Constellation Software Inc. (“Constellation”) (TSX:CSU) and its
subsidiary Lumine Group Inc. (“Lumine Group”) announced today they
have completed the previously announced agreement and plan of
merger to purchase (the “Acquisition”) 100% of the shares of
WideOrbit Inc. (“WideOrbit”), a US-based media vertical market
software provider. WideOrbit is now a wholly owned subsidiary of
Lumine Group and will operate as an autonomous business unit within
Lumine Group’s portfolio of companies.
In addition, following payment of
Constellation’s dividend-in-kind, Lumine Group will have been spun
out of Constellation and will operate as a separate public company
(the “Spin-Out”). In connection with the completion of the
Spin-Out, on February 23, 2023 all of Constellation’s common
shareholders of record as at February 16, 2023 will receive, by way
of a dividend-in-kind, 3.0003833 subordinate voting shares of
Lumine Group (“Lumine Shares”) for each common share of
Constellation held.
The Lumine Shares have been conditionally
approved for listing on the TSX Venture Exchange, subject to Lumine
Group’s fulfillment of final listing requirements. Trading of the
Lumine Shares on the TSX Venture Exchange is expected to begin on
or about March 24, 2023 under the symbol “LMN”.
Following the acquisition closing, Eric
Mathewson, Founder and Chief Executive Officer of WideOrbit, joined
the Board of Directors of Lumine Group as a Director. Mr. Mathewson
founded WideOrbit in 1999 after realizing that there was an
opportunity to streamline and automate the buying and selling of
media. Prior to founding WideOrbit, Mr. Mathewson worked at
Montgomery Securities in San Francisco and New York, managing
portfolios for wealthy technologists as well as Kidder Peabody in
Palo Alto, primarily focused on Equity Derivatives. Mr. Mathewson
has been an active private equity technology investor since 1994
and, prior to the acquisition closing, had controlling ownership of
WideOrbit. WideOrbit serves as the system of record for more than
5,000 stations and cable networks worldwide processing more than
$35 billion in advertising revenue annually.
David Nyland, Chief Executive Officer of Lumine
Group commented: “We are thrilled that the acquisition of WideOrbit
is complete. For years, Lumine has been building a global network
of communications and media software companies who are continuously
learning, innovating, and enhancing their value to customers. We
celebrate the presence we have established in the communications
space, and now, with WideOrbit, we will accelerate our presence and
domain expertise in the media space. We look forward to working
closely with the WideOrbit team to continue to execute the best
practices that have built an impressive business over the last two
decades. I am inspired and motivated by the opportunities our
combined organization will bring to current and future Lumine Group
companies, customers, and employees. As well, I look forward to
connecting with media software companies who are interested in
learning about a future with Lumine Group.”
Eric Mathewson, Founder & CEO of WideOrbit
commented: "Today's announcement marks an exciting moment in
WideOrbit's 20+ year journey. Merging with Lumine Group means
joining an ecosystem of media & communications software domain
experts, a network of global customers, and exposure to decades
worth of operational excellence. Together, our combined
organizations and experience in the media & communications
space are well positioned to be a positive force for employees,
customers, and the industry at large. I look forward to bringing
20+ years of learnings from operating and growing WideOrbit to
Lumine Group to navigate the future of media and deepen Lumine
Group's presence in the media space.”
Mark Miller, Chairman of the Board of Lumine
Group and Volaris Group CEO commented: “Lumine Group is a
compelling force in media and communications technology and today’s
news further reinforces this position. We have consistently created
opportunities for leading software businesses and teams to do their
best work at Lumine Group and I know that David and his team will
continue with this legacy of growth, learning, talent development,
and operational excellence.”
Early Warning Reporting
Disclosure
In connection with the Acquisition, each of Eric
Mathewson and certain of his affiliates (the “Majority Special
Shareholders”) and Constellation will file early warning reports in
respect of their ownership of the Lumine Shares, and/or their
ownership of special shares of Lumine Group (“Special Shares”),
which are convertible into Lumine Shares on the basis of 3.4302106
Lumine Shares per Special Share (as such ratio may be adjusted from
time to time as permitted by and in accordance with the articles of
amalgamation of Lumine Group). The head office of Lumine Group is
located at 5060 Spectrum Way, Mississauga, Ontario, Canada. Copies
of the early warning reports will be available on SEDAR.
Constellation’s address is 20 Adelaide Street
East, Suite 1200, Toronto, Ontario. Prior to the Spin-Out,
Constellation, through its subsidiary Trapeze Software ULC
(“Trapeze”), owned 1 common share of Lumine Group, representing
100% of the then issued and outstanding securities of Lumine Group.
