Western Investment Company Of Canada Limited · TSXV:WI
Western Investment Company Of Canada — The Western Investment Company of Canada — Merger or Acquisition (March 2024)
25 slides from Western Investment Company Of Canada's merger presentation, March 2024
Slide 1: Bringing Two Proven Teams Together
Bringing Two Proven Teams Together To Tr a n s f o r m We s t e r n i n t o a n Insurance and Investments Holding Company 1
Slide 2: Cautionary Statements
This presentation contains non-IFRS measures and forward-looking statements, including a discussion of Western’s business plans, targets, expectations, and outlook. Readers are cautioned not to place undue reliance on these forward-looking statements since a number of factors could cause actual resu
Slide 3: Today’s Speakers
Today’s Speakers S C O T T TA N N A S President and CEO of Western Investment Company of Canada Limited (“Western”) • Founded Western Financial Group in 1993 and served as CEO until 2014 • Proven leader with 30 years of insurance experience • Senator, Senate of Canada, since 2013 PA U L R I V E T T
Slide 4: Transformational Transaction
Transformational Transaction $20 million • Transform Western from private equity investing to insurance-related acquisitions and long-term value-based investing. Minimum Investment by Tevir into Western with up to • Build prudent insurance underwriting $30 million company. Decentralized acquisitions
Slide 5: Key Terms of Proposed Transaction
Western Tevir Shareholders Investment in Western $20 million Multiple Voting Shares issued (“MVS”) - 10 votes/share 50,000,000 Single Voting Common Shares (“SVS”) – 1 vote/share 30,207,756 Key Terms SVS to MVS conversion rights 1:1 of Proposed Rights to be issued to Western shareholders 2.5 shares @
Slide 6: Strong Protections for Western’s Shareholders
Dual class share structure modeled on the Canadian Coalition for Good Governance Dual Class Share Policy Western shareholders may, at their discretion, convert their SVS shares into MVS shares on a one for one basis. Strong Protections MVS shares will be restricted from sale without 6 months'
Slide 7: Western’s Current Investments
Western’s Current Investments $25.3 million combined estimated market value A Western Canadian licensed insurance An automative glass repair and Manages a portfolio of seven retirement company primarily focused on property replacement company with 12 retail A producer and distributer of high-quality
Slide 8: Maximizing Shareholder Value
Western’s management team is focused on MAXIMIZING $0.67 Net Asset Value / Share1 SHAREHOLDER VALUE The proposed transaction aligns with this goal and enables the Company to unlock greater value from its diverse portfolio of investments 0.71x Share Price : Net Asset Value2 1. As at September 30, 202
Slide 9: Fortress is a licensed insurance company primarily focused on property insurance
Fortress is a licensed insurance company primarily focused on property insurance but also offering niche products. Fortress operates across Western Canada and recently entered the Ontario marketplace. • Property • Liability Licenses: • Ancillary classes including Boiler and Machinery, Marine, Fideli
Slide 10: Fortress Insurance’s Gross Written Premium Growth Has Surpassed All Expectations
Fortress Insurance’s Gross Written Premium Growth Has SURPASSED ALL EXPECTATIONS $21.6M $17.7M 254% Compound Annual Growth Rate1 626% Minimum Capital Test2 (Capital available /Minimum capital required) $5.4M 75% $1.8M $0.4M Combined Ratio2 (Incurred losses + Expenses)/Earned premiums 2019 2020 2021
Slide 11: Ontario Expansion
Ontario Expansion • Double the size of addressable market with expansion into Ontario Growing the Fortress Platform to Partner with Managing General Agents (“MGA”) • Increase capacity by investing resources into partnering with MGAs (who are vested with underwriting authority) and program $100 milli
Slide 12: Insurance Opportunities Outside Fortress
Insurance Opportunities Outside Fortress 100’s of Unique Merger and Acquisition Opportunities Throughout the Canadian Insurance Marketplace Brokers Aggregators Distributors Managing General Agents Capacity Providers P&C Insurance Small Insurers Customers Captives Reinsurers 12
Slide 13: Multiple voting shares provide time for Western to build scale while protected
