LGC Capital signs letter of intent for proposed acquisition of 20% of Etea Sicurezza Group Ltd

Symbol: TSX-V: LG

MONTREAL, Nov. 1, 2017 /CNW Telbec/ - LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased to announce that it has entered into a letter of intent with Etea Sicurezza Group Ltd ("Etea Sicurezza") for a potential acquisition of approximately 20% of Etea Sicurezza by LGC. The letter of intent will form the basis for the negotiation of a mutually-satisfactory definitive agreement to be entered into between LGC, on the one hand, and Etea Sicurezza and its shareholders, on the other hand. LGC and Etea Sicurezza are at arm's-length.

Based in London, England, Etea Sicurezza (www.eteasicurezzagroup.com) is a private company which specializes in fire safety and security by providing products and services to international companies such as L'Oreal, Coca Cola, BASF, Doha Metro and others. Etea Sicurezza was founded in 1998 and is now a global leader in the field of high-tech safety with offices in seven countries and agents in 20 countries. Etea Sicurezza operates as an EPC (Engineering, Procurement and Construction) contractor implementing safety systems, and provides proprietary and patented technologies that are customized and fully compliant with international standards.

"We are very pleased to have signed the letter of intent with Etea Sicurezza," commented Mazen Haddad, Co-Chairman of LGC and head of its merchant banking division. "We believe that Etea Sicurezza is a strong company with great growth potential and that our proposed transaction will be beneficial for LGC and our shareholders."

The letter of intent provides that LGC will incorporate a new, wholly-owned subsidiary corporation ("Holdco") which will issue 11,280,000 shares to LGC; Holdco will acquire 87.5% of the issued and outstanding shares of Etea Sicurezza from its principal shareholders in exchange for an aggregate of 45,120,000 Holdco shares and will acquire the balance of 12.5% of the issued and outstanding shares of Etea Sicurezza from a minority shareholder for cash, to be funded by LGC. Holdco will effect a private placement or other similar financing of 1,200,000 shares at a price of $0.83333 per share for gross proceeds of $1 million. The minority Etea Sicurezza shareholder will undertake to subscribe for common shares of LGC by way of private placement in an amount equal to the amount it receives for its 12.5% interest at a price per share equal to the then-market price of LGC's shares.

The letter of intent provides that at the closing of the proposed transaction, Holdco will have 60 million shares issued and outstanding, of which, among others, the current Etea Sicurezza shareholders will hold an aggregate of approximately 75%, LGC will hold approximately 19%, and new investors will hold an aggregate of 2%. Holdco will own all of the issued and outstanding shares of Etea Sicurezza and have cash of approximately $1 million.

The letter of intent provides that at the closing of the proposed transaction, the Board of Directors of Holdco will consist of three nominees of Etea Sicurezza and two nominees of LGC, of whom at least a majority will be independent directors within the meaning of Canadian securities regulations.

The proposed transaction is subject to a number of conditions, including completion of due diligence reviews by LGC and Etea Sicurezza, to their respective satisfaction; the absence of any material adverse change with respect to Etea Sicurezza; the negotiation and execution by LGC and Etea Sicurezza of a definitive agreement in respect of the transaction; receipt of all corporate approvals, including approval of the Boards of Directors of LGC and Etea Sicurezza; and receipt of all other necessary regulatory approvals, including that of the TSX Venture Exchange, as the proposed transaction may be a "Reviewable Transaction" under Policy 5.3 "Acquisitions and Dispositions on Non-Cash Assets" of the TSX Venture Exchange. LGC cannot give any assurance that such conditions will be satisfied, that the proposed transaction will be successfully completed or as to the timing of the proposed transaction.

LGC also announces that it has completed its previously-announced transaction (see LGC press release - October 10, 2017) whereby LGC is guaranteeing repayment by Etea Sicurezza of notes issued by it in an aggregate principal amount of USD $1,000,000. As consideration for the guarantee, Etea Sicurezza will issue shares to LGC representing 3% of its outstanding shares and pay a cash fee to LGC. These shares will be cancelled upon completion of the proposed transaction described in this press release, with the guarantee from LGC remaining in force. The letter of intent with Etea Sicurezza does not provide for a distribution by LGC a portion of the shares of Etea Sicurezza to LGC's shareholders, as referred to in LGC's previous press release, although LGC may consider this option at a future date, subject to regulatory approval.

About LGC Capital (http://www.lgc-capital.com)

LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to LGC Capital Ltd. ("LGC"), its operations, strategy, investments, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of LGC, including the proposed transaction with Etea Sicurezza described herein, could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the factors described under "Risk Factors and Risk Management" in LGC's Management's Discussion and Analysis for the fiscal year ended September 30, 2016, as filed on SEDAR (www.sedar.com). The cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and LGC has no obligation to update such statements, except to the extent required by applicable securities laws.

Information Relating to Etea Sicurezza Group Ltd

All information contained in this press release relating to Etea Sicurezza has been provided to LGC by Etea Sicurezza.  LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.

Caution Regarding Press Releases

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

SOURCE LGC Capital Ltd

Company & Media Contacts, Canada contact: John McMullen, Chief Executive Officer, Tel.: [phone], Email: [email protected]; Mazen Haddad, Co-Chairman, Email: [email protected]; London contact: Anthony Samaha, Chief Financial Officer, Tel.: [phone]; Investor Relations contact: Dave Burwell, The Howard Group Inc., Tel.: [phone], Toll Free: 1-888-221-0915, Email: [email protected]