illumin Holdings Inc. (TSX:ILLM, Nasdaq:ILLM) (“illumin” or
the “Corporation”) today announces its launch of a
substantial issuer bid and intention to delist from The Nasdaq
Stock Market (“
Nasdaq"). As a result of the fact
that the substantial issuer bid will be outstanding following the
end of the fiscal quarter ending June 30, 2023 but prior to the
public release of the financial results for that period, the
Corporation is also providing guidance with respect to its second
quarter financial results. These financial results are scheduled to
be released on August 10, 2023.
Substantial Issuer Bid
The Corporation’s board of directors has
authorized a substantial issuer bid (the “Offer”)
to purchase for cancellation up to 15,810,276 of its common shares
(“Shares”) for an aggregate purchase price not to
exceed Cdn$40,000,000. The Offer commences on July 27, 2023 and
will expire at 5:00 p.m. (Eastern Time) on August 30, 2023, unless
extended or withdrawn.
The Offer is being made by way of a “Dutch
Auction”, allowing shareholders who choose to participate in the
Offer to individually select the price, within a price range of not
less than Cdn$2.53 per Share and not more than Cdn$2.65 per Share
(in increments of Cdn$0.01 per Share), at which they will tender
their Shares to the Offer. Upon expiry of the Offer, illumin will
determine the lowest purchase price (which will not be more than
Cdn$2.65 per Share and not less than Cdn$2.53 per Share) that will
allow it to purchase the maximum number of Shares properly tendered
to the Offer, and not properly withdrawn, having an aggregate
purchase price not exceeding Cdn$40,000,000.
Shareholders who wish to participate in the
Offer will be able to do so through: (i) an auction tender, in
which they will specify the number of Shares being tendered at a
specific price per Share; or (ii) a purchase price tender, in which
they will agree to have a specified number of Shares purchased at
the purchase price to be determined pursuant to the auction and
have their Shares considered as having been tendered at the minimum
price of Cdn$2.53 for the purposes of determining the purchase
price. Shareholders who validly deposit Shares without specifying
the method in which they are tendering their Shares will be deemed
to have made a purchase price tender, understanding that those
Shares will be considered to have been tendered at the minimum
price of Cdn$2.53 per Share.
All Shares tendered at or below the finally
determined purchase price will be purchased, subject to proration
and “odd lot” priority, at the same purchase price determined
pursuant to the terms of the Offer. Shares that are not purchased,
including Shares tendered pursuant to auction tenders at prices
above the purchase price, will be returned to shareholders.
The Offer is not conditional on receipt of
financing or upon any minimum number of Shares being tendered, but
it is subject to certain other conditions. A complete description
of the terms and conditions of the Offer will be contained in the
offer to purchase, the issuer bid circular, and related documents.
illumin intends to fund any purchases of Shares pursuant to the
Offer from cash on hand.
The Corporation has engaged Canaccord Genuity
Corp. (“Canaccord Genuity”) and Canaccord Genuity
LLC to act as dealer managers (the “Dealer
Managers”) for the Offer and TSX Trust Company to act as
depositary (the “Depositary”). Any questions or
requests for information regarding the Offer may also be directed
to the Dealer Managers or the Depositary. The Corporation has also
engaged Canaccord Genuity to act as financial advisor and has
obtained a liquidity opinion from Canaccord Genuity to be included
in the Offer documents, which will be made available under the
Corporation’s SEDAR+ profile at www.sedarplus.com, and on United
States Securities and Exchange Commission (the
“SEC”) at www.sec.gov.
The Board of Directors of illumin has approved
the Offer; however, none of illumin, its Board of Directors, the
Dealer Managers or the Depositary makes any recommendation to
shareholders as to whether to tender or refrain from tendering any
or all of their Shares pursuant to the Offer, whether shareholders
should elect an auction tender or a purchase price tender or the
purchase price or prices at which shareholders may choose to tender
Shares.
This news release is for informational purposes
only and is not intended to and does not constitute an offer to
purchase or the solicitation of an offer to sell illumin’s Shares.
The solicitation and the Offer will be made only pursuant to Offer
documents filed with securities regulatory authorities. On July 27,
2023, a tender offer statement on Schedule TO, including an offer
to purchase, a letter of transmittal and related documents, will be
filed by illumin with the SEC, and a separate issuer bid circular,
letter of transmittal and related documents will be filed by
illumin with Canadian securities regulatory authorities. The Offer
will not be made to, nor will tenders be accepted from or on behalf
of, holders of Shares in any jurisdiction in which the making or
acceptance of offers to sell Shares would not be in compliance with
the laws of that jurisdiction.
SHAREHOLDERS ARE STRONGLY URGED TO CAREFULLY
READ THE TENDER OFFER STATEMENT REGARDING THE OFFER, OFFER TO
PURCHASE, ISSUER BID CIRCULAR, THE LETTER OF TRANSMITTAL AND
RELATED DOCUMENTS FILED WITH SECURITIES REGULATORY AUTHORITIES, AS
THEY MAY BE AMENDED FROM TIME TO TIME, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Shareholders may obtain free copies of the
offer to purchase, issuer bid circular, the letter of transmittal
and related documents filed with the SEC at the website maintained
by the SEC at www.sec.gov or with Canadian securities regulatory
authorities under the Corporation’s SEDAR+ profile at
www.sedarplus.com, (in each case, when available). Shareholders may
also obtain those materials from TSX Trust Company, the depositary
for the Offer. Shareholders are urged to read those materials and
evaluate carefully all information related to the Offer, consult
their own financial, legal, investment and tax advisors and make
their own decisions as to whether to deposit Shares pursuant to the
Offer and, if so, how many Shares to deposit and at what price.
