The Westaim Corporation (WED) Business Combination summary

Deal rationale and strategic fit

• Strategic combination of Westaim, Arena Investors, and Ceres Life creates an integrated insurance and alternative asset management platform, leveraging CC Capital's investment and expertise to drive long-term value for shareholders.

• Ceres Life, launching in Q1 2025 as a cloud-native annuity provider, will benefit from advanced technology, no legacy liabilities, and strong distribution, targeting the U.S. life and annuities market.

• Arena gains access to stable insurance assets, supporting growth toward a potential $10 billion AUM.

• The integrated model creates a synergistic flywheel, with insurance assets fueling asset management growth and vice versa, compounding value for shareholders and policyholders.

• Long-term alignment and stewardship by CC Capital, including board representation and economic participation.

Financial terms and conditions

• CC Capital to invest USD $250 million at CAD $4.75/share, representing an 18.2% premium to the prior close and 25% premium to 180-day VWAP, acquiring approximately 71.9 million shares (36% ownership) and warrants for up to an additional 31.3 million shares (potentially 41% interest).

• Westaim's investable capital base will rise to approximately USD $700 million.

• About USD $600–620 million will be invested into a vehicle managed by CC Capital to acquire and capitalize Ceres Life.

• Westaim to increase Arena ownership to 100% and enter a profit share with Arena's management.

• Up to USD $100 million of common stock may be repurchased at CAD $5–5.25/share post-transaction.

Synergies and expected cost savings

• Arena to manage up to 90% of Ceres Life's assets, leveraging existing investment infrastructure and capabilities aligned to insurance needs.

• Ceres Life's tech-enabled, cloud-native platform is expected to drive operational efficiencies, improved margins, and rapid distribution.

• No legacy liabilities at Ceres Life enable efficient scaling and cost-effective operations.

• Enhanced distribution and technology at Ceres Life are expected to accelerate growth and scale.

• Annuity originations from Ceres Life drive assets to Arena, boosting returns and demand for annuity products.