14714750 Canada Inc. entered into a definitive agreement to acquire Velan Inc. (TSX:VLN) from Velan Holding Co. Ltd., Kernwood Limited and others for approximately CAD 280 million on February 9, 2023. As reported, Flowserve will pay CAD 13 in cash for each common shares of Velan. Flowserve will acquire Velan in an all-cash transaction valued at approximately CAD 329 million, including the purchase of all of the issued and outstanding Velan equity for approximately CAD 281 million and the assumption of approximately CAD 48.9 million in outstanding gross debt as of November 30, 2022. Flowserve will also assume Velan?s CAD 42.2 million of cash and cash equivalents, also as of November 30, 2022. Following closing of the transaction, Flowserve expects to maintain a significant presence in Québec, including Velan?s Montreal, Québec head office and the combined company will continue to maintain a significant global presence. Upon completion of the transaction, Velan will become part of Flowserve?s Flow Control Division (FCD) segment. In case of termination, Velan shall pay to Flowserve CAD 12.82 million of termination fee.

The transaction is subject to the satisfaction of customary closing conditions, including applicable court and regulatory approvals, including one from France, Dissent Rights have not been exercised with respect to more than 10% of the Shares and the approval of at least 662/3% of the votes cast by Velan shareholders. The transaction is not subject to any financing conditions. A shareholder meeting of Velan is scheduled on May 5, 2023. The transaction follows the unanimous recommendation of Velan?s Special Committee of the Board of Directors to approve the merger. As of May 5, 2023, shareholders of Velan Inc. have approved the transaction. The transaction is expected to close by the end of the second quarter of 2023. As of May 1, 2023, acquisition is expected to close early in the third quarter of 2023. The Court hearing for the final order to approve the Arrangement is expected to take place on May 16, 2023 and the completion of the Arrangement is now expected to occur in the third quarter of 2023 (calendar year). As of May 16, 2023, Superior Court of Québec has issued a final order approving the previously announced plan of arrangement. As of August 31, 2023, the companies have extended the outside date to obtain regulatory approvals for the transaction completion to October 7, 2023. As of October 5, 2023, Flowserve sent a notice to Velan indicating its intention to terminate the agreement following the occurrence of outside date of October 7, 2023, considering that the regulatory approval from France has not and will not be obtained. The transaction is expected to be accretive to Flowserve?s adjusted EPS in the first full year following close.

Citi acted as financial advisor and John Quattrocchi, David Palumbo and Nancy Hamzo of Baker McKenzie acted as legal advisor to Flowserve. BMO Capital Markets acted as financial advisor and Sébastien Roy, Alyssa Wiseman, Andrew Coffey (Corporate/M&A), Michael Kandev (Tax), Mark Katz (Competition), and Faiz Lalani (Dispute Resolution) of Davies Ward Phillips & Vineberg LLP acted as legal advisor to Velan. Stephen J. Kelly and Laurence Cromp-Lapierre of Norton Rose Fulbright Canada LLP acted as legal advisor to the Special Committee and Patrick Boucher, Christian Meighen, Hadrien Montagne, Fred Purkey and Sarah Woods of McCarthy Tetrault LLP acted as legal advisor to Velan Holding. BMO Capital Markets and Richter LLP acted as fairness opinion providers to the Special Committee and the Board of Velan. Laurel Hill Advisory Group, LLC acted as information agent with a service fee of CAD 75,000 and TSX Trust Company acted as depository bank also transfer agent to Velan.

14714750 Canada Inc. cancelled the acquisition of Velan Inc. (TSX:VLN) from Velan Holding Co. Ltd., Kernwood Limited and others in October 2023. According to the terms of the agreement, no termination fee will be payable by either party.