Golf Town and Golfsmith complete business combination

Closing Date: 7/24/2012

Value: US$163.1 million

On July 24, 2012, Golf Town USA Holdings Inc., through a wholly owned subsidiary, completed the acquisition of 100 per cent of the common shares of Golfsmith International Holdings, Inc. (Golfsmith) by way of plan of merger for aggregate consideration of approximately US$163.1 million (the Acquisition). The combination of the Golf Town and Golfsmith businesses creates North America’s largest multi-channel specialty golf retailer. The combined business will operate under the name Golfsmith International, with all stores located in Canada branded as Golf Town and all stores in the US branded as Golfsmith. The combined business will be majority owned, indirectly, by OMERS Administration Corporation for and on behalf of the OMERS pension plans (OMERS) and will be managed by OMERS Private Equity Inc., which is the entity responsible for identifying and managing the private equity investments of OMERS.

Immediately following completion of the Acquisition, Golf Town Canada Inc. (Golf Town Canada) and Golfsmith completed a private placement of 125,000,000 units (Units) for aggregate gross proceeds of C$125,000,000 (the Offering), with each Unit consisting of (i) C$0.64 principal amount of 10.50 per cent senior second lien notes of Golf Town Canada due 2018, and (ii) C$0.36 principal amount of 10.50 per cent senior second lien notes of Golfsmith due 2018. The Offering was underwritten by a syndicate of underwriters comprised of Scotia Capital Inc., TD Securities Inc. and BMO Nesbitt Burns Inc., as joint bookrunners, and HSBC Securities (Canada) Inc. and National Bank Financial Inc., as co-managers. The Units were issued pursuant to a trust indenture with BNY Trust Company of Canada, as Canadian co-trustee and Canadian co-collateral agent and The Bank of New York Mellon, as US co-trustee and US co-collateral agent.

Following completion of the Acquisition, Golfsmith and Golf Town Canada, as borrowers, and GE Capital, Corporate Retail Finance, as administrative agent, entered into a new secured credit facility (the ABL Facility), consisting of a US$135,000,000 revolving credit facility and a C$15,000,000 non-revolving first-in last-out term loan facility.

BNY Trust Company of Canada and The Bank of New York Mellon were represented in Canada by BLG with a team consisting of Gordon Raman and Gus Karantzoulis.