VANCOUVER, April 15, 2019 /PRNewswire/ - Mogo Finance
Technology Inc. (TSX:MOGO) (NASDAQ: MOGO) ("Mogo") is pleased
to announce the signing of a definitive arrangement agreement (the
"Arrangement Agreement") to merge Mogo (the "Transaction") by way
of a plan of arrangement with Difference Capital Financial Inc.
(TSX:DCF) ("Difference"). Following the combination, the resulting
company (the "Combined Entity") is expected to be named 'Mogo
Inc.'.
Under the terms of the Arrangement Agreement, each common share
of Mogo (a "Mogo Share") will be exchanged for one (the
"Exchange Ratio") Difference common share (a "Difference Share").
Upon completion of the Transaction, former Mogo shareholders will
own approximately 80% of the Combined Entity on a fully diluted
basis. Following completion of the Transaction, all of Mogo's
outstanding convertible securities will become exercisable or
convertible, as the case may be, for shares of the Combined Entity
in accordance with the Exchange Ratio.
The Transaction is subject to Mogo shareholder approval,
regulatory approval and satisfaction of other customary conditions.
The Transaction is expected to close in the second quarter of
2019.
Transaction Highlights
- Following the combination, the Combined Entity is expected to
be named 'Mogo Inc.'. Mogo shareholders will own approximately 80%
of the Combined Entity and Dave
Feller will be Chairman and CEO and Greg Feller will be President, CFO and Director
of the Combined Entity.
- The Combined Entity will continue to execute on Mogo's vision
of building the leading fintech platform in Canada. The combination will give Mogo
immediate access to approximately $9
- $10 million in cash, which reflects
proceeds from Difference's two recently announced monetizations. In
addition, Mogo will have control of Difference's portfolio of
investments in some of the premier private technology companies in
Canada, including Hootsuite and
Vision Critical, which collectively have an estimated fair market
value of approximately $24
million.
- The Transaction has received the unanimous recommendation of
both Mogo's and Difference's special committees and respective
boards of directors, with voting and support agreements
representing approximately 21.8% of outstanding Mogo Shares and
approximately 49.8% of outstanding Difference Shares executed in
support of the Transaction.
"This transaction enables Mogo to continue to invest in new
products and innovation, building on our leadership position in the
Canadian fintech space," said David
Feller, Mogo's Founder and CEO. "We are excited by the
opportunity that the Transaction presents for shareholders of Mogo
and Difference and are very pleased to have the support of
the Difference board. We look forward to working closely with
the leadership team at Difference to complete the Transaction."
"The merger with Difference strengthens our financial position
and represents a significant opportunity to create value for
shareholders of the combined entity," added Greg Feller, Mogo's President. "Difference has
invested in many of Canada's
leading technology companies and Mogo has built a valuable
distribution platform. Shareholders of both companies will benefit
from improved financial flexibility as we execute on our strategy
of partnering to bring best-in-class products to our more than
800,000 members."
Transaction Summary
The proposed transaction will be completed pursuant to a plan of
arrangement under the Business Corporations Act
(British Columbia) and, in
addition to other customary closing conditions, is subject to
regulatory and court approvals. The Transaction will need to be
approved by: (i) two-thirds of the votes cast by Mogo shareholders
at its shareholder meeting; and (ii) if required, a simple majority
of the votes cast by Mogo shareholders at its shareholder meeting,
excluding the votes held by certain persons as required by
Multilateral Instrument 61-101. The directors and certain
shareholders of Mogo, representing approximately 21.8% of Mogo's
outstanding shares, have entered into support agreements pursuant
to which they agreed to vote their Mogo Shares in favor of the
Transaction.
The annual general and special meeting of Mogo is expected to be
held in June 2019. An information
circular detailing the terms and conditions of the Transaction will
be filed with regulatory authorities and mailed to the shareholders
of Mogo in accordance with applicable securities laws. The
Arrangement Agreement includes customary deal-protection
provisions, including non-solicitation of alternative transactions
and break fees payable by Mogo and Difference, respectively, under
certain circumstances.
Mogo's Board of Directors and Special Committee have determined
that the proposed transaction is in the best interest of the
shareholders, having taken into account advice from their financial
advisors, and have unanimously approved the Transaction. Mogo's
Board of Directors recommends that their shareholders vote in favor
of the proposed transaction.
Advisors and Counsel
Mogo's financial advisor is Raymond James Ltd. and its legal
counsel in Canada is Stikeman
Elliott LLP. Raymond James Ltd. provided an opinion to Mogo's Board
of Directors that, as of the date thereof and subject to the
assumptions, limitations and qualifications set out therein, the
transaction is fair, from a financial point of view, to the
shareholders of Mogo.
About Mogo
Mogo (TSX: MOGO; NASDAQ: MOGO) — a financial technology company
— is a digital challenger to the banks in Canada, empowering consumers with simple
solutions to help them manage and control their finances. Users can
sign up for a free MogoAccount in only three minutes and get access
to six products including free credit score monitoring, identity
fraud protection, digital spending account with Platinum Prepaid
Visa® Card, digital mortgage experience, the MogoCrypto account,
the first product within MogoWealth, which enables the buying and
selling of bitcoin, and access to smart consumer credit products
through MogoMoney. The platform has been engineered to deliver a
best-in-class digital experience, with best-in-class financial
products all through one account. With more than 800,000 members
and a marketing partnership with Canada's largest news media company, Mogo
continues to execute on its vision of becoming the go-to financial
app for the next generation of Canadians. To learn more, please
visit mogo.ca or download the mobile app (iOS or Android).
Mogo Cautionary Statement
This news release may contain "forward-looking statements" that
relate to Mogo's current expectations and views of future events.
In some cases, these forward-looking statements can be identified
by words or phrases such as "may", "might", "will", "expect",
"anticipate", "estimate", "intend", "plan", "indicate", "seek",
"believe", "predict" or "likely", or the negative of these terms,
or other similar expressions intended to identify forward-looking
statements. Mogo has based these forward-looking statements on its
current expectations and projections about future events that it
believes might affect its financial condition, results of
operations, business strategy and financial needs. These
forward-looking statements include, among other things, statements
relating to completion of the Transaction, receipt of required
shareholder and regulatory approvals for the Transaction, court
approval of the Arrangement, the holding of the Mogo shareholder
meeting and the mailing of the Mogo circular, composition of the
Combined Entity and the value of the investment portfolio of
Difference.
Forward-looking statements are based on certain assumptions and
analyses made by Mogo in light of the experience and perception of
historical trends, current conditions and expected future
developments and other factors it believes are appropriate, and are
subject to risks and uncertainties. Although we believe that the
assumptions underlying these statements are reasonable, they may
prove to be incorrect, and we cannot assure that actual results
will be consistent with these forward-looking statements. Given
these risks, uncertainties and assumptions, any investors or users
of this document should not place undue reliance on these
forward-looking statements.
The forward-looking statements made in this news release relate
only to events or information as of the date of this news release
and are expressly qualified in their entirety by this cautionary
statement. Except as required by law, we do not assume any
obligation to update or revise any of these forward-looking
statements to reflect events or circumstances after the date of
this news release, including the occurrence of unanticipated
events. An investor should read this news release with the
understanding that our actual future results may be materially
different from what we expect.
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SOURCE Mogo Finance Technology Inc