Score Media and Gaming Inc. (TSX Venture: SCR)
(“theScore” or the “Company”) is pleased to announce
that it has entered into an investment agreement with a fund
managed and controlled by Fengate Asset Management
(“Fengate”). Through the firm’s private equity team, Fengate
will invest $40,000,000 in theScore to fund the growth and
development of the Company’s media and sports betting
businesses.
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the full release here:
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Under the terms of the agreement, Fengate will purchase a
$40,000,000 8.00% convertible unsecured subordinated debenture of
the Company, due August 31, 2024. The private placement of the
debenture is expected to close on or about September 5, 2019, and
is subject to certain conditions, including receipt of the approval
of the TSX Venture Exchange.
“theScore is focused on becoming a leader in mobile sports
gaming in North America and this strategic investment significantly
enhances our ability to execute on this plan,” said John Levy,
Founder and CEO of theScore. “Fengate is recognized as a highly
respected and experienced investor across North America, with
significant expertise in the gaming industry. They are the perfect
strategic investment partner as we launch our best-in-class mobile
sportsbook in the United States.”
Justin Catalano, Managing Director and Group Head, Private
Equity, Fengate, said, “We are excited by the opportunity to be
partnering with theScore and its entrepreneurial management team.
theScore's unique ability to integrate sports betting into their
industry-leading mobile sports media platform makes this investment
a strong addition to our growing private equity platform investing
across North America.”
Transaction Details
The debenture will mature on August 31, 2024, and will accrue
interest at the rate of 8.00% per annum payable semi-annually on
the last day of February and August of each year commencing on
February 29, 2020. At the holder’s option, the debenture may be
converted into Class A subordinate voting shares of the Company
(“Class A Shares”) at any time prior to the close of
business on the earlier of the business day immediately preceding
the maturity date and the business day immediately preceding the
date fixed for redemption of the debenture. The conversion price
will be $0.75 for each Class A Share, being a conversion rate of
1,333.3333 Class A Shares issuable for each $1,000 principal amount
of the debenture, subject to adjustment in certain
circumstances.
Subject to specified conditions, the Company may force the
conversion of the debenture into Class A Shares if the volume
weighted average trading price of the Class A Shares during the 20
trading days ending on the fifth trading day preceding the date on
which notice of the forced conversion is given is not less than
125% of the conversion price at any time (i) after August 31, 2021,
or (ii) if the principal sum of the debenture outstanding is
$4,000,000 or less.
Subject to specified conditions, the debenture may be redeemed
at the Company’s option at par plus accrued and unpaid interest at
any time (i) after August 31, 2023 if the volume weighted average
trading price of the Class A Shares during the 20 trading days
ending on the fifth trading day preceding the date on which notice
of the redemption is given is not less than 125% of the conversion
price, or (ii) if the principal sum of the debenture outstanding is
$4,000,000 or less.
Subject to specified conditions and subject to any required
regulatory and/or stock exchange or marketplace approvals, the
Company will be entitled to repay all or a portion of the
outstanding principal amount of the debenture on maturity by
issuing that number Class A Shares equal to the quotient obtained
by dividing the applicable portion of the principal amount to be
repaid in Class A Shares by 85% of the volume weighted average
trading price of the Class A Shares during the 20 trading days
ending on the fifth trading day preceding the maturity date. Until
August 31, 2021, the Company will also be entitled to satisfy its
obligation to pay interest by adding the amount of the applicable
interest payment to the principal amount of the debenture. The
interest added to the principal amount of the debenture will be
convertible into Class A Shares in accordance with the conversion
features of the debenture, subject to the requirements of any
regulatory and/or stock exchange or marketplace at the time of
conversion.
Upon the occurrence of a change of control of the Company or the
sale by the Company of its core assets, the Company will be
required to make an offer to purchase the debenture at a price
equal to 105% of the principal amount plus accrued and unpaid
interest.
The investment agreement provides Fengate with certain rights
following closing of the private placement, including a right to
participate in future equity offerings to maintain its pro rata
equity interest, a right of first refusal over certain future debt
financings, a right to nominate one individual to serve on the
Company’s board of directors (or, if such right is not exercised,
the right to designate a board observer) and a demand registration
right to sell all of its Class A Shares. On closing of the private
placement, Fengate will be paid a one-time upfront fee of
$1,500,000.
Advisors
Redbird Sports Group acted as financial advisor to theScore and
PJT Partners acted as financial advisor to Fengate in connection
with this transaction. McCarthy Tétrault LLP and Duane Morris LLP
acted as legal advisors to theScore, and Torys LLP acted as legal
advisor to Fengate in connection with this transaction.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy of this news
release.
The debenture and the Class A Shares issuable upon conversion of
the debenture have not been and will not be registered under the
United States Securities Act of 1933, as amended (the “Securities
Act”) or any applicable securities laws of any state of the United
States and may not offered or sold absent such registration or an
applicable exemption therefrom. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities referenced herein nor may there be any sale of such
securities in any jurisdiction, including in the United States, in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the applicable securities laws
of any such jurisdiction.
About Score Media and Gaming
Inc.
Score Media and Gaming Inc. creates highly-engaging digital
products and content that empower sports fans. Its flagship mobile
app ‘theScore’ is one of the most popular multi-sport news and data
apps in North America, serving millions of fans a month. The
Company also creates innovative digital sports experiences through
its web, social, and esports platforms, and in December 2018
announced plans to launch a mobile sportsbook in the United
States.
About Fengate Asset
Management
Fengate is a leading alternative investment manager, with over
$4 billion of capital commitments under management, focused on
infrastructure, private equity and real estate strategies. With
offices in Toronto, Houston, Vancouver, New York and Oakville,
Fengate leverages more than 45 years of entrepreneurial experience
to deliver excellent investment results on behalf of its clients.
Learn more at fengate.com.
Forward-looking (safe harbour)
statement
Statements made in this news release that relate to future
plans, events or performances are forward-looking statements. Any
statement containing words such as “may”, “would”, “could”, “will”,
“believes”, “plans”, “anticipates”, “estimates”, “expects” or
“intends” and other similar statements which are not historical
facts contained in this release are forward-looking, and these
statements involve risks and uncertainties and are based on current
expectations. Such statements reflect theScore’s current views with
respect to future events and are subject to certain risks,
uncertainties and assumptions. Many factors could cause the
Company’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such forward
looking statements, including among other things, the ability to
satisfy regulatory, stock exchange and commercial closing
conditions of the private placement, the use of the proceeds of the
private placement to significantly enhance theScore’s ability to
execute on its business plan, the timing and success of the launch
of the Company’s sports betting business, receipt by Fengate of
applicable gaming licenses or other approvals of gaming
authorities, the satisfaction of conditions necessary to enable the
Company to issue Class A Shares on conversion of the debenture
(including any required regulatory, stock exchange or marketplace
approvals), and the other matters discussed under the heading “Risk
Factors” in the Company’s Annual Information Form as filed with the
TSX Venture Exchange and available on SEDAR at www.sedar.com and
elsewhere in documents that theScore files from time to time with
securities regulatory authorities. Should one or more of these
risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results could differ materially from the expectations expressed in
these forward-looking statements. The Company does not intend, and
does not assume any obligation, to update these forward-looking
statements except as required by applicable law or regulatory
requirements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190903005324/en/
James Bigg Sr. Manager, Communications theScore, Inc. Tel:
647-638-9281 Email: james.bigg@thescore.com Amy Holmes Vice
President, Marketing and Communications Fengate Asset Management
Tel: +1 647 297 5369 Email: amy.holmes@fengate.com
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