Multiple voting shares provide time for Western to build scale while protected $500M1 from opportunistic acquirers At approximately $500 million in capital, common shareholders get control back Other than multiple votes and being non- trading, multiple voting shares are the same in every respect to
Slide 14: Canadian Property and Casualty Insurance Market
Canadian Property and Casualty Insurance Market Bigger Fish Eating Smaller Fish 16 Big Fish 7 Medium Fish (6 are protected) 109 Small Fish >$1.5 Billion $1.5B - $500M <$500 million in premiums written per year in premiums written per year in premiums written per year 75% market share 5% market share
Slide 15: Western Financial Group – An Illustrative Tale
Western Financial Group – An Illustrative Tale Anytime a small fish grows into an unprotected medium fish, it gets gobbled up by a large fish before value is realized Renamed Western Unsolicited third party $1M Financial Group bid leads to early sale to $825M Desjardins 1993 1998 2001 2011 2017 Thro
Slide 16: Transforming Western
Transforming Western Moving from pure private equity to an insurance and investments holding company Company Ownership • dsf Insurance Company 28.3% 51% Owned 55.3% Float 49.5% >$45 million to deploy Investment Company X Management Company Y 25-30% Company Z 16
Slide 17: Insurance and Investments Holding Company
Insurance and Investments Holding Company Permanent Capital, Float, and Long-term Disciplined Investing for Outsized Returns • dsf • Consolidate Fortress and expand footprint to Ontario • Build and acquire low-cost insurance and re-insurance Insurance Western assets and grow float Company • Incentiv
Slide 18: Vehicle to capture value investing opportunities
Vehicle to capture Canadian Inflation and Unemployment Trends value investing 12 10 opportunities 8 (%) 6 Since 1960 there are limited precedents for sizable central-bank-induced disinflation 4 that does not entail economic stress or a recession… 2 0 …have historically led to increased 1960 1965 197
Slide 19: Growth Platform in Canadian Insurance
Company Ticker Market Cap ($B)1 Price: Book2 IFC $39.0 2.5x Growth Platform in Canadian Insurance FFH $35.5 1.0x Currently only four publicly traded Canadian Property & Casualty (“P&C”) insurance DFY $5.1 1.6x companies. Public markets would benefit from a growth platform in Canadian insurance. TSU
Slide 20: Combined Proven Experience
S C O T T TA N N A S – C H A I R M A N • Founded Western Financial Group in 1993 • Served as Western Financial Group’s CEO until 2014 • Proven leader with 30-years of insurance experience Senator, Senate of Canada, since 2013 Combined • Proven Experience PA U L R I V E T T - C E O • Joined Fairfax i
Slide 21: Transaction is Designed to Maximize Value for all Shareholders
Transaction is Designed to Maximize Value for all Shareholders Proven Team Capital Foundation with successful track record to scale the insurance and investments platform Proven Platform Long-term Stability for insurance and investments and protection from opportunistic acquisitions 21
Slide 22: Bringing Two Proven Teams Together
Bringing Two Proven Teams Together To t r a n s f o r m We s t e r n i n t o a n Insurance and Investments Holding Company 22
Slide 23: Advisories
Advisories This presentation (the "Presentation") has been prepared by the management of The Western Investment Company of Canada Limited ("Western" or "WIC") for informational purposes only based on public information and from Western's confidential and proprietary materials, and may contain certai
Slide 24: Advisories (cont’d)
Advisories (cont’d) The definitive terms of any Rights Offering, including the proposed record date, will be set forth in a subsequent news release. The Rights Offering (including the subscription price and any listing of the Rights on the TSXV) is subject to applicable regulatory approval, includin
Slide 25: Advisories (cont’d)
Advisories (cont’d) Additional Assumptions Slide 4 – The proceeds received from the Rights Offering is dependent on the participation level by current shareholders in the Rights Offering. The Rights Offering is subject to numerous conditions, including TSXV approval. See "Regulatory Approvals" above
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