Rocky Mountain Dealerships Inc. has announced the expiration of the 35?day go?shop period provided for in the arrangement agreement dated Nov. 1, 2020, between RME and AcquireCo, pursuant to which AcquireCo will acquire all of the issued and outstanding common shares of RME  held by RME shareholders, other than certain shares held by interested parties, in exchange for $7.00 in cash for each such RME Share.

No Superior Offer Submitted

During the Go‐Shop Period, RME and its representatives actively solicited, encouraged and initiated discussions with third parties that expressed an interest in acquiring RME, which resulted in a broad market check to ensure that value is maximized for RME Shareholders. RBC Capital Markets (“RBC”), RME’s financial advisor, contacted 49 parties, including both strategic and financial buyers. Of the parties contacted, six entered into confidentiality agreements with RME and were granted access to non‐public information about RME, including the Company’s business plan and financial forecast. RME did not receive any acquisition proposal during the Go‐Shop Period.

Board Recommendation

Following the conclusion of the Go‐Shop Period, the board of directors of RME, at the request of AcquireCo, is reconfirming its prior recommendation that RME Shareholders vote FOR the Proposed Transaction at the special meeting of RME Shareholders to be conducted virtually on Dec. 17, 2020. The Board also reaffirms its conclusions that the Cash Consideration is fair, from a financial point of view, to the RME Shareholders (except for the interested parties as it relates to RME Shares owned or controlled by them) and that the Arrangement and the entering into of the Arrangement Agreement are in the best interests of RME.

Reasons to Support the Transaction

• Compelling Value Proposition and Attractive Premium: The Cash Consideration represents an attractive 27% premium to the Company’s share price prior to the announcement of the Proposed Transaction.

• Certainty of Value and Liquidity: The Proposed Transaction represents a unique opportunity for RME Shareholders to immediately monetize their investment in historically illiquid RME Shares for cash at significant premium.

• Supported by Fairness Opinions and Independent Valuation: Each of the RBC fairness opinion (as at November 1, 2020) and the Deloitte LLP (“Deloitte”) fairness opinion (as at November 1, 2020) provides that, subject to the assumptions, limitations and qualifications contained in such fairness opinion, the Cash Consideration to be received by the RME Shareholders (except for certain shares held by interested parties) pursuant to the Arrangement is fair, from a financial point of view, to such RME Shareholders. In addition, Deloitte was engaged on a fixed‐fee basis to provide an independent formal valuation of the RME Shares pursuant to Multilateral Instrument 61‐101, and determined that the fair market value of the RME Shares is in a range of $6.85 to $7.90 per RME Share.

• Significant Risk if the Proposed Transaction is not Completed:There are a number of material risks to which RME is subject to relating to the Arrangement not being completed, including the following:

  1. the price of the RME Shares may decline from the current market price which generally reflects a market assumption that the Arrangement will be completed, particularly as event‐ driven and other non‐fundamental holders of RME Shares liquidate their positions;
  2. trading in the RME Shares is likely to remain relatively illiquid;
  3. certain costs related to the Arrangement, such as legal, accounting, financial advisory, as well as, in certain limited circumstances, as set out in the Arrangement Agreement, the Break Fee may be payable by RME if the Arrangement is not completed; and
  4. RME will continue to be subject to various risks related to its ongoing business. Considering the current market conditions, if the Company continues as a public corporation there is a risk that, over time, the Company may have higher costs generally than many of its non‐public competitors as well as higher debt and continued limited access to capital on a cost‐ competitive basis, which may adversely impact the Company’s growth plans.