CPE News (1/20/2021) – Enthusiast Gaming Holdings Inc. (TSX: EGLX; OTCQB: ENGMF; FSE: 2AV) has upsized its previously announced bought deal financing, selling 8,870,000 common shares at $5.75 per share for gross proceeds of approximately $51 million.
6,420,000 shares will be issued from treasury by Enthusiast Gaming for gross proceeds of approximately $36.9 million and 2,450,000 shares will be offered by Blue Ant Media Inc. for aggregate gross proceeds of approximately $14.1 million.
Enthusiast Gaming Holdings and Blue Ant Media have also granted the underwriters an over–allotment option, is exercised in full, for aggregate gross proceeds of the treasury Offering and secondary offering of approximately $42.5 million and $16.2 million, respectively.
On August 30, 2020, Enthusiast Gaming acquired 100% of the issued and outstanding shares of Omnia Media Inc. from Blue Ant for consideration consisting of 18.25 million shares (at deemed price of $1.65), $11.0 million in cash, and a vendor-take-back note with a face value of $5.75 million for aggregate consideration of $46 million.
Following the closing of the offering and assuming full exercise of over-allotment option, Blue Ant Media will remain as the single largest shareholder holding 15,432,500 shares (13.9%).
Blue Ant Media is principally backed by Fairfax Financial Holdings Limited (TSX: FFH, FFH.U) and Torstar Corporation. Its investors also include Relay Ventures, Kensington Capital Partners.
photo credit: Enthusiast Gaming
News Release
Enthusiast Gaming Holdings Inc. Announces Upsize to Previously Announced Bought Deal Financing
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Jan. 20, 2021 /CNW/ – Enthusiast Gaming Holdings Inc. (“Enthusiast” or the “Company”) (TSX: EGLX) (OTCQB: ENGMF) (FSE: 2AV) is pleased to announce that the Company has upsized its previously announced bought deal financing pursuant to an amended agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (the “Underwriters”). Pursuant to the terms of the amended agreement, the Underwriters have agreed to purchase on a bought deal basis an aggregate, 8,870,000 common shares (the “Shares”) of Enthusiast Gaming, at a price of $5.75 per Share (the “Offering Price”) for total gross proceeds of approximately $51 million. Of the aggregate 8,870,00 Shares being offered, 6,420,000 Shares will be issued from treasury by Enthusiast Gaming for gross proceeds of approximately $36.9 million (the “Treasury Offering”) and 2,450,000 Shares will be offered by Blue Ant Media Inc. (the “Selling Shareholder”) for aggregate gross proceeds to the Selling Shareholder of approximately $14.1 million (the “Secondary Offering”, or together with the Treasury Offering, the “Offering”). The Selling Shareholder is selling approximately 13.4% of its holdings of Enthusiast Gaming, and will continue after the Offering to retain a substantial interest in the Company. The Selling Shareholder is not participating in the upsize portion of the Offering and all the incremental proceeds will go to the Company.
In addition, the Company and the Selling Shareholder have also granted the Underwriters an over–allotment option (the “Option”) to purchase, any time up to the date that is 30 days following the closing of the Offering, up to an additional 1,330,500 Shares (representing 15% of the base Offering) at the Offering Price exercisable in whole or in part for a period of 30 days following the closing of the Offering. The Option, if exercised, will be satisfied pro rata by the Company and the Selling Shareholder. If the Option is exercised in full, the aggregate gross proceeds of the Treasury Offering and Secondary Offering will be approximately $42.5 million and $16.2 million, respectively.
The net proceeds from the Treasury Offering are expected to be used for future acquisitions, working capital and general corporate purposes. The Company will not receive any proceeds from the sale of common shares associated with the Secondary Offering.
The Offering is expected to close on or about February 10, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including approval of the TSX.
The Shares to be issued under the Offering will be offered by way of a short form prospectus in each of the Provinces of Canada (other than Quebec) under National Instrument 44-101 – Short Form Prospectus Distributions and may be offered outside of Canada on a private placement basis in sales exempt from applicable prospectus and/or registration requirements. Additional details concerning the Offering will be contained in the short form prospectus.
The Shares of the Company, including securities offered, have not been and will not be registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”), as amended, or applicable state securities laws, and the securities offered may not be offered or sold in the United States, absent registration or an applicable exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Offered Shares. The offering or sale of the Offered Shares shall not be made in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Enthusiast Gaming
Enthusiast Gaming is building the world’s largest social network of communities for gamers and esports fans that reaches over 300 million gaming enthusiasts on a monthly basis. Already the largest gaming platform in North America and the United Kingdom, the Company’s business is comprised of four main pillars: Esports, Content, Talent and Entertainment. Enthusiast Gaming’s esports division, Luminosity Gaming, is a leading global esports franchise that consists of 7 professional esports teams under ownership and management, including the Vancouver Titans Overwatch team and the Seattle Surge Call of Duty team. Enthusiast’s gaming content division includes 2 of the top 20 gaming media and entertainment video brands with BCC Gaming and Arcade Cloud, reaching more than 50MM unique viewers a month across 9 YouTube pages, 8 Snapchat shows and related Facebook, Instagram and TikTok accounts. Its 100 gaming-related websites including The Sims Resource, Destructoid, and The Escapist collectively generate 1.1 billion page views monthly. Enthusiast’s talent division works with nearly 1,000 YouTube creators generating nearly 3 billion views a month working with leading gamer talent such as Pokimane, Flamingo, Anomaly, and The Sidemen. Enthusiast’s entertainment business includes Canada’s largest gaming expo, EGLX (eglx.com), and the largest mobile gaming event in Europe, Pocket Gamer Connects (pgconnects.com). For more information on the Company visit enthusiastgaming.com. For more information on Luminosity Gaming visit luminosity.gg.
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Enthusiast Gaming
For further information: Investor Relations Contact: Eric Bernofsky, Chief Corporate Officer, press@enthusiastgaming.com