CALGARY, Alberta, Aug. 02, 2024 (GLOBE NEWSWIRE) -- DIRTT Environmental Solutions Ltd. ("DIRTT" or the "Company") (TSX:DRT, OTC:DRTTF), a leader in industrialized construction, announced today that it has entered into an agreement (the "Repurchase Agreement") with 22NW Fund LP ("22NW"), DIRTT's largest shareholder, to purchase for cancellation an aggregate of C$18,915,000 principal amount of DIRTT's outstanding 6.00% convertible debentures due January 31, 2026 (the "January Debentures") at a purchase price of C$684.58 per C$1,000 principal amount of January Debentures and C$13,638,000 principal amount of DIRTT's outstanding 6.25% convertible debentures due December 31, 2026 (the "December Debentures" and together with the January Debentures, the "Debentures") at a purchase price of C$665.64 per C$1,000 principal amount of December Debentures, for an aggregate purchase price of C$22,104,591.45, inclusive of a cash payment for all accrued and unpaid interest up to, but excluding, the date on which such Debentures are purchased by the Company (the "Debenture Repurchase"). The purchase price of each series of Debentures (excluding the cash payment for accrued and unpaid interest) represents a discount of approximately 4% to the average trading price of the applicable series of Debentures on the Toronto Stock Exchange (the "TSX") for the 20 trading days preceding August 2, 2024. Following the Debenture Repurchase, C$16,642,000 principal amount of the January Debentures and C$15,587,000 principal amount of the December Debentures will remain outstanding, and 22NW will no longer hold any Debentures. DIRTT also entered into a support and standstill agreement (the "Support Agreement") with 22NW and WWT Opportunity #1 LLC ("WWT"), DIRTT's second largest shareholder. The Support Agreement replaces the previously announced support and standstill agreement entered into with 22NW on March 22, 2024. Under the Support Agreement, both 22NW and WWT have agreed to certain voting and standstill obligations, including voting in favor of the management director nominees at each of DIRTT's next two annual general meetings and voting in favor of the ratification of the Amended and Restated SRP (as defined below). Additionally, each of 22NW and WWT has the right to designate a director nominee at each of DIRTT's next two annual general meetings, and are each subject to certain restrictions with respect to commencing a take-over bid for the Company. The Support Agreement also permits WWT to acquire up to 4,067,235 additional common shares of the Company ("Shares") through market purchases (representing approximately 2% of the issued and outstanding Shares), which will provide WWT with an opportunity to own the same number of Shares as 22NW (being 57,447,988 Shares, or approximately 29.8% of the current issued and outstanding Shares). The Support Agreement otherwise prohibits each of 22NW and WWT from acquiring any additional Shares. To give effect to the terms of the Support Agreement, DIRTT's Board of Directors (the "Board") has adopted an amended and restated shareholder rights plan effective August 2, 2024 (the "Amended and Restated SRP") that amends and restates the Company's shareholder rights plan agreement originally adopted by the Board on March 22, 2024 (the "Original SRP"), which remains subject to shareholder approval. The Amended and Restated SRP revises the definition of Exempt Acquisition to permit WWT to acquire additional Shares without triggering the provisions of the Amended and Restated SRP. The Amended and Restated SRP is otherwise consistent with the Original SRP and, as previously announced, is substantially similar to the rights plan adopted by the Company in 2021. Like the Original SRP, the Amended and Restated SRP is intended to help ensure that all shareholders of the Company are treated fairly and equally in connection with any unsolicited take-over bid or other acquisition of control of the Company (including by way of a "creeping" take-over bid). The Amended and Restated SRP is not being adopted in response to any specific proposal to acquire control of the Company, and the Board is not aware of any pending or potential take-over bid for the Company. While the Amended and Restated SRP has been approved by the Board and is now in effect, it remains subject to shareholder ratification at a special meeting to be held later this year (the "SRP Meeting"). To continue to be effective, the Amended and Restated SRP must be approved by a simple majority of the votes cast at the SRP Meeting, as well as a majority of the votes cast at the SRP Meeting excluding votes cast by 22NW and WWT. If the Amended and Restated SRP is not ratified by shareholders, the Amended and Restated SRP and any rights issued thereunder will cease at that time. The full text of the Support Agreement and the Amended and Restated SRP will be available on the Company's profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. DETAILS OF THE DEBENTURE REPURCHASE Closing of the Debenture Repurchase is expected to occur later today. DIRTT will fund the Debenture Repurchase with cash on hand and remains well positioned to continue funding its ongoing strategic initiatives using cash on hand and operating cash flows. The Debenture Repurchase was overseen by a Special Committee of the Board consisting entirely of independent directors, which was established to consider strategic financing alternatives and other matters (the "Special Committee"). The Special Committee undertook a deliberate and full consideration of the Debenture Repurchase with the assistance of its external advisors. The Special Committee engaged KPMG LLP ("KPMG"), who provided an opinion stating that, subject to the assumptions, limitations and qualifications therein, as of the date thereof, the consideration to be paid by DIRTT pursuant to the Repurchase Agreement is fair, from a financial point of view, to ...