Mr. Clive Kinross reports

PROPEL TO ACCELERATE GLOBAL EXPANSION WITH THE ACQUISITION OF QUIDMARKET FOR US$71 MILLION AND ANNOUNCES CONCURRENT C$100 MILLION BOUGHT DEAL OFFERING OF SUBSCRIPTION RECEIPTS

Propel Holdings Inc. has entered into a definitive agreement to acquire Stagemount Ltd. (doing business as QuidMarket), a leading digital United Kingdom based fintech (financial technology) lender specializing in credit for underserved consumers.

Acquisition highlights:

• Launched in 2011, QuidMarket is one of the United Kingdom's leading digital direct lending platforms, focused on the underserved consumer;
• Accelerates Propel's growth strategy through global expansion, with a foothold in United Kingdom market;
• Expands access to credit and best-in-class products for underserved United Kingdom consumers, where demand for credit exceeds supply;
• The existing management team at QuidMarket will continue to operate the business on a go-forward basis;
• Management believes the acquisition will be immediately accretive to Propel's 2024 and 2025 adjusted earnings per share, on a pro forma basis, and excluding transaction costs and prior to any potential synergies;
• $71-million (U.S.) acquisition price (all cash) to be financed through concurrent offering of subscription receipts.

"The acquisition of QuidMarket will accelerate Propel's growth and is a critical step in our journey to becoming a global leader," said Clive Kinross, chief executive officer of Propel. "When we went public three years ago, we set a goal to grow globally. As disciplined operators with a track record of profitable growth, this acquisition had to meet our strict acquisition criteria, including a favourable operating jurisdiction, a strong cultural fit and to be financially accretive to our shareholders. QuidMarket serves a market of more than 20 million underserved consumers in the U.K., where the demand for credit far exceeds supply. Backed by Propel's AI-powered [artificial intelligence] technology, financial and operational expertise, and capital resources, we believe QuidMarket will be able to accelerate its growth while broadening access to credit for more underserved consumers. The QuidMarket team has demonstrated deep experience and a customer focus that sets them apart. United by a shared purpose, together, we will build a new world of financial opportunity for consumers globally."

Acquisition benefits:

• Accelerates growth strategy: The acquisition is an important step in Propel's global expansion strategy. Since its initial public offering in October, 2021, Propel has continued to broaden its product and geographic offerings with the introduction of Fora Credit in Canada, lending-as-a-service partnerships in the United States and, most recently, an embedded lending partnership with Koho in Canada. Based in Nottingham, United Kingdom, QuidMarket has served United Kingdom consumers since 2011 and is growing into a market leader. The United Kingdom market has an estimated 20 million underserved consumers and provides a foothold in the large underserved European market. Existing QuidMarket management, with deep experience in the United Kingdom market, will continue to operate the company on a go-forward basis.
• Leverages Propel's capabilities: A fully on-line lending solution, QuidMarket is built on scalable and flexible technology that has originated over 310,000 loans to underserved consumers in the United Kingdom since beginning operations in 2011. Supported by Propel's AI technology, financial and operational expertise, and capital resources, QuidMarket is expected to accelerate its growth and deliver best-in-class products to more United Kingdom consumers.
• Providing value creation for shareholders: Similar to Propel, QuidMarket has demonstrated a successful record of driving meaningful growth and profitability. For the 12 months ended June 30, 2024, QuidMarket generated revenue and net income of approximately $27.7-million (U.S.) and $9.6-million (U.S.), respectively, calculated under United Kingdom GAAP (generally accepted accounting principles).

Acquisition details

The consideration for the acquisition comprises $71-million (U.S.) of cash payable at closing. The purchase price implies a multiple of approximately 7.4 times QuidMarket's net income for the 12 months ended June 30, 2024, calculated under United Kingdom GAAP. The company intends to finance the purchase price for the acquisition with the net proceeds from the offering (as defined herein).

Management expects that the acquisition will be immediately accretive to Propel's full-year 2024 and 2025 adjusted earnings per share, on a pro forma basis and excluding transaction costs and prior to potential synergies. Following the completion of the acquisition and the offering, Propel expects to operate the combined business with a debt-to-equity ratio of approximately 1.3 times as of June 30, 2024.

Closing details

The acquisition is expected to close in either Q4 2024 or in early Q1 2025, subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, including the approval of the Financial Conduct Authority (FCA).

Bought deal equity offering of subscription receipts

Concurrent with the execution of the definitive agreement, the company has entered into an agreement with a syndicate of underwriters co-led by Canaccord Genuity Corp. and Scotia Capital Inc. pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 3.64 million subscription receipts of the company at a price of $27.50 per subscription receipt for aggregate gross proceeds to the company of approximately $100-million. The company has also granted the underwriters an overallotment option to purchase up to an additional 15 per cent of the offering on the same terms and conditions, for market stabilization purposes, exercisable at any time, in whole or in part, until the earlier of: (i) 5 p.m. on the day that is 30 days following the closing of the offering; and (ii) the date that a termination event occurs (the overallotment option), which, if exercised in full, would increase the gross proceeds of the offering to approximately $115-million.

