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MCAN Mortgage Corporation To Acquire Xceed Mortgage Corporation

Stock market symbol TSX: MKP

TORONTO, March 26, 2013 /CNW/ - MCAN Mortgage Corporation ("MCAN", the "Company" or "we") announced today that it has entered into a definitive agreement (the "Arrangement Agreement") to acquire all of the issued and outstanding common shares of Xceed Mortgage Corporation ("Xceed") for $1.75 per share, for a total consideration of approximately $53.0 million (the "Transaction") paid with a combination of cash and common shares of MCAN.  The Transaction will be effected pursuant to a plan of arrangement under Section 182 of the Business Corporations Act ( Ontario) and is expected to close within approximately 90 days.  The Transaction is subject to Xceed shareholder approval, court and regulatory approvals and other closing conditions as described below.

Under the terms of the Arrangement Agreement, Xceed shareholders will, for each share held, receive at their election, subject to adjustment: (i) 0.118 MCAN common shares or (ii) $1.75 in cash, or a combination thereof, subject to a maximum of $30.3 million in aggregate cash being paid.  The consideration represents a premium of 16.67% to Xceed's closing price per share on the Toronto Stock Exchange (the "TSX") as at March 25, 2013 and a 7.03% premium to Xceed's 30-day volume weighted average price per share as at close of markets on March 25, 2013.  Assuming the maximum cash consideration is elected to be received by the Xceed shareholders, the equity component of the purchase price will be approximately $22.7 million and, upon completion of the Transaction, existing Xceed shareholders will own approximately 7.54% of MCAN on a fully diluted basis.

This Transaction provides MCAN with a unique opportunity to acquire an established mortgage origination and underwriting platform that is expected to deliver incremental asset growth and potential for increased income for MCAN.  Cash and other liquid assets, including Canada Mortgage and Housing Corporation ("CMHC") insured mortgages, are expected to represent a significant proportion of Xceed's assets at closing. In addition, the acquisition provides new equity for MCAN on a cost effective basis, providing it with capacity to achieve its growth objectives.

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