DE:CC - Decisive Dividend Corporation Announces the Acquisition of ACR Heat Products Limited

(TheNewswire)

October 3, 2022 – TheNewswire - Kelowna, British Columbia: Decisive Dividend Corporation (TSXV:DE) (the “ Corporation ” or“ Decisive ”) is pleased to announce the acquisition of ACR HeatProducts Limited (the “Acquisition”) for $8.3 million. ACR HeatProducts Limited (“ACR”), located in Birmingham in the UnitedKingdom, manufactures EcoDesign Ready woodburning, multifuel, and gasstoves and sells them primarily in the United Kingdom . It also manufactures electric stoves,electric fireplaces and outdoor pizza ovens . The Acquisition represents the latest chapter inDecisive’s buy, build and hold business model, supporting growth andyield for the Corporation’s investors.

ACR was founded in 2004, has a well-established brandin the United Kingdom marketplace and is known for its high-qualityand attractively designed products. It distributes these products ataccessible price points that drive a strong value proposition for itscustomers. Given soaring energy prices throughout Europe, ACR’sproducts are an attractive choice for individuals looking forsupplementary heating sources for their homes. As a result, ACR isexperiencing robust demand for its products, similar to whatDecisive’s subsidiary Blaze King is experiencing in North America.Further, with its EcoDesign Ready models, ACR is well positioned for the transition tostronger emission standards being developed in the United Kingdom and across Europe .

The Acquisition is fully funded and is anticipated tobe immediately accretive to Decisive’s earnings. For the trailingtwelve-month period ended June 30, 2022, ACR generated $10.2 millionin sales, $1.9 million in net profit and $2.3 million in AdjustedEBITDA (1) . These figures represent a 13% increase relative to theCorporation’s reported sales and a 24% increase to its reportedAdjusted EBITDA (1) for the same period.

This Acquisition is the second completed by Decisive in2022 and the first add-on acquisition completed by Decisive in anindustry in which it has previously invested. ACR has a dedicated and experienced management team led byJason Searle, ACR’s Managing Director, who has extensive experiencein the wood stove industry in the UK and acrossEurope. Decisive is also pleased to announcethat Alan Murphy, the President of Blaze King, has been named as Headof Decisive’s Hearth Division while continuing to operate asPresident of Blaze King. Alan, along with the rest of the managementteam at Blaze King, has led Blaze King through significant growthsince Decisive acquired it in 2015 . Jason and his team will continue to manage ACR on astandalone basis going forward while Jason will report to Alandirectly . We look forward to the benefits thatmay result from this organizational structure for both ACR and Blaze King as they work together to drive the growthof their respective businesses.

The Acquisition is subject to the terms and conditionsof a share purchase agreement which provided for a base purchase priceof $7.7 million, plus upward adjustments of $0.6 million for workingcapital in excess of negotiated targets, and up to an additional £2.75 million (approximately $4.2 million basedon the exchange rate published by the Bank ofEngland on September 29, 2022) in cash payments contingent on ACR achieving certain earnings targets over thenext three years. The base purchase price reflects the historicalearnings of ACR and represents a multiple of approximately 5.3 timesthe average Adjusted EBITDA (1) of ACR over the last three years.

On closing, the aggregate $8.3 million base purchaseprice and working capital adjustment was paid $7.6 million in cash(the “ Cash Consideration ”) and $0.7 million in common shares of Decisive (the“ Share Consideration ”). The Cash Consideration was funded with the proceeds ofDecisive’s recently announced private placement, which closed onSeptember 27, 2022 for gross proceeds of $7.6 million. The ShareConsideration was funded through the issuance of 166,790 common sharesof Decisive (representing £0.475 million, at the exchange rate published by the Bank ofEngland on September 29, 2022, divided by $4.31, being the volumeweighted average trading price of the common shares of Decisive forthe 10-day trading period ended September 30, 2022). The common sharesare held in escrow and are scheduled to bereleased at one-third per year in October 2023, 2024, and 2025respectively. No finder’s fee or commission was paid by Decisive inconnection with the Acquisition.

