TORONTO, July 3, 2018 /CNW/ - Dealnet Capital
Corp. ("Dealnet" or the "Company") (TSX VENTURE: DLS), announced
today that it has signed a binding agreement to sell all of the
issued and outstanding shares of Impact Mobile Inc. ("Impact
Mobile"), the Company's wholly-owned mobile messaging business, for
total cash consideration of $27.5
million to IMImobile Canada Inc., a wholly-owned subsidiary
of IMImobile PLC.
Approximately $25 million of the
total consideration is payable on the closing of the transaction,
which is expected to be before July 19,
2018. The balance of the purchase price is due six months
from the closing date. On closing of the transaction, the Company's
$12 million of senior secured
debentures will be redeemed in full.
"IMImobile is the ideal home for Impact Mobile as the two
companies operate complementary businesses and together can be
expected to leverage their respective messaging capabilities and
technologies. We wish our colleagues at Impact Mobile great
success as they join the IMImobile family," said Brent Houlden, Dealnet's President and CEO.
In early 2018, Delanet Capital made a strategic decision to
focus on its core consumer finance business and to monetarize its
investment in Impact Mobile. The net proceeds from the sale of
Impact Mobile, after retiring the senior secured debentures, will
be used to fund the growth of the Company's consumer finance
business.
"This transaction is transformational for Dealnet as it 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," added Mr. Houlden.
The Company expects to report 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. The Company's post-closing balance sheet will
fully support the Company's aggressive growth targets.
The Company retained a financial advisor to assist with the sale
process for Impact Mobile. The financial advisor will be entitled
to a transaction fee of $825,000.
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.
For additional information please visit www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward-looking Statements
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.