VANCOUVER, British Columbia, April 05, 2019 (GLOBE NEWSWIRE) --
Sale of Fundata Interest
Glacier Media Inc. (“Glacier”) announces the sale of its affiliate’s interest in Fundata Canada Inc. (“Fundata”) for $55 million. The sale was completed through its affiliate GVIC Communications Corp. (“GVIC” or the “Company”).
$45 million of the purchase price was paid at closing and $10 million is payable over four years through a vendor take-back (“VTB”). The VTB is structured such that $2.5 million is to be paid each year subject to certain terms and conditions, and any remaining balance of the $10 million VTB is to be paid in full by the fourth year.
The Company sold its interest for a variety of reasons, including the ability to both reduce leverage and provide capital for acquiring businesses the Company can own and operate directly that fit strategically with its operations in data, analytics and intelligence and digital media.
The purchase price highlights the value of the data, analytics and intelligence products and services the Company owns and is focused on. These products and services provide high value to their users through the nature of their data and functionality, and fulfill a high level of need. They also generate strong recurring revenue and cash flows.
Acquisition of Castanet Media
Glacier is pleased to announce the acquisition of the assets of Castanet Media Ltd. (“Castanet”) that was completed by the Company.
Castanet is the leading source of local media and related information in the Okanagan region of British Columbia, with over 35 million monthly page views.
Castanet is digital only and has been in operation for over 18 years. It has grown steadily over this period in audience, revenue and profitability. It has operations in Kelowna, Penticton and Vernon with over 50 staff. The Penticton and Vernon operations were launched two and three years ago as Castanet scaled and expanded from its original Kelowna market, and have grown significantly since their launch.
Castanet’s growth and market position, as well as the growth of Glacier Digital Media’s operations, demonstrate that a long-term digital business model exists in community media that offers attractive growth in audience development, revenue and profitability.
The Company is building its digital media business through a combination of local community websites, digital marketing services and specialty products & services. The combination of these three offerings allows the Company to develop its own audience and products and satisfy the comprehensive marketing needs of its customers. The ability to offer proprietary products as well as broader marketing services also allows the Company to develop a deeper strategic business relationship with its customers.
The purchase price is $22 million for the Castanet assets and $2 million for the Avenue Radio shares. The acquisition of the Avenue Radio shares is subject to Canadian Radio-television and Telecommunications Commission approval. Avenue Radio operates a radio station in Kelowna. $18.7 million was paid at closing and the remainder is payable over two years. The acquisition was funded through bank borrowings and a $10 million unsecured loan that was arranged from Madison Venture Corporation in order to provide certainty of funding for the acquisition and allow greater financial flexibility compared to increased senior debt borrowing. The loan has a two-year term with an interest rate of 10%, a $200,000 commitment fee on signing and a $175,000 fee on its first anniversary if the loan is still outstanding. In order to be excluded from leverage covenants and provide greater financial flexibility, at the option of the borrower the loan is repayable at maturity by the issuance of 10,980,000 common shares of Glacier at an issue price of $0.751 per share plus the balance of the loan in cash, in the event that the repayment of the loan would create an event of default. Glacier borrowed the funds and loaned the proceeds to GVIC in order to assist the Company with the acquisition. Madison owns 33% of Glacier and is a related party.
The combination of the proceeds from the sale of the interest in Fundata and the unsecured loan will allow lower senior debt levels to be maintained and provide financial flexibility for future strategic acquisition opportunities, particularly in the business information areas the Company operates.
Forward Looking Statements
This news release contains forward-looking statements that relate to, among other things, the Company’s objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates. These forward-looking statements include, among other things, statements relating to the Company’s expectations regarding revenues, expenses, cash flows and future profitability and the effect of Glacier’s strategic initiatives, including its expectations to grow its digital media business, to develop and provide proprietary products and broaden marketing services, to extend its audience and products, to develop strategic business relationships with customers, to generate incremental revenues, to produce products and services that provide growth opportunities, to effect organic development and new business acquisitions or strategic acquisitions, to improve profitability, and to reduce senior debt levels and to have financial flexibility. These forward looking statements are based on certain assumptions, including continued economic growth and recovery and the realization of cost savings in a timely manner and in the expected amounts, and are subject to risks, uncertainties and other factors which may cause results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, and undue reliance should not be placed on such statements.
The forward-looking statements made in this news release relate only to events or information as of the date on which the statements are made. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
For further information please contact Mr. Orest Smysnuik, Chief Financial Officer, at 604-708-3264.