Jeff Schellenberg, Chief Executive Officer of Decisive,noted:

“When we first engaged with thevendors of ACR, Tony and Martyn Ryan, we immediately sensed a strongalignment between our business model and what they were looking for ina new home for their business.  Tony and Martyn are exactly the typeof exiting, legacy-minded business owners we are looking to complete business ownershiptransitions with. Tony and Martyn have done an excellent job toprepare the business for this ownership transition and we are excitedto be able to work with Jason Searle to preserve Tony and Martyn’slegacy while building on it to drive this business forward into thefuture.

A key element of our acquisitionstrategy is to pursue opportunities to add-on businesses in industrysectors that we have had success in. Given the success of Blaze King,we feel that the Hearth sector is a great place for us to start.  Ontop of this, with its dealer distribution network driving recurringstreams of revenue and low capital intensity resulting from itsengagement of third-party manufacturers to build its products, ACR isa tremendous fit for Decisive’s dividend paying businessmodel”.

Alan Murphy, Hearth Division Head and President ofBlaze King, stated:

“It is an exciting time to operatein the renewable energy side of the Hearth industry. I am lookingforward to working with Jason and the ACR team as we explore thefuture possibilities and growth opportunities for ACR, Blaze King andDecisive.”

Tony Ryan, Founder of ACR noted:

“ACR has a rich history and I amproud of what we have achieved since we started over 30 years ago. Weare extremely excited to watch the business grow under the ownershipof Decisive; their understanding of the sector, strong values andprincipled approach were key factors in deciding to partner withthem. ”

The table below sets forth the pro forma combinedfinancial information of Decisive after giving effect to theacquisitions completed by it in 2022 (being ACR and Marketing ImpactLimited (“MIL”)), for the trailing twelve-month period ended June30,2022:

1. Adjusted EBITDA is not a recognized financialmeasure under International Financial Reporting Standards (IFRS) andtherefore may not be comparable to similar measures presented by otherissuers, but it is used by management to assess the performance of theCorporation. See ”Non-GAAPFinancial Measures” later in this press release for the fulldescription of Adjusted EBITDA and a reconciliation of applicable IFRSmeasures to non-IFRS measures

2. Based on Decisive’s auditedfinancial information for the year ended December 31, 2021.

3. Based on Decisive’s unauditedfinancial information for the six-month period ended June 30,2021.

4. Based on Decisive’s unauditedfinancial information for the six-month period ended June 30,2022.

5. Based on MIL’s unaudited financialinformation for the period from July 1, 2021 to April 14, 2022, thedate it was acquired by Decisive. See “Information Relating to MIL”later in this press release

6. Based on ACR’s unaudited financialinformation for the period from July 1, 2021 to June 30, 2022. See “Information Relatingto ACR” later in this press release

Decisive is continuing to evaluate further acquisitionopportunities in its healthy, and growing, pipeline of potentialtargets and looks forward to providing updates to its shareholders asa result of these efforts .

About Decisive DividendCorporation

Decisive Dividend Corporation is anacquisition-oriented company, focused on opportunities inmanufacturing. The Corporation’s purpose is to be the sought-outchoice for exiting legacy-minded business owners, while supporting thelong-term success of the businesses acquired, and through that,creating sustainable and growing shareholder returns. The Corporationuses a disciplined acquisition strategy to identify alreadyprofitable, well- established , high qualitymanufacturing companies that have a sustainable competitive advantage, a focus onnon-discretionary products, steady cash flows,growth potential and established, strong leadership.

For more information on Decisive, or to sign up foremail notifications of Corporation press releases, please visit www.decisivedividend.com .

FOR FURTHER INFORMATION PLEASE CONTACT:

Jeff Schellenberg, Chief Executive Officer

#260 – 1855 Kirschner Road

Kelowna, BC V1Y 4N7

Telephone: (250) 870-9146

CautionaryStatements

Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in policies ofthe TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this release .

InformationRelating to ACR

This press release contains certaininformation (including historical financial information) relating toACR, a private company acquired by Decisive. The information(including financial information) contained herein with respect to ACRis based upon information provided to Decisive by ACR and itsmanagement and shareholders and includes certain non-recurring andrelated party private company transactions that have been excludedfrom the calculation of Adjusted EBITDA below. The financialinformation relating to ACR has not been audited.

