DATA Communications Management Corp. Announces Rights Offering to Raise Gross Proceeds of up to $9.3 million
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
BRAMPTON, ON, May 16, 2017 /CNW/ - DATA Communications Management Corp. (TSX: DCM) ("DATA" or the "Company"), announced today that it has filed a rights offering notice and circular in respect of a rights offering (the "Rights Offering") to securityholders to subscribe for common shares of the Company ("Common Shares").
Details of the Rights Offering
The Company is offering a total of 13,260,263 rights ("Rights"). Every two Rights held will entitle an eligible holder of Rights to subscribe for one Common Share at the subscription price of $1.40, which represents a discount of approximately 19.5% to the closing price of the Common Shares on the TSX on May 15, 2017. If all Rights are exercised, holders of Rights will be entitled to subscribe for a total of 6,630,131 Common Shares and the gross proceeds of the Rights Offering will be approximately $9.3 million. The completion of the Rights Offering is not conditional upon the Company receiving any minimum amount of subscriptions for Common Shares.
Under the terms of the Rights Offering, Rights are being offered to eligible holders of DATA's outstanding Common Shares.
Eligible securityholders of record as at 5:00 p.m. (Toronto time) on May 31, 2017 (the "Record Date") will be entitled to participate in the Rights Offering. Eligible holders of Common Shares will receive one Right for each Common Share held. No fractional Rights will be issued.
The Rights will be transferable. The Rights will be listed on the TSX under the symbol "DCM.RT" and will be posted for trading on the TSX until 12:00 p.m. (Toronto time) on June 22, 2017, at which time they will be halted from trading.
The Rights will expire at 5:00 p.m. (Toronto time) (the "Expiry Time") on June 22, 2017. Rights not exercised before the Expiry Time will no longer have any value. If a holder does not exercise the Rights and the Rights Offering is completed, such holder's percentage interest in the Company will be diluted upon the exercise of Rights by other holders. Holders of Rights who wish to exercise their Rights must do so in the manner set forth in the rights offering circular.
DATA has retained Kingsdale Advisors as the information agent in connection with the Rights Offering.
The rights offering notice and rights offering circular containing details of the Rights Offering will be filed on SEDAR at www.sedar.com and on the Company's website at www.datacm.com.
Use of Proceeds
DATA intends to use the net proceeds from the Rights Offering to pay down outstanding borrowings under its revolving credit facility. The Company intends to make additional borrowings under that facility to repay its outstanding 6.00% convertible unsecured subordinated debentures which mature on June 30, 2017 and for working capital needs and general corporate purposes.
"Although our credit facilities should provide the flexibility to fund the repayment of our convertible debentures, the Company has decided to raise equity to reduce financial leverage and enhance its overall financial position to better position DATA to fund organic growth and pursue additional strategic acquisitions," said Michael G. Sifton, CEO.
DATA intends to spend the net proceeds from the Rights Offering as stated above. However, there may be circumstances where a reallocation of those proceeds may be necessary. The Company will reallocate funds only for sound business reasons and in furtherance of its business.
Participation of Insiders
Directors and officers of the Company who currently beneficially own, directly or indirectly, or who have control or direction over 1,756,040 Common Shares (representing approximately 13.2% of the Company's issued and outstanding Common Shares), have indicated that they intend to exercise their subscription privileges to acquire Common Shares representing total subscription proceeds of approximately $1.1 million, which would represent approximately 11.8% of the Rights Offering assuming it is fully subscribed.
No Offering in the United States
Neither the Rights nor the Common Shares issued on exercise of the Rights have been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions, bringing value and collaboration to marketing and operation teams across North America. We help marketers and agencies unify and execute communications campaigns across multiple channels, and we help operations teams streamline and automate document and communications management processes. Our core capabilities include direct marketing, print services, labels and asset tracking, event tickets and gift cards, logistics and fulfilment, content and workflow management, data management and analytics, and regulatory communications. We serve clients in key vertical markets such as financial services, retail, healthcare, lottery and gaming, not‐for‐profit, and energy. We are strategically located across Canada to support clients on a national basis, and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Forward-Looking Statements
Certain statements in this press release constitute "forward‐looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DATA, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward‐looking statements. When used in this press release, words such as "may", "would", "could", "will", "expect", "anticipate", "estimate", "believe", "intend", "plan", and other similar expressions are intended to identify forward‐looking statements. These statements reflect DATA's current views regarding future events and operating performance, are based on information currently available to DATA, and speak only as of the date of this press release. These forward‐looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DATA to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward‐looking statements, including those discussed under "What are the risk factors relating to the Rights Offering and the Common Shares?" in DATA's rights offering circular and in DATA's other publicly available disclosure documents, as filed by DATA on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, DATA does not intend and does not assume any obligation to update these forward‐looking statements.
SOURCE DATA Communications Management Corp.
Mr. Michael G. Sifton, Chief Executive Officer, DATA Communications Management Corp., Tel: (905) 791-3151, Mr. James E. Lorimer, Chief Financial Officer, DATA Communications Management Corp., Tel: (905) 791-3151, [email protected]; Kingsdale Advisors, Information Agent for the Rights Offering, Toll Free: 1-866-581-1570, Tel: (416) 867-2272, [email protected]
Share this article