CDPQ, IQ and Fonds de solidarité invest $65M, part of Stingray’s $138M acquisition financing

Stingray Digital Group Inc. (TSX: RAY.A; RAY.B) has closed previously announced subscription receipt offerings, raising $138 million in gross proceeds with $65 million from Caisse de dépôt et placement du Québec (CDPQ), Investissement Québec (IQ) and Fonds de solidarité FTQ.

Stingray issued 7,981,000 subscription receipts from treasury at a price of $10.40 per subscription receipt, on a bought deal basis, for aggregate gross proceeds of approximately $83 million, through a syndicate of underwriters co-led by National Bank Financial Inc. and BMO Capital Markets.

Stingray issued 3,846,100 subscription receipts to an affiliate of CDPQ for aggregate gross proceeds of approximately $40 million.

8978832 Canada Inc., a member of the Boyko Group and a holder of multiple voting shares of Stingray, exercised subscription rights attached to the multiple voting shares of Stingray and subscribed for 1,452,850 subscription receipts for aggregate gross proceeds of approximately $15 million.

The Pre-emptive Rights Exercise was funded by Investissement Québec and Fonds de solidarité through follow-on investments in the share capital of 8978832 Canada Inc.

Stingray will use the proceeds of the offerings, funds drawn on new credit facilities and cash on hand to finance the purchase price and related transaction and financing costs payable in connection with the previously announced acquisition of Newfoundland Capital Corporation Limited and the repayment of an existing credit facility.

photo crecdit: Newfoundland Capital Corporation

News Release

Stingray Closes $138 Million Offerings of Subscription Receipts

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Montréal, May 23, 2018 – Stingray Digital Group Inc. (“Stingray”) (TSX: RAY.A; RAY.B) today announced that it has completed its previously announced subscription receipt offerings for aggregate gross proceeds of approximately $138 million.

Public Offering of Subscription Receipts on a Bought Deal Basis

Stingray issued 7,981,000 subscription receipts (the “Public Subscription Receipts”) from treasury at a price of $10.40 per Public Subscription Receipt, on a bought deal basis, for aggregate gross proceeds of approximately $83 million (the “Public Offering”), through a syndicate of underwriters (the “Underwriters”) co-led by National Bank Financial Inc. and BMO Capital Markets.

Stingray has granted the Underwriters an option (the “Over-Allotment Option”) to purchase up to an additional 1,197,150 Public Subscription Receipts at any time up to 30 days after closing of the Public Offering for additional gross proceeds of up to $12 million.

Each Public Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, either one subordinate voting share of Stingray or one variable subordinate voting share of Stingray, depending on whether the holder is a “Canadian” under the Broadcasting Act (Canada).

The Public Subscription Receipts will commence trading today on the Toronto Stock Exchange (TSX) under the symbols RAY.R and RAY.N.

Private Placement of Subscription Receipts

Concurrently with the closing of the Public Offering, Stingray has issued 3,846,100 subscription receipts (the “Private Placement Subscription Receipts”) from treasury at a price of $10.40 per Private Placement Subscription Receipt to an affiliate of Caisse de dépôt et placement du Québec (“La Caisse”) for aggregate gross proceeds of approximately $40 million (the “Concurrent Private Placement”).

La Caisse is entitled to purchase up to an additional 576,915 Private Placement Subscription Receipts if and when the Over-Allotment Option is exercised by the Underwriters, for additional gross proceeds of up to $6 million.

Each Private Placement Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, one subordinate voting share of Stingray.

The Private Placement Subscription Receipts are subject to a four month hold from the closing date of the Concurrent Private Placement.

Exercise of Subscription Rights

As a result of the Public Offering and the Concurrent Private Placement, 8978832 Canada Inc., a member of the Boyko Group and a holder of multiple voting shares of Stingray, has exercised subscription rights attached to the multiple voting shares of Stingray and subscribed for 1,452,850 subscription receipts (the “Pre-emptive Subscription Receipts”) from treasury at a price of $10.40 per Pre-emptive Subscription Receipt for aggregate gross proceeds of approximately $15 million (the “Pre-emptive Rights Exercise” and, together with the Public Offering and the Concurrent Private Placement, collectively the “Offerings”).

Each Pre-emptive Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, one multiple voting share of Stingray.

The Pre-emptive Rights Exercise was funded by Investissement Québec and Le Fonds de solidarité FTQ through follow-on investments in the share capital of 8978832 Canada Inc.
The Pre-emptive Subscription Receipts are subject to a four month hold from the closing date of the Pre-emptive Rights Exercise.

Stingray will use the proceeds of the Offerings, funds drawn on new credit facilities and cash on hand to finance (i) the purchase price and related transaction and financing costs payable in connection with the previously announced acquisition of Newfoundland Capital Corporation Limited (the “Acquisition”) and (ii) the repayment of an existing credit facility.

Advisors

National Bank Financial Inc. and BMO Capital Markets are acting as Joint Bookrunners on the Public Offering. Legal advice is being provided to Stingray by Davies Ward Phillips & Vineberg LLP. Legal advice is being provided to the Underwriters and to La Caisse by Fasken Martineau Dumoulin LLP and McCarthy Tétrault LLP, respectively.

Availability of Documents

Copies of related documents, such as the final short form prospectus and the underwriting agreement relating to the Public Offering, the subscription agreement entered into in connection with the Concurrent Private Placement, the various subscription receipt agreements relating to the Offerings, and the arrangement agreement entered into in connection with the Acquisition are or will be available on SEDAR (www.sedar.com) as part of the public filings of Stingray and on Stingray’s website at www.stingray.com

About Stingray Digital Group Inc.

Stingray Digital Group Inc. (TSX: RAY.A; RAY.B) is the world-leading provider of multiplatform music and video services, and digital experiences for pay TV operators, commercial establishments, OTT providers, mobile operators, consumers, and more. Its services include audio television channels, premium television channels, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps. Stingray reaches 400 million subscribers (or users) in 156 countries and its mobile apps have been downloaded over 90 million times. Stingray is headquartered in Montreal and currently has close to 400 employees worldwide. For more information: www.stingray.com.

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For more information, please contact:
Mathieu Péloquin
Senior Vice-President, Marketing and Communications
Stingray Digital Group Inc.
1 514-664-1244, ext. 2362
mpeloquin@stingray.com


Ted Liu
Ted Liu, M.Sc. (Mining), MBA (Finance), is the Editor of Private Capital Journal, TechnologyMetals.ca, GoldSilverMetals.ca, and former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA). Ted was the architect of CVCA infobase, and is the architect of sophisticated and advanced CPE Media Private Capital Dealbase. Ted is President of CPE Media Inc., Canada's independent, trusted and unbiased data provider tracking Canadian VC/PE, private capital industry and public market.
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