A&W Revenue Royalties Income Fund Obtains Unitholder Approval for Combination Transaction with A&W Food Services

VANCOUVER, BC, Oct. 8, 2024 /CNW/ - A&W Revenue Royalties Income Fund (TSX: AW.UN) (the "Fund") is pleased to announce that, at its special meeting ("Meeting") of unitholders held earlier today, unitholders voted overwhelmingly in favour of the proposed strategic combination transaction (the "Transaction") with A&W Food Services of Canada Inc. ("A&W Food Services") that will create a leading Canadian publicly traded growth-focused quick service restaurant ("QSR") company ("A&W Food Services NewCo").

The Transaction required the approval of at least (a) two thirds of the votes cast by unitholders (including for this purpose holders of limited voting units and exchangeable securities of the Fund) present in person or represented by proxy at the Meeting, and (b) a simple majority of the votes cast by unitholders present in person or represented by proxy at the Meeting, excluding the votes of A&W Food Services and any other unitholders whose votes were required to be excluded for the purposes of "minority approval" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Of the votes cast at the Meeting with respect to the Transaction, 99.20% were voted in favour of the Transaction. In addition, of the votes cast at the Meeting with respect to the Transaction, excluding those votes required to be excluded pursuant to MI 61-101, 98.11% were voted in favour of the Transaction. This strong support underscores the confidence of unitholders in the strategic vision and future growth potential of the combined company.

At the Meeting, unitholders also voted to approve the equity incentive plan of A&W Food Services NewCo (the "Equity Incentive Plan") to be effective following closing of the Transaction. The Equity Incentive Plan required the approval of a simple majority of the votes cast by unitholders (including for this purpose holders of limited voting units and exchangeable securities of the Fund) present in person or represented by proxy at the Meeting. Of the votes cast at the Meeting with respect to the Equity Incentive Plan, 96.41% votes were voted in favour of the Equity Incentive Plan.

A report of voting results for the Meeting will be available on the SEDAR+ profile of the Fund at www.sedarplus.ca and on the Fund's website at https://awincomefund.ca/investors/special-meeting2024.

The Transaction is structured as a statutory plan of arrangement under the Canada Business Corporations Act. The Fund and A&W Food Services intend to seek a final order from the Ontario Superior Court of Justice (Commercial List) to approve the plan of arrangement on October 11, 2024 (the "Final Order"). Completion of the Transaction remains subject to the satisfaction or waiver of certain customary closing conditions, including the receipt of the Final Order. Subject to the satisfaction or waiver of all conditions to the Transaction, the Transaction is expcted to be completed later this month. 

Under the terms of the Transaction, each unitholder had the right to elect to receive in exchange for each unit (a) $37.00 in cash (the "Cash Consideration"), (b) one A&W Food Services NewCo Share (the "Share Consideration"), or (c) a combination of 32.54277% of the Cash Consideration (being $12.040825) and 67.45723% of the Share Consideration (being 0.6745723 of an A&W Food Services NewCo Share). The elections of unitholders to receive Cash Consideration or Share Consideration were subject to proration in the event that unitholders elected, in the aggregate, to receive more or less than $175.6 million in cash consideration, such that in all cases, a total of 4,746,582 units will be purchased for cash at $37.00 per unit. Based on valid elections made prior to the election deadline on October 4, 2024, unitholders who elected Cash Consideration and Combination Consideration will not be subject to proration and unitholders who elected, or were deemed to elect, Share Consideration will receive Cash Consideration in respect of approximately 2.7% of their units and Share Consideration for the balance as a result of proration.

About A&W Revenue Royalties Income Fund

A&W Revenue Royalties Income Fund is a limited purpose trust established to invest in Trade Marks, which through its interest in the A&W Trade Marks Limited Partnership (the "Partnership"), owns the A&W trade-marks used in the A&W QSR business in Canada. The A&W trade-marks comprise some of the best-known brand names in the Canadian foodservice industry. In return for licensing A&W Food Services to use its trade-marks, Trade Marks (through the Partnership) is entitled to royalties equal to 3% of the gross sales reported by A&W restaurants in the Royalty Pool.

About A&W Food Services

A&W is a leading QSR and the second largest burger chain in Canada with a 68-year history of service excellence, menu innovation and value creation. Operating coast-to-coast and serving over 197 million guests annually, A&W restaurants feature famous trade-marked menu items such as The Burger Family®, Chubby Chicken® and A&W Root Beer®.

® trademark of A&W Trade Marks Limited Partnership, used under license.

Forward-looking Information:

Certain statements in this press release contain forward-looking information within the meaning of applicable securities laws in Canada. The forward-looking information in this press release includes, but is not limited to, expectations relating to the timing and completion of the Transaction and statements relating to the Final Order. The words "expects", "plans", "will", and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words.

This forward-looking information is based on a number of assumptions that, while considered reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking information. Such assumptions include, but are not limited to, the Fund's ability to obtain the Final Order and consummate the Transaction on the terms, conditions and timing currently contemplated.

Inherent in forward-looking information are risks and uncertainties beyond the Fund's ability to predict or control that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. The forward-looking information in this press release is subject to, among others, the specific risks and uncertainties relating to the Transaction set out in the Fund's management information circular dated August 29, 2024 (the "Circular") under "Risk Factors", in addition to the other information contained, or incorporated by reference, in the Circular. The Circular can be accessed under the Fund's issuer profile on SEDAR+ at sedarplus.ca. Readers are cautioned that the risk factors referred to above are not exhaustive and additional risks and uncertainties, including those currently unknown or considered immaterial to Fund may also adversely affect the Transaction. There can be no assurance that forward-looking information contained in this press release will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

The forward-looking information contained in this press release is based on the beliefs of the Fund's management as well as on assumptions which such management believes to be reasonable based on information available at the date hereof and is subject to change after such date. All forward-looking information in this press release is qualified in its entirety by this cautionary statement and, except as required by law, the Fund undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.

SOURCE A&W Revenue Royalties Income Fund

For further information: Investor Contact, A&W Investor Relations, [email protected], 604-988-2141; Media Contact, Trevor Zeck, FGS Longview, [email protected], 604-375-5941