Mr. Paul Bissett reports

ELEVATE SERVICE GROUP ANNOUNCES TRANSFORMATIONAL ACQUISITION OF TFI FOOD EQUIPMENT SOLUTIONS, A LEADING FOODSERVICE EQUIPMENT DISTRIBUTOR AND SERVICE PROVIDER

Elevate Service Group Inc. has entered into a definitive agreement to acquire Taylor Freezers Inc. (doing business as TFI Food Equipment Solutions), a leading service provider and distributor of specialized food-service equipment. Headquartered in Ontario, TFI brings exclusive multiyear distribution rights from leading equipment suppliers (Taylor, Henny Penny and Franke Coffee Systems) and a network of technicians with factory-trained expertise. TFI has trusted relationships with the most recognized quick-service restaurant (QSR), grocery and convenience brands in Canada including McDonald's, Tim Hortons, Circle K, Loblaws, Dairy Queen, KFC and many others. The acquisition is expected to be completed in early May, 2026.

The acquisition represents a defining milestone in Elevate's strategy to build a national self-performing facilities management and commercial services platform, anchored by equipment OEM (original equipment manufacturer) partnerships, and materially increases Elevate's ability to deliver comprehensive services to national customers. Through TFI, Elevate benefits from revenue diversification, network expansion and trusted relationships, with thousands of locations servicing fryers, ovens, grills, ice cream machines and premium coffee systems. These trusted relationships create a clear pathway to cross-sell Elevate's integrated facility services, including electrical, plumbing, lighting and general maintenance, across a shared blue-chip customer base.

"This is a transformational acquisition for Elevate, increasing our pro forma revenue by 80 per cent," said Paul Bissett, chief executive officer of Elevate. "TFI brings scale, brand credibility, exclusive supplier relationships, deep technical specialization and blue-chip customer relationships. We are acquiring a 70-plus-year operating platform that serves major restaurant and retail brands across Canada, creating substantial long-term opportunities for organic growth across Elevate's broader commercial services platform."

"TFI represents a significant step forward in Elevate's national platform strategy," said Romeo Di Battista Jr., executive chairman of Elevate. "The acquisition increases our pro forma revenue base to about $90-million, adds recurring service and parts revenue, and provides a stronger foundation to execute on future acquisition and organic growth opportunities. Importantly, TFI introduces Elevate into new national accounts where our broader facilities management offering can become increasingly relevant as we deepen these relationships over time."

Strategic rationale

The acquisition is highly strategic and materially strengthens Elevate's national platform.

• Material scale and revenue diversification: adds $40-million of annual revenue, including $5-million of recurring subscription revenue, increasing Elevate's pro forma revenue base to $90-million while diversifying Elevate's customer base and revenue mix across equipment sales, service, parts and recurring maintenance;
• Access to blue-chip customers: TFI's long-standing relationships add to Elevate's existing blue-chip customer base with access to thousands of new locations across major QSR, grocery, convenience and retail chains, including customers with large national footprints and recurring facility needs;
• Competitive market position: TFI's operating history, exclusive supplier relationships and factory-trained technicians together represent a defensible competitive position that is difficult to replicate organically;
• Expanded technician base and capability: the addition of greater than 60 specialized technicians nearly doubles Elevate's internal service capacity to 130 technicians and provides an immediate platform for high-margin service labour, parts supply and recurring maintenance programs;
• Compelling organic cross-selling opportunity: Elevate believes TFI's customer base presents a significant organic growth opportunity to introduce Elevate's broader facility services to existing TFI customers;
• Accretive financial profile with margin expansion: the acquisition is expected to be immediately accretive to Elevate's earnings, with the potential to expand TFI's margins over time through operational integration, procurement efficiencies, shared infrastructure, working capital stabilization and cross-selling synergies across Elevate's broader facilities management platform.

