Farmers Edge Provides an Update on Proposal from Fairfax and Enters into Letter of Intent

WINNIPEG, Manitoba – January 8, 2024 – Farmers Edge Inc. (“Farmers Edge” or the “Company”) (TSX: FDGE) today announced that it has received a revised non-binding proposal from its majority shareholder, Fairfax Financial Holdings Limited (“Fairfax”) under which Fairfax would acquire (the “Proposed Transaction”) all of the common shares (“Common Shares”) in the capital of the Company other than those Common Shares already owned by Fairfax or its affiliates, at a purchase price of $0.35 per Share (the “Revised Offer Price“), payable in cash (the “Revised Proposal”). The Revised Proposal, which was received following negotiations between Fairfax and the special committee of independent directors (the “Independent Committee“) of the board of directors of Farmers Edge (the “Board“), represents an increase of 40% to the previously proposed purchase price of $0.25 per Common Share provided for in the proposal from Fairfax announced on November 16, 2024 (the “Original Proposal“). Based on the unanimous recommendation of the Independent Committee, Farmers Edge has entered into a letter of intent with an affiliate of Fairfax in respect of the Proposed Transaction.

The Revised Offer Price represents a 218% premium to the closing price and to the 20-day volume weighted average price per share on the Toronto Stock Exchange, in each case, of approximately $0.11, as of the close of trading on November 15, 2023, being the trading day immediately before the Company received the Original Proposal.

The Board, having received the unanimous recommendation of the Independent Committee, determined (with R. William McFarland and Quinn McLean declaring their roles as directors or officers of Fairfax or an affiliate thereof and abstaining) that entering into the letter of intent is in the best interests of the Company. The letter of intent is not a definitive agreement with respect to the Proposed Transaction, and the Proposed Transaction remains subject to, among other things, (i) final approval of the Proposed Transaction by Fairfax, the Independent Committee and the Board, (ii) the negotiation and execution of a definitive agreement for the Proposed Transaction on terms satisfactory to the Company and Fairfax, and (iii) receipt of a Formal Valuation and Fairness Opinion from BMO (each as defined below) at the time the definitive agreement is entered into and such other conditions described below being satisfied.

The Independent Committee made its recommendation after carefully evaluating the financial terms of the Proposed Transaction and receiving advice from its independent financial and legal advisors. In connection with its review of the Proposed Transaction, the Independent Committee has retained BMO Capital Markets (“BMO“) to provide financial advice and prepare a formal valuation of the Common Shares (the “Formal Valuation“) as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), and provide an opinion that, subject to the assumptions, limitations and qualifications to be set forth in BMO’s written fairness opinion, the consideration to be received by the holders of Common Shares (other than Fairfax or its affiliates) pursuant to the Proposed Transaction is fair, from a financial point of view, to the holders of Common Shares (other than Fairfax or its affiliates) (the “Fairness Opinion”).

Transaction Details
Pursuant to the terms of the Proposed Transaction, Fairfax would acquire all of the Common Shares, other than those Common Shares owned by Fairfax or its affiliates, for a purchase price of $0.35 per Common Share, payable in cash. The Proposed Transaction would be financed by cash on hand of Fairfax or its affiliates and would not be subject to any financing condition.

The consummation of the Proposed Transaction will be subject to various conditions customary for transactions of this nature, including, among others, (i) receipt by the Company and Fairfax of any required regulatory, court and/or stock exchange approvals, and (ii) the approval of the Proposed Transaction at a special meeting of the shareholders of the Company entitled to vote on the Proposed Transaction (including a “majority of the minority” vote of the shareholders excluding for this purpose the votes of Shares held or controlled by Fairfax and any other persons described in items (a) through (d) of Section 8.1(2) of MI 61-101).

While the Board, after having received the unanimous recommendation of the Independent Committee, has determined to enter into the letter of intent with respect to the Proposed Transaction, neither the Independent Committee nor the Board has approved the Proposed Transaction. There can be no assurance that the Company and Fairfax will enter into a definitive agreement for the Proposed Transaction or that the Proposed Transaction will occur as proposed or at all. Neither the Company nor the Independent Committee expect to make further public comment regarding the matters contemplated herein until a definitive agreement for the Proposed Transaction is entered into or the Proposed Transaction is abandoned.

Forward Looking Information
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Forward-looking information in this news release, which includes, among other things, statements relating to the Proposed Transaction, is necessarily based on a number of opinions, estimates and assumptions that the Company considered appropriate and reasonable as of the date such statements are made in light of its experience, current conditions and expected future developments, including the assumption that the Proposed Transaction can be completed on acceptable terms and that any conditions precedent can be satisfied.

Risks and uncertainties related to the Proposed Transaction include, but are not limited to: failure of Farmers Edge and Fairfax to enter into a definitive agreement for the Proposed Transaction on terms satisfactory to Farmers Edge and Fairfax, or at all; failure of Farmers Edge and Fairfax to obtain the required shareholder and regulatory approvals for, or satisfy other conditions to effect, the Proposed Transaction; failure by BMO to deliver a Formal Valuation at the time the definitive agreement is entered into; failure by BMO to deliver a Fairness Opinion at the time the definitive agreement is entered into; the risk that the Proposed Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to or as a result of the completion of the Proposed Transaction, the business of Farmers Edge may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk that legal proceedings may be instituted against Farmers Edge or pending legal proceedings may be determined adversely to the interests of Farmers Edge; and risks related to the diversion of management’s attention from Farmers Edge’s ongoing business operations.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company’s expectations as of the date of this news release (or as the date they are otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. All of the forward-looking information contained in this news release is expressly qualified by the foregoing cautionary statements.

About Farmers Edge
Farmers Edge is a global leader in digital agriculture, revolutionizing the industry with a broad portfolio of proprietary technological innovations, spanning hardware, software, and services. Powered by a unique combination of connected field sensors, artificial intelligence, big data analytics, and agronomic expertise, the Company’s digital platform turns data into actions and intelligent insights, delivering value to all stakeholders of the agricultural ecosystem. Farmers Edge disruptive technologies accelerate digital adoption on the farm and beyond, protecting our global resources and ensuring sustainable food production for a rapidly growing population. For more information on Farmers Edge, please visit www.farmersedge.ca. Additional information relating to the Company, including all public filings, is available on SEDAR+ (www.sedarplus.ca).

Advisors
BMO Capital Markets is acting as financial advisor and independent valuator to the Independent Committee, Goodmans LLP is acting as independent legal advisor to the Independent Committee and McCarthy Tétrault LLP is acting as legal advisor to the Company.

Torys LLP is acting as legal advisor to Fairfax on the Proposed Transaction.

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