Merus Signs Definitive Acquisition Agreement With Dacha

(RTTNews) - Merus Labs International Inc. (MSL.TO, MSLI) said Friday that it has entered into a definitive acquisition agreement with Dacha Strategic Metals Inc. (DSM.V) pursuant to which Dacha will complete the balance of the previously announced investment of at least $11 million in Merus.

As contemplated by the letter agreement between Dacha and Merus which was announced on June 10, the acquisition agreement provides that Merus will acquire from Dacha, in exchange for common shares of Merus, a new subsidiary to be incorporated by Dacha and to which Dacha will contribute a minimum of $6 million cash by way of equity subscriptions.

The number of Merus Shares that Dacha will receive in exchange for Newco will equal Newco's cash on hand at closing divided by $1.70. Upon closing of the deal, Merus will pay to Dacha a transaction fee, payable in the common shares of Merus based on a price of $1.70 per share, equal to 3.5% of the aggregate value of the Merus Shares exchanged for Newco.

Dacha purchased $5 million of Merus Shares at a price of $1.70 per share as part of the Merus bought deal financing completed on June 19. Therefore, upon completion of the transactions contemplated by the acquisition agreement, it is expected that Dacha will have acquired a total of at least $11 million of Merus Shares at a price of $1.70 per share.

Completion of the deal is conditional upon the conditions to closing set forth in the acquisition agreement, which include receipt of all necessary stock exchange approvals, receipt of Dacha shareholder approval and no material adverse change with respect to Merus or Dacha. If the transaction has not been completed by August 31, either party may terminate the acquisition agreement.

Dacha will be seeking shareholder approval for the sale of Newco to Merus at Dacha's annual and special meeting of shareholders on August 11. Certain Dacha shareholders have agreed that they will vote their Dacha common shares in favour of the sale of Newco at the meeting.