TORONTO, July 6, 2018 /CNW/ - Dealnet Capital Corp. ("Dealnet" or the "Company") (TSX VENTURE: DLS), announced today that it has closed the previously announced sale of all of the issued and outstanding shares of Impact Mobile Inc. ("Impact Mobile"), to IMImobile Canada Inc., a wholly-owned subsidiary of IMImobile PLC., for total cash consideration of $27.5 million.
Approximately $25 million of the total consideration was paid on closing with the balance of the purchase price due on January 6, 2019. Concurrent with the closing of the transaction, holders of the Company's $12 million of 6% senior secured debentures (the "Debentures") are being notified that the Debentures will be redeemed in full on July 9, 2018. The Company also announced today that it has redeemed all 10,662 of the recently issued 5% Series A Preferred Shares at their face value of $25.00 per share. The net proceeds from the sale of Impact Mobile, after retiring the senior secured debentures and the Series A Preferred Shares, will be used to fund the growth of the Company's consumer finance business.
"This transformational transaction adds capacity and flexibility to our balance sheet, improves management's ability to focus on our core business and puts the Company back in a position of strength to accelerate the growth of our consumer finance business and achieve profitability by the end of 2018," said Brent Houlden, Dealnet's President and CEO.
When the Company reports its third quarter financial results in mid-November, it expects to post an after-tax gain of approximately $24 million on the transaction which will increase the Company's tangible net worth to approximately $37 million and significantly reduce its leverage ratio.
In conjunction with the repayment of the Debentures, the Company also announces that pursuant to the terms of the common share purchase warrants that were issued with the Debentures, an accelerated expiry date of December 22, 2018 now applies for those applicable warrants.
About Dealnet Capital Corp.
Dealnet is a specialty finance company servicing the $20 billion Canadian home improvement finance market through both dealer-based and direct homeowner-based originations of secured finance assets (equipment leases and loans). The company earns net finance income over the term of these assets and from fee income derived from the transaction support services that it provides to its dealer network. The Company also uses its live engagement platform, One Contact Communications, to provide customer support services on a contract basis to third-party institutions.
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This news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
SOURCE Dealnet Capital Corp.
For further information: Brent Houlden, Chief Executive Officer, (905) 695-8557 ext.1145, [email protected]; John Sadler, Senior Director - Corporate Communications, (905) 695-8557 ext. 1348, [email protected]