Clarke Inc. announced it has entered into an arrangement agreement to acquire Ravelin Properties REIT in a transaction valued at approximately $1.1 billion, including debt. The combined pro forma entity is expected to have a total value of about $1.7 billion.
The transaction will be completed through a court-approved plan of arrangement and includes the acquisition of all outstanding REIT units and multiple series of convertible unsecured subordinated debentures issued by Ravelin.
Under the terms of the agreement, Ravelin unitholders will receive approximately 0.582 common shares of Clarke for every 1,000 units held. Debentureholders will receive about 14.562 Clarke shares for each $1,000 principal amount of debentures, with early consenting debentureholders eligible for a pro rata allocation of an additional 150,000 Clarke shares. Based on Clarke’s share price, the consideration represents a premium of 93% to the 20-day volume-weighted average trading price of the debentures and a 171% premium to the prior closing price on the Toronto Stock Exchange.
The transaction follows a strategic review process undertaken by Ravelin’s special committee to address ongoing financial challenges, including existing debt defaults and capital requirements. The deal is positioned as a recapitalization solution designed to stabilize the REIT while providing stakeholders with liquidity and continued exposure to the underlying portfolio.
Clarke expects to issue approximately 2.5 million shares as part of the transaction, representing about 19.3% of its outstanding shares. Following completion, existing Clarke shareholders are expected to own roughly 83.8% of the combined company, with former Ravelin securityholders holding about 16.2%.
The transaction is expected to close in the second quarter of 2026, subject to customary conditions including court approval, Toronto Stock Exchange approval, and approvals from Ravelin unitholders and debentureholders.
In connection with the agreement, G2S2 Capital Inc. has agreed to extend the forbearance period on certain loans to June 1, 2026. If required approvals are not obtained, the REIT may pursue proceedings under the Companies’ Creditors Arrangement Act, under which alternative restructuring transactions could be implemented.
The REIT’s secured debt will remain unaffected and continue to be serviced in the ordinary course according to its terms.
KEY QUOTES:
“After considering with our external financial and legal advisors the strategic and viable financial alternatives available to Ravelin, the Board determined that this Transaction is in the best interests of Ravelin and its stakeholders given the current and go forward solvency and leverage challenges facing the REIT.”
Calvin Younger, Chair of the Board of Trustees, Ravelin Properties REIT
“The Transaction will be a great outcome for both companies. It gives Ravelin securityholders the benefit of Clarke’s strong, well-capitalized platform and provides an immediate solution for the capital and liquidity pressures facing the REIT. It will allow Ravelin’s management team to focus on what matters most, improving the portfolio’s performance, attracting new tenants, and restoring occupancy, rather than being distracted by liquidity and lender defaults. The acquisition will result in a company with diversified geographic exposure and scale, which will provide Clarke shareholders, new and existing, with significant upside and liquidity.”
Tom Casey, Chief Financial Officer, Clarke Inc.