Following the Spin-Out, Constellation directly or indirectly,
through Trapeze, will own 6 Lumine Shares (representing 0.000009%
of the issued and outstanding Lumine Shares), 1 super voting share
of Lumine Group (representing 100% of the outstanding super voting
shares of Lumine Group) and 63,582,712 preferred shares of Lumine
Group (representing 100% of the outstanding preferred shares of
Lumine Group). The super voting share held by Constellation is
convertible into Lumine Shares on a one for one basis. The
preferred shares held by Constellation are convertible into Lumine
Shares at a ratio of 2.4302106 Lumine Shares for every preferred
share. Constellation’s ownership of Lumine Shares is 61.05% on a
fully-diluted basis (based on 253,104,971 Lumine Shares issued and
outstanding on a fully-diluted basis) and 70.8% of the Lumine
Shares on a partially-diluted basis (based on 63,582,712 currently
issued and outstanding Lumine Shares plus 154,519,380 Lumine Shares
issuable upon the conversion of the 63,582,712 preferred shares of
Lumine Group held by Constellation). Constellation acquired the
securities of Lumine Group as part of the Spin-Out. Constellation
may purchase or sell securities of Lumine Group in the future on
the open market or in private transactions, depending on market and
economic conditions and other factors material to the investment
decisions of Constellation.
The Majority Special Shareholders’ address is
1160 Battery Street, Suite 300, San Francisco, California 94111.
Prior to the Acquisition, the Majority Special Shareholders owned
no shares of Lumine Group, or securities exchangeable for
securities of Lumine Group. Following the Acquisition, the Majority
Special Shareholders acquired 8,587,417 Special Shares,
representing approximately 84.2% of the Special Shares of Lumine
Group (based on 10,204,294 issued and outstanding Special Shares).
The Special Shares are convertible into Lumine Shares at a ratio of
3.4302106 Lumine Shares for every Special Share. The Majority
Special Shareholders’ ownership of 8,587,417 Lumine Shares, which
are convertible into 29,456,648 Lumine Shares, represents
approximately 11.6% of the Lumine Shares on a fully-diluted basis
(based on 253,104,971 Lumine Shares issued and outstanding on a
fully-diluted basis) and 31.7% of the Lumine Shares on a
partially-diluted basis (based on 63,582,712 currently issued and
outstanding Lumine Shares plus 29,456,648 Lumine Shares issuable
upon the conversion of the 8,587,417 Special Shares held by the
Majority Special Shareholders). The Majority Special Shareholders
acquired the Special Shares as part of the Acquisition. The Special
Shares, and any Lumine Shares issued to the Majority Special
Shareholders on exchange of the Special Shares, will be held for
investment purposes. Depending on various factors they may deem
relevant, including, without limiting the generality of the
foregoing, market conditions, general economic and industry
conditions and Lumine Group’s business and financial condition, the
Majority Special Shareholders may take such actions from time to
time with respect to their investment in Lumine Group as they deem
appropriate.
Following the Spin-Out, on a fully diluted
basis, there will be 253,104,971 Lumine Shares issued and
outstanding.
Forward Looking Statements
Certain statements herein may be “forward
looking” statements that involve known and unknown risks,
uncertainties and other factors that may cause the actual events to
be materially different from any future events expressed or implied
by such forward -looking statements. Words such as “may”, “will”,
“expect”, “believe”, “plan”, “intend”, “should”, “anticipate” and
other similar terminology are intended to identify forward looking
statements. Forward looking statements in this press release
include, but are not limited to, the intention for the Lumine Group
shares to begin trading on the TSX Venture Exchange on or about
March 24, 2023. Such forward looking statements involve significant
risks and uncertainties, should not be read as guarantees of future
results, and will not necessarily be accurate indications of
whether or not such results will be achieved, or when such results
will be achieved. A number of factors could cause actual results to
vary significantly from the results discussed in the forward
looking statements. These forward looking statements reflect
current assumptions and expectations regarding future events and
are made as of the date hereof and Constellation assumes no
obligation, except as required by law, to update any forward
looking statements to reflect new events or circumstances.
About Lumine
GroupLumine Group acquires, strengthens, and grows
vertical market software businesses in the Communications and Media
industry. Learn more at www.luminegroup.com.
About
WideOrbitWideOrbit helps media companies do more
business by making it easier to buy and sell advertising. WideOrbit
is headquartered in San Francisco, USA. Learn more at
www.wideorbit.com.
About Constellation Software
Inc.Constellation acquires, manages and builds vertical
market software businesses that provide mission-critical software
solutions.
For further information,
contact:
Constellation Software Inc.Jamal Baksh, Chief
Financial Officerjbaksh@csisoftware.com www.csisoftware.com
Lumine GroupDavid Nyland, Chief Executive
Officerdavid.nyland@luminegroup.com www.luminegroup.com
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