The company intends to use the net proceeds from the offering to finance the purchase price for the acquisition. The balance of net proceeds, if any, will be used for working capital and general corporate purposes. The proceeds from the sale of the subscription receipts payable to the corporation, will be held by an escrow agent pending the fulfilment or waiver of all outstanding conditions precedent to closing of the acquisition (other than the payment of the consideration for the acquisition). There can be no assurance that the applicable closing conditions will be met or that the acquisition will be consummated.

Upon the closing of the acquisition: (a) one common share will be automatically issued in exchange for each subscription receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder thereof; and (b) an amount per subscription receipt equal to the per-share cash dividends declared by the company on the common shares to holders of record on a date during the period that the subscription receipts are outstanding, net of any applicable withholding taxes, will become payable in respect of each subscription receipt.

If the acquisition is not completed as described herein by March 26, 2025, or if the acquisition is terminated at an earlier time, the gross proceeds of the offering and pro rata entitlement to interest earned or deemed to be earned on the gross proceeds of the offering, net of any applicable taxes, will be paid to holders of the subscription receipts, and the subscription receipts will be cancelled.

The subscription receipts will be offered pursuant to a prospectus supplement to the company's short-form base shelf prospectus dated May 10, 2024, which is expected to be filed in each of the provinces of Canada, except Quebec, on or about Sept. 30, 2024. Further information regarding the offering and the acquisition, including related risk factors, will be set out in the prospectus supplement. The offering is expected to close on or about Oct. 3, 2024, and is subject to certain conditions, including, but not limited to, the approval of the Toronto Stock Exchange. Access to the prospectus supplement, the corresponding base shelf prospectus and any amendment to the documents are provided in accordance with securities legislation relating to procedures for providing access to a shelf prospectus supplement, a base shelf prospectus and any amendment to the documents. The base shelf prospectus is accessible and the prospectus supplement will be accessible within two business days through SEDAR+.

An electronic or paper copy of the prospectus supplement, the corresponding base shelf prospectus and any amendment to the documents may be obtained, without charge, from the corporate secretary of the company at 69 Yonge St., Suite 1500, Toronto, Ont., M5E 1K3, Canada (telephone: 647-776-5479), by providing the contact with an e-mail address or address, as applicable.

The base shelf prospectus and prospectus supplement will contain important detailed information about the company and the offering. Prospective investors should read the shelf prospectus and prospectus supplement (when filed) and the other documents the company has filed on SEDAR+ before making an investment decision.

Investor call

Propel will be hosting a conference call and webcast with a presentation by Mr. Kinross, chief executive officer, and Sheldon Saidakovsky, chief financial officer, at 5:30 p.m. EDT on Sept. 26, 2024, to discuss the acquisition.

Date:  Thursday, Sept. 26, 2024

Time:  5:30 p.m. EDT

Toll-free North America dial-in number:  1-888-510-2154

Local Toronto dial-in number:  1-437-900-0527

Replay numbers:  1-888-660-6345 or 1-289-819-1450 (PIN: 24511 followed by the number sign)

Advisers and counsel

In connection with the acquisition, Canaccord Genuity Corp. acted as the exclusive financial adviser to Propel and Stikeman Elliott LLP and A&O Shearman acted as legal advisers. Nelson Mullins Riley & Scarborough LLP, Fogler Rubinoff LLP, and Walker Morris LLP acted as legal advisers to QuidMarket. Blake Cassels & Graydon LLP is acting as legal counsel to the underwriters with respect to the offering.

About Propel Holdings Inc.

Propel Holdings is a fintech company building a new world of financial opportunity for consumers, partners and investors. Propel's operating brands -- Fora Credit, CreditFresh and MoneyKey -- and its lending-as-a-service product line facilitate access to credit for consumers underserved by traditional financial institutions. Through its AI-powered platform, Propel evaluates customers in a more comprehensive way than traditional credit scores can. The result is better products and an expanded credit market for consumers while creating sustainable, profitable growth for Propel. The company's revolutionary fintech platform has already helped consumers access over one million loans and lines of credit and over $1-billion in credit. At Propel, the company is here to change the way customers, partners and investors succeed together.

About QuidMarket

Launched in 2011, QuidMarket is a leading United Kingdom based digital-only consumer lender specializing in providing short-term instalment loans to individuals with limited access to traditional financial solutions. QuidMarket is committed to responsible lending, offering tailored financial support to help consumers manage unexpected expenses.

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