IsoEnergy To Acquire Consolidated Uranium In All-Stock Deal

M&A activity within the uranium sector appears to be heating up, with the announcement this morning that IsoEnergy (TSXV: ISO) will be acquiring Consolidated Uranium (TSXV: CUR) in a deal that will have a post-transaction value of approximately $903.5 million.

The transaction will see Consolidated Uranium shareholders receive 0.50 of a share of IsoEnergy for each share held. The figure implies a premium of roughly 26%, or $0.49 per share, based on yesterday’s closing prices of the two firms. Post-transaction, Consolidated Uranium shareholders are estimated to hold 29.5% of IsoEnergy.

The strategic rationale behind the transaction is focused around the rising value of uranium, with the company stating that it will provide near, medium, and longer term leverage to the price of uranium based on its suite of projects with “substantial current and historical resources.” The two companies also identify a “focused production strategy,” despite neither firm currently having assets in production.

Other arguments put forth include “outstanding leadership,” “global exploration potential,” and a “complimentary project base.” On the latter point, the two companies outline that Consolidated’s fully-permitted past producing assets in the US are ready for restart, which compliments IsoEnergy’s Athabasca asset, which has one of the world’s highest grade uranium resources at 48.6 million pounds at 34.5% average grade on an inferred basis.

In terms of leadership, the combined company will be led by Philip Williams in the CEO role, who comes from Consolidated. IsoEnergy CEO Tim Gabruch meanwhile will take on the role of President. The combined entity meanwhile will feature four IsoEnergy directors and two Consolidated Uranium directors, with Richard Patricio, a director of IsoEnergy and an advisor to Consolidated, appointed as Chair.

The transaction remains subject to Consolidated Uranium’s shareholders approving the deal, as well as standard regulatory approvals. A termination fee of $10.8 million is also in play should Consolidated walk away from the transaction.

A concurrent private placement for gross proceeds of $21.0 million is also to take place, consisting of subscription receipts priced at $4.50 per each. The financing is to be fulfilled by NexGen Energy, Mega Uranium, and Energy Fuels.

The merger is currently slated to close in the fourth quarter of 2023.

IsoEnergy last traded at $4.81 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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