Pathfinder Ventures Inc. is pleased to announce that on February 10, 2022, it entered into a Letter of Intent (LOI) with Black Sheep Income Corp. (BSIC), a private B.C. company with RV and self-storage assets, to acquire all of the shares of BSIC for a combination of Pathfinder shares and cash.
Upon completion of the acquisition, Mr. Mark O’Donoghue and Ms. Cathy Butler will join the Executive Management team and Ms. Butler, the Board of Directors.
Under the terms of the LOI, Pathfinder will acquire a 100% interest in BSIC, which wholly owns and operates one stabilized RV & self-storage business located in Penticton and one operating self-storage site with re-development potential in Nanaimo, B.C.
Pathfinder will also acquire the contracts from BSIC to purchase two existing RV parks and campgrounds, one located in Columbia Valley along the Kooteney River of B.C. and the other along the North Saskatchewan River in the foothills of the Rocky Mountains of Alberta.
The options to acquire additional RV resorts and campgrounds substantially increase the corporation’s pipeline of projects and could represent Pathfinder Camp Resorts’ expansion into Alberta, Canada.
Pathfinder shall acquire all the outstanding shares of BSIC for an aggregate purchase price of approximately $4.5 million, to be satisfied by way of 20% by payment in cash and the remaining proportion of 80% by issuance of Pathfinder common shares (the “Consideration Shares”) at an agreed deemed price of $0.20 per Pathfinder common share.
Subsequently, twenty percent (20%) of the Consideration Shares (the “Escrow Shares”) shall be subject to escrow until July 15, 2023 (the “Escrow Period”). In the event that the Pathfinder common shares trade or close on the Exchange at a price of $0.25 or more for 10 consecutive trading days (the “Escrow Trigger”) on or before the last day of the Escrow Period, the Escrow Shares will be returned to treasury and canceled. In the event that the Escrow Trigger has not occurred on or before the last day of the Escrow Period, the Escrow Shares shall be released to the registered holders thereof. If the escrow cancellation is triggered and the common shares are returned to Pathfinder, the effective price per Consideration Share would be $0.25. BSIC also has $800,000 in convertible debentures outstanding which will be assumed by Pathfinder and become convertible with terms to be negotiated in the definitive agreement.
Joe Bleackley, Founder and CEO commented: “We are very excited to execute on our business strategy to expand into the RV and self-storage business, add RV resort and campground locations to our pipeline, and have two senior executives join the Pathfinder team. The continued growth in RV sales and outdoor recreation has led to an increase in demand for RV & boat storage locations, and high-density development planned in our target locations are contributing to demand for self-storage. We are really looking forward to the financial management and operational expertise that Mark and Cathy offer the Pathfinder team and we look forward to this additional leadership to continue to fuel the growth of Pathfinder Ventures.
Executive Management and Board of Directors Strengthened
The founders and management of BSIC, Cathy Butler, CFA, and Mark O’Donoghue, CPA, CA, will join the Pathfinder executive team as Chief Investment Officer and Chief Financial Officer respectively, and Cathy Butler will be appointed to Pathfinder’s Board of Directors.
Mark O’Donoghue, CPA, CA: Chief Financial Offer
Co-founder, President and CFO of Black Sheep Income Corp., Mark acts as Trustee, Director and CEO of the Azcan US Residential Real Estate Trust which invests in a unique niche in Georgia real estate. Mark was the President and CFO of Azcan RPG Corp, which acquired Arizona real estate after the housing crash in 2009 then, renovated and sold over 350 properties in the US. Mark’s responsibilities included the capital raises, financial reporting and business strategy. Earlier in his career, Mark was the co-founder, CEO and CFO of an Investment Advisory Firm in the Turks and Caicos Islands with over $300 million in assets under administration. Following that Mark also excelled as a Business and Leadership Coach consulting to entrepreneurial clients and large corporate executive clients including NAL Resources and Nexen Inc.
Cathy Butler, CFA: Chief Investment Officer and Board Member
Co-founder of Black Sheep Income Corp, Cathy acquired land, developed & operated storage facilities in her career that ranged from a $34 million un-developed storage portfolio including sites in Windermere and Sherwood Park, that sold to Real Storage (now Storage Vault), a 9-acre greenfield development that sold to Storage Vault, a 5-acre greenfield development that sold to Real Storage (now Storage Vault), and a site in Okotoks and Calgary that she sold to StorageMart. Cathy is also the co-founder of Beltline Brownstones Inc. which owns & operates multi-family properties, and earlier in her career Cathy founded Natural Borders Reforestation, which grew to merge with New Forest Contractors, later acquired by Fairfax Financial. Cathy has been registered as an Alberta Securities Commission portfolio manager and has held private equity research analyst and business development positions with The Blackstone Group, Avenir Capital, and Wilmington Capital.
Darren Prins, CPA CA, plans to resign as the Chief Financial Officer for the Corporation upon closing of the acquisition.”It’s been a pleasure working with the entire team since the founding of the company, going through the RTO process, and building the foundation of the financial reporting department. With the growth trajectory ahead, it’s great to see Pathfinder having reached the stage of needing a full-time CFO.” says Darren Prins.
Black Sheep Income Corp Asset Highlights
- Penticton RV & Self-Storage Site
BSIC acquired the Penticton site in 2020 and has operated it since, consistently improving revenues and net operating income from its initial run rate at acquisition. BSIC was attracted to the specialized container-based storage model due to the reduced capital cost versus traditional storage and the flexibility the containers provide in that they can be deconstructed, flat packed and shipped to different sites allowing BSIC to maximize flexibility for both demand among its sites and management of the land. BSIC owns the 1.86 acres of industrial zoned land the facility operates from.
- Nanaimo, B.C. RV and Self-Storage Site
In 2021 BSIC acquired the operating RV and self-storage location in Nanaimo and plans to develop and intensify the operations. The property is 2.4 acres of industrial zoned land along the Trans-Canada Highway in the South end of Nanaimo, poised to benefit from the expansion of the Duke Point shipping terminal and the significant residential expansion in the area.
Closing of the Transaction
The completion of the acquisition remains subject to the satisfaction of condition precedents, including but not limited to the receipt of Exchange approval and of any other required regulatory, shareholder, and third-party approvals. There are no finder’s fees to be paid in connection with closing the transaction, and the acquisition is an Arm’s Length Transaction under the policies of the TSX Venture Exchange.
About Pathfinder Ventures
Pathfinder Ventures Inc. is developing a network of premier branded, upscale and family-friendly RV parks and campgrounds under the “Pathfinder Camp Resorts” name. Pathfinder currently has three camp resorts located in B.C. and is focused on growing its network through both acquisitions and new construction. The Corporation is taking advantage of the rapidly growing market of Canadians who want to experience the great outdoors in an RV.