You are an entry-level consultant at the Merger and Acquisition department at Deloitte. During the first week of your job, as part of your training process, your supervisor asks you to read and then review the following reverse acquisition case:

Savaria Ltd. is a Canadian listed company with 900,000 outstanding common shares, and its stock price is $0.20 per share as of December 31, 2016. The companys business operations is dormant due to financial distress and loss of major operating assets, and it has an outstanding lawsuit as disclosed in footnotes to its statement of financial position, which might cause a loss of $400,000 if Savaria loses the lawsuit in 2020. Semafo Ltd. is a private enterprise with 1,200 common shares and plan to go public as soon as possible. On October 30, 2018, Semafo signed a reverse acquisition agreement with Savaria. Following the agreement, Savaria issued 1,500,000 new common shares to Semafo, to exchange for all Semafos 1,200 shares. On that date, the quoted stock price of Savaria increased to $1.50 per share, and the fair value of each share of Semafo is $4000, as agreed by both companies. After the acquisition, the company name of Savaria was changed to Semafo immediately.

Required: Please write a short case report of no longer than one and a half page for this reverse acquisition, and the analysis section of the report should address the following five issues, and the recommendation/conclusion section should indicate whether you will recommend reverse acquisition to your future clients who plan to go public: (18 marks)

a) Who is the legal acquirer, actual acquirer, legal acquiree and actual acquire in this reverse acquisition? b) how much is the acquisition consideration? c) How much is the acquisition goodwill in this reverse acquisition deal? d) What is the benefit of the name change following the reverse acquisition?

e) What are the costs and benefits of this reverse acquisition from the point of view of Semafo?