Financial highlights

TFI generated approximately $40-million of revenue for the 12 months ended Dec. 31, 2025, with $24-million of service and parts revenue and $16-million of equipment revenue. Approximately $5-million of service and parts revenue is recurring under TFI's Total Care program, a subscription-based program covering scheduled maintenance, reactive service and parts. During 2025, TFI generated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margins of over 10 per cent after considering the impact of certain non-recurring expenses and costs and prior to integration, cross-selling and synergies. The acquisition increases Elevate's pro forma revenues for the period ended Dec. 31, 2025, by 80 per cent to approximately $90-million, after incorporating the previously announced acquisitions of Charged Electric, Think Green Solutions and JJ&A Mechanical.

Transaction structure and consideration

The acquisition consideration comprises: (i) $300,000 cash at closing; (ii) the issuance of 365,000 common shares of Elevate (with lock-ups ranging from four months to five years); and (iii) the issuance of a $1.8-million unsecured, subordinated promissory note with a three-year term. The promissory note is non-interest-bearing and repayable through amortization payments of $300,000 every six months.

Debt refinancing and credit facility

At closing, Elevate is refinancing TFI's senior secured indebtedness of approximately $6.5-million. Elevate is entering into an amended and restated credit facility with a Schedule I Canadian bank providing for a $7.5-million term loan facility, amortized over seven years and bearing interest at prime plus 1.25 per cent per annum. The credit facility also increases Elevate's revolving operating loan limit from $1-million to $6-million, subject to borrowing base availability. The revolving operating loan is expected to be undrawn at closing. The contractual term of the credit facility matures in May, 2028.

Working capital investment

Elevate has also committed to making a working capital investment of approximately $4-million at closing to stabilize TFI's working capital, reduce vendor payables and capitalize on immediate growth opportunities.

Key employees

Key employees of TFI have entered into revised long-term employment agreements. In connection with these agreements, Elevate has granted 100,000 restricted stock units that vest 20 per cent on the two-year anniversary, 20 per cent on the three-year anniversary, 20 per cent on the four-year anniversary and 40 per cent on the five-year anniversary of closing. Elevate has also granted 140,000 stock options with an exercise price of $1.90 per share, a five-year term and proportionate vesting over the first three years. Elevate granted 150,000 additional options to an adviser with an exercise price of $1.90 per share and a three-year term.

TFI Food Equipment Solutions overview

Founded over 70 years ago, TFI has grown into one of Canada's most established food-service equipment distribution and service platforms. TFI is the exclusive equipment supplier in Ontario and Atlantic Canada for three globally recognized restaurant equipment brands: Taylor, Henny Penny and Franke Coffee Systems. Through these distribution agreements, TFI sells mission-critical restaurant equipment, including ice cream machines, milkshake and frozen beverage machines, high-performance double-sided grills, ovens, fryers, and premium coffee systems.

TFI serves thousands of customer locations across the food-service, grocery, convenience and institutional sectors, including major national and global brands such as McDonald's, Tim Hortons, Circle K, Loblaws, Dairy Queen, KFC and numerous other operators.

TFI has built a robust service business designed to maximize uptime, reliability and customer satisfaction for equipment that is essential to store-level operations. TFI's service technicians are the only factory-trained and certified technicians in its territory, providing customers with specialized technical expertise for high-value equipment. The team of more than 60 technicians delivers installation, warranty service, preventative maintenance, emergency repair, reactive support and parts.

Closing

The acquisition is expected to be completed in early May, 2026.

About Elevate Service Group Inc.

Elevate is a national facilities management and essential commercial services platform focused on consolidating and modernizing this fragmented sector. Through its operating companies, Elevate brings over 20 years of experience as a trusted partner to national, blue-chip customers. Elevate's strategy is to integrate a portfolio of profitable operating businesses across a scalable, national platform supported by shared infrastructure, technology and operational best practices. This approach drives efficiencies, expands service offerings and enhances customer outcomes while extending Elevate's geographic reach. Elevate trades on the TSX Venture Exchange under the ticker SERV.

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