InformationRelating to MIL

This press release contains certainhistorical financial information relating to MIL, a private companyacquired by Decisive on April 14, 2022. The pre-acquisition financialinformation contained herein with respect to MIL is based uponinformation provided to Decisive by MIL and its management andshareholders and includes certain non-recurring and related partyprivate company transactions that have been excluded from thecalculation of Adjusted EBITDA below. The financial informationrelating to MIL has not been audited.

Non-GAAP FinancialMeasures

In this press release, reference ismade to “Adjusted EBITDA”, which is not a recognized financialmeasure under IFRS, but is believed to be meaningful in the assessmentof the Corporation’s performance.

“Adjusted EBITDA” is defined asearnings before finance costs, income taxes, depreciation,amortization, foreign exchange gains or losses, other non-cash itemssuch as gains or losses recognized on the fair value of contingentconsideration items, asset impairment, share-based compensation, andrestructuring costs, and other non-operating items such as acquisitioncosts.

Adjusted EBITDA is a financialperformance measure that management believes is useful for investorsto analyze the results of the Corporation’s operating activitiesprior to consideration of how those activities are financed and theimpact of non-operating charges related to planned or completedacquisitions, foreign exchange, taxation, depreciation, amortization,and impairment charges.

The most directly comparablefinancial measure is profit or loss. While Adjusted EBITDA is used bymanagement to assess the historical financial performance of theCorporation, readers are cautioned that:

• Non- IFRS financial measures, such as Adjusted EBITDA, are not recognized financial measures under IFRS

• The Corporation’s method ofcalculating Non- IFRS financial measures, such as Adjusted EBITDA, may differ fromthat of other corporation s or entities and therefore may not bedirectly comparable to measures utilized by other corporations orentities;

• Non- IFRS financial measures, such as AdjustedEBITDA, should not be viewed as an alternative to measures that arerecognized under IFRS such as profit or loss or cash from operatingactivities; and

• A reader should not place unduereliance on any Non- IFRS financial measures.

Set forth below are reconciliationsof Non-IFRS financial measures to their most relevant IFRS measuresfor each of the relevant periods .

Forward-LookingStatements

Certain statements contained in this press release constituteforward-looking information. These statements relate to future eventsor future performance. The use of any of the words “could”,“intend”, “expect”, “believe”, “will”,“projected”, “estimated” and similar expressions andstatements relating to matters that are not historical facts areintended to identify forward-looking information and are based onmanagement’s current beliefs, assumptions and expectations as to theoutcome and timing of such future events.  Actual future results maydiffer materially. In particular, this press release containsforward-looking information relating to the future financial position,operations, business strategy, plans and objectives of theCorporation, and the potential impact, including growth expectations,of the Acquisition on the operations, financial condition, capitalresources, business and dividend policy of the Corporation. Riskfactors that could cause actual results or outcomes to differmaterially from the results expressed or implied by forward-lookinginformation include, among other things: risks relating to theAcquisition (as moreparticularly described under the heading "Risk Factors – RiskRelating to Acquisitions" in the Corporation's most recent annualinformation form), as well as general economic conditions; pandemics;competition; government regulation; environmental regulation; accessto capital; market trends and innovation; climate risk; generaluninsured losses; risk related to acquisitions generally; dependenceon customers, distributors and strategic relationships; supply andcost of raw materials and purchased parts; operational performance andgrowth; implementation of the growth strategy; product liability andwarranty claims; litigation; reliance on technology, intellectualproperty, and information systems; availability of future financing;interest rates and debt financing; income tax matters; foreignexchange; dividends; trading volatility of common shares; dilutionrisk; reliance on management and key personnel; employee and labourrelations; and conflicts of interest, all as more particularlydescribed in the most recent annual MD&A and annual informationform of the Corporation available on the Corporation’s profile atwww.sedar.com. There can beno assurance as to the future financial performance of the Corporationor that the board of directors of the Corporation will declare or pay any dividends in thefuture or, if dividends are declared and paid, there can be noassurance as to the frequency or amount of such dividends . The Corporation cautions the reader that the risk factors referencedabove are not exhaustive. The forward-looking information contained inthis release is made as of the date hereof and the Corporation is notobligated to update or revise any forward-looking information, whetheras a result of new information, future events or otherwise, except asrequired by applicable securities laws. Because of the risks,uncertainties and assumptions contained herein, investors should notplace undue reliance on forward-looking information. The foregoingstatements expressly qualify any forward-looking information containedherein .

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