Mr. Imran Gibbons reports

VELAN ANNOUNCES CLOSING OF SALE OF CONTROLLING SHAREHOLDER'S INTEREST TO BIRCH HILL AND CEO AND CFO TRANSITIONS TO SUPPORT ITS NEXT PHASE OF GROWTH

The sale by Velan Inc.'s controlling shareholder, Velan Holding Co. Ltd., of its controlling interest in the company to funds managed by Birch Hill Equity Partners Management Inc. has closed. The company is planning board and management changes, marking the next phase of Velan's strategic growth.

Velan Holding, the sole holder of the company's 15,566,567 multiple voting shares and holder of one subordinate voting share, representing approximately 72.1 per cent of the company's outstanding shares and 92.8 per cent of its aggregate voting rights, sold its interest to Birch Hill at a price of $13.10 (Canadian) per share, for aggregate gross proceeds of $203,922,040.80 (Canadian) to Velan Holding and two other entities associated with shareholders of Velan Holding (VH).

As part of a preclosing reorganization, Velan Holding converted 2,290,075 of its multiple voting shares into an equal number of subordinate voting shares. Accordingly, upon completion of the VH transaction, Birch Hill acquired 13,276,492 multiple voting shares and 2,290,076 subordinate voting shares, representing approximately 72.1 per cent of the company's outstanding shares and 91.9 per cent of its aggregate voting rights.

While Velan was not a party to the VH transaction, the company facilitated the transaction pursuant to the co-operation agreement entered into with Birch Hill, as previously announced on Jan. 14, 2026, including in connection with obtaining applicable regulatory approvals.

As Birch Hill chief operating officer and partner Pierre Schuurmans commented at the time of the transaction announcement: "We have immense respect for the 75-year legacy the Velan family has built, rooted in decades of engineering excellence and manufacturing expertise across critical global industries. We are proud to invest in a company with such strong Quebec heritage and global presence. We look forward to building on this foundation and supporting the company's continued growth and innovation."

With the closing of the VH transaction, Velan is announcing changes to its board of directors and management changes that reflect the company's growth trajectory, and support business continuity.

Ivan Velan, Peter Velan, Rob Velan and Tom Velan, each of whom was serving on the board as a representative of the company's previous controlling shareholder, have resigned from Velan's board. The company thanks each of them for their longstanding service and contributions.

Patrick Duncan, a partner at Birch Hill, has been appointed chairman of the board. Joshua Lundy, Jim Mannebach and Shauna Gamble have been appointed to the board as Birch Hill nominees, with Ms. Gamble serving as an independent director. Daniel Desjardins, Edward Kernaghan and Suzanne Blanchet will continue to serve as independent directors, with Mr. Desjardins being appointed lead director.

Jim Mannebach will be retiring as chief executive officer from the company and stepping down as chair of the board. As noted above, he will remain on the board as a director and, in addition, will support a period of transition. The company is grateful to Mr. Mannebach for his leadership during this important transition period.

"On behalf of the board, I want to thank Jim for his steady leadership during an important transition period for Velan," said Mr. Desjardins, an independent director of the company. "After first serving on an interim basis, Jim stepped into the CEO role and helped guide the company through this phase with focus and stability. We are grateful for his contributions and pleased that he will continue to support Velan as a member of the board."

As part of this transition, Rishi Sharma, a seasoned Velan executive and previous chief financial officer of the company, has been appointed president and chief executive officer. Imran Gibbons, previously vice-president, global financial planning and analysis, has been appointed chief financial officer.

"I would like to thank Jim, and the Velan family for the support, guidance and opportunity over the past four years. I am also humbled and sincerely thankful to the Birch Hill team and the board for their trust in giving me this exciting new opportunity. With the strategic transactions closed in the last two years, Velan enters its next phase from a position of strength. We have a highly skilled team, deep technical expertise and a strong commitment to our customers around the world. With the support of Birch Hill's long-term investment plan, we are well positioned to accelerate the execution of our strategy, invest in the capabilities that will strengthen our competitiveness, and continue building a stronger business for our employees, customers and shareholders. I am very excited for our future," commented Mr. Sharma.

In addition, the company is pleased to announce that it intends to close a new $80-million (U.S.) revolving credit facility with a leading Canadian financial institution. The facility is expected to have a five-year term to June, 2031. The new credit facility will enhance Velan's capital structure with expanded liquidity, enhanced durability and a lower cost of capital. The facility is expected to be used to retire other debt in North America at closing of the facility and for general corporate purposes going forward.

Advisers to the company and to Velan Holding

National Bank Financial is acting as financial adviser to the company. Davies Ward Phillips & Vineberg LLP is acting as legal adviser to the company, Norton Rose Fulbright Canada LLP is acting as legal adviser to the special committee, and McCarthy Tetrault LLP is acting as legal adviser to Velan Holding.

Advisers to Birch Hill

TD Securities Inc. is acting as exclusive financial advisoe to Birch Hill. Stikeman Elliott LLP is acting as legal adviser to Birch Hill.

About Velan Inc.

Founded in Montreal in 1950, Velan is one of the world's leading manufacturers of industrial valves, with sales of $295-million (U.S.) in its last reported fiscal year. The company employs approximately 1,200 people and has manufacturing plants in nine countries. Velan is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.

About Birch Hill Equity Partners Management Inc.

Birch Hill is a Canadian mid-market private equity firm with a long history of driving growth in its portfolio companies and delivering returns to its investors. Based in Toronto, Birch Hill currently has over $6-billion (Canadian) in capital under management. Since 1994, the firm has made 74 investments, with 60 fully realized. Today, Birch Hill's 14 partner companies collectively represent one of Canada's largest corporate entities with over $9-billion (Canadian) in total revenue and more than 40,000 employees.

Early warning disclosure by Birch Hill

Further to the requirements of National Instrument 62-104, Take-Over Bids and Issuer Bids, and National Instrument 62-103, The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Birch Hill will file an early warning report in connection with the VH transaction in accordance with applicable securities laws. A copy of the early warning report will be filed with applicable securities commissions and will be made available on the company's profile on SEDAR+. Further information and a copy of the early warning report may be obtained care of Birch Hill, 81 Bay St., Unit 4510, Toronto, Ont., M5J 0E7, telephone: 416-775-3800.

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