Founders Advantage Capital Corp. Announces Fourth Acquisition – Signs Letter of Intent to Acquire a 50% Interest in Astley Gilbert Limited

Calgary, Alberta – October 16, 2017 – Founders Advantage Capital Corp. (TSX-V: FCF) (the “Corporation” or “FA Capital”) is pleased to announce that it has entered into a letter of intent to acquire a 50% interest (the “Transaction”) in Astley Gilbert Limited (“Astley Gilbert” or “AG”) for $24.7 million (the “Purchase Price”), subject to customary post-closing adjustments.  The Purchase Price will be funded through a combination of cash and vendor take back financing.  After completion of the Transaction, the current owners of Astley Gilbert, being Wayne Wilbur, Ari Yakobson and Rino Dambrosio (the “AG Team”), will collectively retain a 50% interest in Astley Gilbert and will continue to manage the day-to-day operations.  Completion of the Transaction is subject to a number of conditions and is expected to close on or about October 31, 2017.

Astley Gilbert, founded in 1970, has 13 locations across Ontario offering non-traditional digital printing and imaging solutions to over 6,000 active customers in a wide range of industries.  Astley Gilbert has the largest market share for architectural, engineering and construction (“AEC”) reproductive printing in Ontario, offering its customers same day AEC imaging in addition to online project management tools and onsite managed print services.  Astley Gilbert’s clients include some of the largest AEC firms in Ontario and Astley Gilbert’s solutions are used in key infrastructure projects across Ontario.  From airports to transit lines to commercial buildings, Astley Gilbert is the leading provider of drawings to all industry participants.

In addition to its AEC solutions, Astley Gilbert provides digital print services, high-end brochures, variable data printing, large format graphic displays, online data storage and management solutions, warehousing and logistics and vehicle wraps.  Astley Gilbert’s customers include some of the largest retailers and product manufacturers in the country, which entities require various imaging services including in-store displays, signage and marketing materials.  While technology in general has adversely impacted the traditional print business, technology has positively impacted imaging hardware and reduced the cost to create products in addition to improving the ways in which entities market their products.  Astley Gilbert embraces technology and industry changes to drive growth, profitability and productivity.  In recent years, AG has enjoyed significant growth and has become a consolidator in the industry. More information about Astley Gilbert can be found at www.astleygilbert.com.

Stephen Reid, Chief Executive Officer of the Corporation commented: “We are proud to announce our proposed partnership with Astley Gilbert as our fourth investment.  Astley Gilbert is an industry leader in non-traditional digital imaging.  We pursued Astley Gilbert for a long time as Wayne, his team and his company are a perfect fit for FA Capital.  We love that the AG Team wanted to retain a 50% interest in the company that they are so passionate about, and that they chose us as their partner.  We believe that Astley Gilbert is an extremely well-managed company and a great acquisition platform.  FA Capital will lend all necessary resources to continue, and accelerate, AG’s growth. Lastly, this new investment will provide our portfolio with further geographic and sectoral diversification.”

Wayne Wilbur, President and CEO of Astley Gilbert, commented: “Astley Gilbert isn’t just a company to us, it’s our life’s work.  We’ve been able to adapt, evolve and lead over the last 47 years as industry and technology has changed and today Astley Gilbert boasts some of the best imaging technology in the business.  We embrace technology changes and advancements as technology continues to allow us to improve our service offerings to our customers and makes us more integral to their business.  While Astley Gilbert was not “for sale”, we found the FA Capital model compelling for the next chapter of our growth and believe that Stephen and his team are truly unique partners.  We anticipate this partnership will accelerate our growth by providing access to capital and consolidation expertise.”

The Transaction has been structured to provide the Corporation with 50% of after-tax annual cash distributions up to $6.7 million (the “Annual Threshold”) paid by Astley Gilbert to its securityholders, with the AG Team receiving the other 50% of annual distributions up to such Annual Threshold.  The Annual Threshold was set based on AG’s approximate TTM EBITDA less an amount for corporate taxes.  In the event AG is reorganized into a limited partnership, the Transaction contemplates that the Annual Threshold will increase to $9.0 million.  All cash distributions by Astley Gilbert to its securityholders will be subject to Board approval and may be adjusted from time to time to pursue expansion or capital initiatives or other corporate purposes.  To the extent that any cash distributions paid in a year are in excess of the Annual Threshold, the AG Team will receive 60% of such excess distributions, with the Corporation receiving 40% of such excess distributions.  In addition, with respect to any liquidity event, the net proceeds of disposition will be allocated amongst the Corporation and the AG Team based upon their security holdings and adjusted for certain growth in cash distributions received as at the date of the liquidity event.

