Endeavour Mining has agreed to acquire Semafo in a deal worth CAD 1.00 billion (USD 696.27 million) creating a top 15 global gold producer and the largest in West Africa with six operations and attractive growth pipeline.
The combined company is expected to have over 1.00 million ounces of gold production per year and the deal will strengthen its strategic position and enhance ability to manage risk.
Under the terms of the transaction, Semafo shareholders will be exchanged at a ratio of 0.14 Endeavour ordinary shares for each one held in the target.
The offer represents a premium of 27.2 per cent to the 20-day volume weighted average price of both companies for the period ended 20th March 2020 and a 54.7 per cent increase on the two group’s close on the same date.
Following completion, Endeavour will own 70.0 per cent of the combined business and Semafo shareholders will control 30.0 per cent on a fully-diluted in-the-money basis.
Closing is scheduled for the second quarter of 2020.
La Mancha has committed to invest USD 100.00 million in the pro-forma group to strengthen the merged company’s balance sheet of the combined entity and increase available liquidity.
The placement is subject to the green light from the Toronto Stock Exchange and other regulatory approvals.
Endeavour and Semafo will benefit from four cornerstone mines, with combined production of over 800,000 ounces per year and increased capital allocation efficiency due to its enhanced project and exploration pipeline.
On a pro-forma basis, the business will have a net debt to long-term-debt adjusted earnings before interest, taxes, depreciation and amortisation ratio of 0.7x and access to liquidity sources of USD 508.00 million, according to the most recent publicly available information.
Semafo posted revenues on gold sales of CAD 295.76 million in the year ended 31st December 2019, a significant increase from CAD 66.97 million in the previous 12 months.
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