Metalla Royalty & Streaming Ltd (TSX-V:MTA) announced on Friday that it has agreed to acquire Nova Royalty Corp in an all-stock transaction valued at C$190 million.
Nova Royalty shareholders will receive 0.36 of a Metalla common share for each Nova share held, implying a premium of 25% based on the closing share prices of Nova on September 7, 2023, Metalla Royalty stated.
"This merger represents a transformative moment for both companies and will lay a clear, low-risk path to becoming an intermediate royalty company," Metalla Royalty & Streaming CEO Brett Heath said in a statement.
The combined company will own a portfolio of 105 royalties and streams being advanced by operators including First Quantum Minerals (TSX:FQM), Newmont, and Barrick.
Metalla also reported that it has formed a strategic partnership with company insider Beedie Capital, which will make an equity investment of C$15 million and increase Metalla's existing convertible loan facility to C$50 million, for a total of C$65 million, resulting in about $35 million of available liquidity, better positioning the combined company to fund value-enhancing growth.
The C$15 million equity placement will consist of 2.8 million subscription receipts, at a price of C$5.29 per receipt, which will result in Beedie beneficially owning about 9.7% of the issued and outstanding common shares of the combined company on a non-diluted basis.
Shares of Nova Royalty climbed 8% to $1.64 in early Friday trading, while Metalla Royalty stock fell 10% to $4.78.
Contact Sean at sean@proactiveinvestors.com