Mosaic Capital Corporation Executes New Banking Agreement with ATB Corporate Financial Services for $35 million Credit Facility

CALGARY, Jan. 25, 2017 /CNW/ - Mosaic Capital Corporation ("Mosaic") (TSX-V Symbols: M, M.PR.A and M.DB) is pleased to announce that it has executed a new credit agreement with ATB Corporate Financial Services ("ATB") which provides for a $35 million credit facility to Mosaic (the "Facility"). It replaces Mosaic's $25 million facility with ATB that has been in place since 2014.

The Facility is comprised of a $35 million revolving committed credit facility which is available for the purposes of acquisitions, day to day operating requirements and capital expenditures. It is for a 3-year term, bearing interest at rates ranging from prime plus 0.50% - 1.50% and is secured by, among other things, a general security agreement and the assignment of securities that Mosaic holds in certain subsidiaries. 

The Facility includes financial covenants structured to work with Mosaic's unique capital and corporate structure and positive working capital position.  The primary financial covenants are as follows:

• Fixed charge coverage ratio – Adjusted EBITDA (defined as gross EBITDA minus non-controlling interest share of gross EBITDA) divided by fixed charges (defined as being reduced by a percentage of cash on hand) must exceed 1.10;
• Total debt to EBITDA – Total debt (defined to exclude the $50 million debenture which will be outstanding with Fairfax Financial upon completion of this previously disclosed financing) divided by gross EBITDA must not exceed 3.00;
• Net funded debt to Adjusted EBITDA – Total debt (minus cash on hand) divided by Adjusted EBITDA must not exceed 2.00; and
• Net funded debt to EBITDA at subsidiaries level – individual subsidiaries must not exceed 1.00 and subsidiaries in aggregate must not exceed 0.50.

"This credit facility will increase the flexibility of Mosaic in making acquisitions while maintaining our strong balance sheet," commented Mark Gardhouse, CEO.  Mr. Gardhouse added "This facility forms an important part of the capital resources we need to have in place to execute on acquisition opportunities as they arise."

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is a Canadian investment company that owns a portfolio of established businesses which span a diverse range of industries and geographies. Mosaic's strategy is to create long-term value for its shareholders through accretive acquisitions, long-term portfolio ownership, sustained cash flows and organic portfolio growth. Mosaic achieves its objectives by maintaining financial discipline, acquiring businesses at attractive valuations, performing extensive acquisition due diligence, utilizing optimal transaction structuring and working closely with subsidiary businesses after acquisition.

FORWARD-LOOKING INFORMATION

This news release may contain forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as "forward-looking statements") that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this news release which are not statements of historical fact may be forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements. In particular, forward-looking statements in this news release include, but are not limited to: statements with respect to the terms of the Facility, the completion of the previously disclosed Fairfax Financial financing and management's views on the benefits and utilization of the Facility. 

Such statements or information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties. Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur.

By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions and other forward-looking statements will not occur. Some of the assumptions made by Mosaic, upon which such forward-looking statements are based include, but are not limited to: availability of the Facility pursuant to its terms and the closing of the Fairfax Financial financing. A number of factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements, and a description of these factors can be found in Mosaic's annual information form for the year ended December 31, 2015, a copy of which is available under Mosaic's profile on SEDAR (www.sedar.com).

Should any of the risks or uncertainties facing Mosaic and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by any forward-looking statements contained in this news release.

Although Mosaic believes that the expectations represented by any forward-looking statements contained herein are reasonable based on the information available to it on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this news release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.

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

SOURCE MOSAIC CAPITAL CORPORATION

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Allan Fowler, CA, Chief Financial Officer, Mosaic Capital Corporation, 400, 2424 - 4th Street SW, Calgary, AB T2S 2T4, T: [phone], E: [email protected]