic Inc. (the "Circa Telecom Business") as well as the assumption of liabilities related to the Circa Telecom Business, to Guardian (the "Telecom Transaction").

Guardian is a newly incorporated private corporation owned by Cory Tamagi, Nicole Tamagi, Angela Hulshof, Thomas Hulshof, Darren Epp, Joann Hickle-Epp and Robert Johnston. Each of whom is currently a director and/or officer of Circa or the spouse of a director and/or officer of Circa.

The Telecom Transaction is anticipated to close immediately following the effective time of closing of the Amalgamation (the "Telecom Closing"), and at such time, Guardian will pay Amalco (as amalgamated successor to Circa) cash consideration equal to $3,300,000. The purchase price paid at the time of the Telecom Closing will be increased or decreased, dollar for dollar, by the amount by which the actual working capital at the Telecom Closing time differs from the target working capital (as described further in the Asset Purchase Agreement).

The Telecom Closing is conditional on, among other things: the completion of the Amalgamation; obtaining shareholder approval at the Meeting; Cory Tamagi, Darren Epp and Angela Hulshof signing non-competition and solicitation agreements with Sicame Canada; the receipt of all necessary third-party approvals; and the satisfaction of certain other closing conditions customary for a transaction of this nature.

The terms of the Asset Purchase Agreement will be described in greater detail in the Circular which will be available on SEDAR at www.sedar.com, and will be delivered to Circa.

Listing

Subsequent to the Amalgamation, Amalco is expected to delist the Common Shares from the TSXV. The TSXV delisting will be subject to satisfying all of the requirements of the TSXV, and additional disclosure will be made as to the timing of the delisting. In addition, it is anticipated that the Company will cease to be a "reporting issuer" under applicable Canadian securities legislation.

Strategic Highlights and Benefits of the Transaction

The Board of Circa believes that the Amalgamation and Telecom Transaction (collectively, the "Transaction") is in the best interests of the Company and is fair to the Circa Shareholders. In particular, this view is based on the below factors:

• the Amalgamation provides the Circa Shareholders with cash consideration representing a significant premium estimated to be approximately 53% to 60% for their shareholdings (based on the 20-day volume-weighted average price of the Common Shares);

• the absence of strategic alternatives (including maintaining the status quo and pursuing the Corporation's business plan) that would result in superior value creation for the Circa Shareholders when compared to the premium offered to the Circa Shareholders in connection with the Amalgamation;

• the fairness opinion of Sequeira Partners that, subject to customary assumptions and limitations set forth therein, the Consideration to be received by Circa Shareholders under the Amalgamation is fair, from a financial point of view, to the Circa Shareholders;

• the size of the Circa Telecom Business being insufficient to support a continued public listing if Circa's metals business were to be sold independently;

• the Supporting Shareholders, have agreed to vote their Common Shares in favour of the Amalgamation and have undertaken not to solicit any competing transaction;

• management of the Company's assessment that the relevant stakeholders (including employees, suppliers and customers), are not expected to be affected by reason of the consummation of the Amalgamation;

• the likelihood that the Amalgamation will be completed because, among other things, the Amalgamation is not subject to financing conditions in favour of Sicame Canada; and

• the tax and structuring advantages provided by the Amalgamation and concurrent Telecom Transaction.

About Circa Enterprises Inc.
Circa Enterprises Inc. is a public company headquartered in Calgary, Alberta with operations in Alberta and Ontario. Circa designs, manufactures and supplies telecommunications equipment, cable and connectivity products, metal enclosures, electrical equipment, and other goods to customers in the telecommunications, electrical, and construction industries. The outstanding common shares of Circa are listed and trade on the TSXV under the trading symbol CTO. Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

About Sicame

Sicame Group SAS is a global, privately held company based out of France, with operations throughout in over 25 countries on all continents. Sicame Group is a leading European supplier of products and services to the power transportation and distribution markets, which manufactures a broad range of low, medium and high voltage hardware, connectors, safety equipment, and tools and accessories for the transmission and distribution of electricity as well as for other industrial and commercial markets. Over the years Sicame Group has grown organically and through acquisitions and reached over €500 million in revenue in 2022, while maintaining strong profitability.

Sicame Canada is a newly formed, wholly-owned subsidiary of Sicame Group, formed under the laws of Ontario. SubCo is a newly formed, wholly-owned subsidiary of Sicame Canada, incorporated under the laws of Alberta for the purposes of this Amalgamation.

Forward-Looking Statements
Certain information in this News Release may constitute "forward-looking" information that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Company or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this News Release, this information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan" and other terminology. In particular, this forward-looking information and forward-looking statements in this News Release includes, but is not limited to, the completion and timing of the referenced proposed, the impact of such acquisition on Circa Shareholders, the financing of the transaction and the future industry growth and success. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions (such as those relating to the performance of Circa's metals and telecom businesses) that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed in or implied by these forward-looking statements. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this News Release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information is available in the Company's management information circular, which be made available on SEDAR at www.sedar.com.

For further information, please contact:

Mr. Cory Tamagi
Director, President and CEO
Circa Enterprises Inc.
(403) 258-2011

Mr. Darren Epp
Executive Vice President
Circa Enterprises Inc.
(403) 258-2011

E-Mail: investor@circaent.com
Website: www.circaent.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/157772