PopReach Enters into Credit Agreement with Bank of Montreal for US$33 Million in Credit Facilities to Refinance Debt and Support Growth English
New Facility is expected to consolidate debt under a single lender, reduce cost of capital, and provide up to an additional US$15 million acquisition line to support execution of the Company's M&A strategy
/NOT FOR DISTRIBUTION TO US WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
TORONTO, April 18, 2022 /CNW/ - PopReach Corporation ("PopReach" or the "Company") (TSXV: POPR) (OTCQX: POPRF) today announced that it has entered into a credit agreement for US$33 million in senior secured credit facilities (the "Facilities") with the Bank of Montreal ("BMO" or the "Lender"). The Facilities, once closed, will consist of a US$8 million revolving facility ("Revolver"), a US$25 million non-revolving term facility ("Term Loan"), and an "accordion" option for up to an additional US$15 million acquisition facility on the Term Loan subject to Lender and other typical approvals discussed below ("Acquisition Line") to support the Company's M&A growth strategy. The Term Loan is intended to be used to refinance approximately US$4.7 million outstanding on the Company's existing senior secured credit facility, as well as US$20.3 million of debt that is expected to be assumed by the Company upon completion of the proposed business combination transaction with Federated Foundry. For additional information on the business combination transaction with Federated Foundry, including assumed debt, please see the Company's management information circular dated February 14, 2022 filed on SEDAR at www.sedar.com as well as the Company's prior press releases of August 17, 2021, October 18, 2021, October 29, 2021, November 29, 2021, February 14, 2022, February 16, 2022 and March 23, 2022.
"These Facilities, once funded, will streamline our balance sheet by consolidating debt and significantly lowering our cost of capital as we combine our business with Federated Foundry. It will also add the sizable Acquisition Line that will provide financial flexibility as we execute on our M&A growth strategy," said Christopher Locke, President and Co-Founder of PopReach. "We understood that our post-RTO scale and improved financial profile would result in greater access to capital on better commercial terms, and we are grateful to have a tier one lender in the Bank of Montreal to support the execution of our vision."
"This is an exciting transaction for PopReach and BMO is pleased to have the opportunity to assist the Company with executing on their growth strategy," said Christopher Jackson, Director, Technology & Innovation Banking Group at BMO Financial Group.
The Facilities will bear interest at a rate of the Lender's U.S. Base Lending Rate, currently 4.00%, plus an applicable margin. The Facilities will amortize monthly beginning the first full quarter post-closing, with repayments of 55% of the amount drawn over a three year period. Interest on the Facilities will be payable monthly in arrears.
The Acquisition Line will allow the Company to request, on 60 days written notice, up to an additional US$15 million on the Term Loan to fund future acquisitions, subject to the Lender's approval, the acquisitions meeting prescribed terms and requirements, and other customary conditions. Prepayments of the Revolver will be permitted without penalty at any time, in whole or in part; prepayments of the Term Loan, in whole or in part, will be permitted without penalty 24 months following close. If the Term Loan is repaid prior to 24 months post-closing, such repayment is subject to a prepayment penalty. The Facilities will be guaranteed by the material subsidiaries of PopReach (including, those to be acquired pursuant to the business combination transaction with Federated Foundry) and secured by a first ranking security interest in favour of the Lender over all of the assets and properties of the Company and the guarantors, subject to customary permitted liens approved by the Lender.
Closing of the Facilities, including funding of the Term Loan, are subject to the completion of the business combination transaction with Federated Foundry, as well as other customary conditions precedent, including the guarantee and security by the material subsidiaries of PopReach (including those to be acquired pursuant to the business combination transaction with Federated Foundry), as well as financial and other covenants.
PopReach, a Tier 1 Issuer on the TSX Venture Exchange, with shares also trading on OTCQX® Best Market, is a free-to-play game publisher focused on acquiring and optimizing proven franchises. The Company has to date acquired successful game franchises enjoyed by millions of players, including Smurfs' Village (IP under license), PAYDAY Crime War (IP under license), Peak - Brain Training, Kitchen Scramble, Gardens of Time, City Girl Life, War of Nations and Kingdoms of Camelot. PopReach, headquartered in Toronto, employs a team of over 130 experts in Toronto, Vancouver, London, UK, and Bangalore, India.
Additional information about the Company is available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular dated February 14, 2022 in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of PopReach should be considered highly speculative.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
This news release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward- looking information generally refers to information about an issuer's business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer's prospective financial performance or financial position.
The forward-looking information in this news release includes disclosure about the terms of the Transaction and the proposed structure of the transaction.
PopReach and Federated made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, or regulatory approvals; and the ability of the resulting issuer to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of PopReach or Federated to complete the transaction on the terms disclosed in this news release, or at all; the unavailability of exemptions from prospectus requirements for the issuance of PopReach shares; the risks associated with the marketing and sale of PopReach shares; refusal of the proposed directors or officers to act for any reason, including conflicts of interest; reliance on key and qualified personnel; and regulatory and other risks associated with the technology, media and digital gaming industries in general. The foregoing list of material risk factors and assumptions is not exhaustive.
PopReach assumes no obligation to update or revise the forward-looking information in this news release, unless it is required to do so under Canadian securities legislation.
SOURCE PopReach Corporation
PopReach Corporation: Dennis Fong, Investor Relations, (416) 283-9930, [email protected]; Christopher Locke, [email protected]
Share this article