Following closing of the Transaction, the board of directors of Astley Gilbert will consist of Wayne Wilbur, Ari Yakobson and three nominees of the Corporation.  The Transaction will not be a “significant acquisition” for the Corporation as defined by applicable securities laws.

The Corporation intends to fund the Transaction with available cash on hand from its credit facility.

About Astley Gilbert Limited

Founded in early 1970, Astley Gilbert has grown from a small company serving the on-demand document needs of the construction industry to a full-service print and imaging solutions provider to companies across a wide range of industries. The company expanded by adding more branches, more equipment and more expertise, all of which are supported by strong operational capabilities and a company-wide culture that focuses on customer satisfaction and doing whatever it takes to meet their needs.

For the last three decades, Wayne Wilbur, President & CEO, has helped to shape Astley Gilbert into what it is today.  Astley Gilbert has the highest market share in Canada for AEC reprographic (blueprint) services, as well as a strong and growing position for digital and offset print solutions offering high-end brochures, variable data printing and large format graphic displays, including outdoor signage.

Astley Gilbert’s product and service diversity is expected to continue to expand in both value-add print solutions as well as non-print services. With multiple production facilities, over 70 radio-dispatched customer service vehicles across Ontario and global delivery capabilities, Astley Gilbert has become a leader in delivering on-demand solutions, on paper and online.

About Founders Advantage Capital Corp.

The Corporation is listed on the TSX Venture Exchange as an Investment Issuer (Tier 1) and employs a long-term investment approach. The Corporation has developed an investment approach to create long-term value for its shareholders and partner entrepreneurs (investees) by pursuing controlling interest acquisitions of cash flow positive, premium middle-market privately-held entities. The Corporation seeks to win mandates by appealing to the segment of the market which is not aligned with traditional private equity control, royalty monetizations or related structures. The Corporation’s innovative platform offers incentives (contractually) for growth in favour of its partner entrepreneurs. This unique platform is designed to appeal to entrepreneurs who believe in the growth of their businesses and who want the added ability to continue to manage the business with a long-term partner.

The Corporation’s common shares are listed on the TSX Venture Exchange under the symbol “FCF”.

For further information please refer to the Corporation’s website at www.advantagecapital.ca.

Contact information for the Corporation is as follows:

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Cautionary Statement Regarding Forward-Looking Information

Certain statements in this news release constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “estimate”, “will”, “expect”, “plan”, “schedule”, “intend”, “propose”, or similar words suggesting future outcomes or an outlook. Forward-looking information in this news release includes, but is not limited to:

• completion of the Transaction on the terms set out herein;
• timing of closing of the Transaction;
• the Corporation funding the Transaction with cash on hand from its credit facility;
• the expectation that Astley Gilbert’s growth will accelerate a result of the Transaction; and
• the return on investment for the Corporation.

Such forward-looking information is based on a number of assumptions which may prove to be incorrect. Assumptions have been made with respect to the following matters, in addition to any other assumptions identified in this news release:

• that the future performance of Astley Gilbert will be consistent with past performance;
• that all closing conditions will be satisfied or waived;
• that the Corporation’s lender will approve the Transaction; and
• that the parties will be able to successfully negotiate the definite agreements.

Although the Corporation believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on them as the Corporation can give no assurance that such expectations will prove to be correct. Forward-looking information is based on expectations, estimates and projections that involve a number of known and unknown risks and uncertainties which could cause actual results to differ materially from those anticipated by the Corporation and described in the forward-looking information. The material risks and uncertainties include, but are not limited to:

• the failure to obtain necessary approvals and consents to complete the Transaction;
• the satisfaction or waiver of all closing conditions;
• the Transaction will not yield the anticipated benefits to the Corporation; and
• the risks and uncertainties applicable to the operation of Astley Gilbert’s business generally.

The foregoing list of risks is not exhaustive. For more information relating to risks, see the section titled “Risk Factors” in the Corporation’s current annual information form. The forward-looking information contained in this news release is made as of the date hereof and, except as required by applicable securities law, the Corporation undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.