Intention to Voluntarily Delist from
Nasdaq
The Corporation has re-evaluated the continued
benefits and costs of its listing on Nasdaq and has concluded that
it is appropriate to delist from Nasdaq as soon as practical
following the expiry of the Offer.
The reasons for this decision include the
relatively high insurance, accounting, legal and compliance costs
that are associated with a continued U.S. stock exchange listing,
and the fact that the Corporation has not attracted a significant
number of long-term U.S. institutional shareholders through its
Nasdaq listing. It is also relevant that the Corporation does not
have any plans to raise additional capital, which a U.S. listing
could facilitate, in the short to medium-term.
While this decision to delist from Nasdaq is not
conditional on the making or the success of the Offer, the Offer
provides U.S. Shareholders with an opportunity for liquidity at a
premium well in advance of such delisting from Nasdaq. In the event
that the Corporation delists from Nasdaq, the Corporation’s Shares
will continue to trade on the Toronto Stock Exchange.
Fiscal Q2 Guidance
Since the Offer will be outstanding, in part,
after the end of the Corporation’s fiscal quarter for the three and
six months ending June 30, 2023, but before the release of the
financial results and accompanying management discussion and
analysis for that period, the Corporation is providing guidance
with respect to its financial results for Q2 2023.
The Corporation expects that its financial
results for the three months ending June 30, 2023 will reflect
revenue of approximately $33 million, including approximately $5.4
million of revenue from the Corporation’s illumin self-service line
of business, Adjusted EBITDA of approximately $20,000, and net loss
of approximately $6 million.
In addition, as at June 30, 2023, the
Corporation expects to report total cash and cash equivalents of
approximately $66 million, and no outstanding debt.
The guidance provided herein is subject to
change prior to the finalization of the Corporation’s financial
statements and accompanying management’s discussion and analysis
for the three and six months ending June 30, 2023. The Corporation
is scheduled to release its unaudited interim financial statements
and accompanying management discussion and analysis for the three
and six months ending June 30, 2023 on August 10, 2023, which is
prior to the expiry of the Offer on August 30,
2023.
Non-IFRS Measures
This news release makes reference to certain
non-IFRS measures. These measures are not recognized measures under
IFRS, do not have a standardized meaning prescribed by IFRS, and
are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided
as additional information to complement those IFRS measures by
providing further understanding of our results of operations from
management’s perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of our
financial information reported under IFRS. We use non-IFRS measures
including “Adjusted EBITDA” (as well as other measures discussed
elsewhere in this news release).
The term “Adjusted EBITDA” refers to net income
(loss) after adjusting for finance costs, impairment loss, fair
value gain, income taxes, foreign exchange gain (loss),
depreciation and amortization, share-based compensation,
acquisition and related integration costs, severance expenses and
adjustments to the carrying value of investment tax credits
receivable. The Corporation believes that Adjusted EBITDA is useful
supplemental information as it provides an indication of the
results generated by the Corporation’s main business activities
before taking into consideration how those activities are financed
and taxed and also prior to taking into consideration depreciation
of property and equipment and certain other items listed above. It
is a key measure used by the Corporation’s management and board of
directors to understand and evaluate the Corporation’s operating
performance, to prepare annual budgets and to help develop
operating plans.
These non-IFRS measures are used to provide
investors with supplemental measures of our operating performance
and thus highlight trends in our business that may not otherwise be
apparent when relying solely on IFRS measures. We believe that
securities analysts, investors, and other interested parties
frequently use non-IFRS measures in the evaluation of issuers, and
that these non-IFRS measures in particular are relevant to their
analysis of the Corporation.
About illumin illumin is a
journey advertising platform that enables marketers to reach
consumers at every stage of their journey by leveraging advanced
machine learning algorithms and real-time data analytics. The
Corporation’s mission is to illuminate the path for brands to
connect with their customers through the power of data-driven
advertising. Headquartered in Toronto, Canada, illumin serves
clients across North America, Latin America, and Europe.
Forward-looking information
This news release contains forward-looking
statements or information (collectively, “forward-looking
statements”) within the meaning of applicable securities
legislation, including Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements include: terms of the Offer,
including price range and number of the Shares illumin may purchase
under the Offer; timing for launch and completion of the Offer;
sources and availability of funding for the Offer and the intention
to delist from Nasdaq. Certain forward-looking statements may
relate to the Corporation’s future financial outlook, financial
position, anticipated events, results and the Corporation’s
strategy with respect to the illumin platform. Forward-looking
statements involve assumptions, risks and uncertainties that may
cause such statements not to occur or results to differ materially.
Many factors could cause actual future events to differ materially
from the forward-looking statements in this document, including but
not limited to, the risks that illumin will be unable to realize
its business plans and strategic objectives; the risks associated
with the advertisement industry generally; the impact of Share
price volatility on the Offer; receipt of regulatory approvals for
the Offer documents; satisfaction of conditions associated with the
Offer, including the impact of Share price volatility on completing
the Offer; risk that the Offer will not be completed on the terms
described in this news release (including the price range and
number of Shares illumin may purchase under the Offer) or at all;
changes in general economic conditions, including as a result of a
pandemic, inflation and the ongoing conflict in Ukraine; and other
risks and uncertainties and potential events and the inherent
uncertainty of forward-looking statements.
Many factors could cause the Corporation’s
actual financial results, level of activity, performance or
achievements or future events or developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation, the factors discussed in the "Risk
Factors" section of the Corporation's Annual Information Form or
the fiscal year ended December 31, 2022 (the
"AIF") and the Corporation's latest Management
Discussion and Analysis (the “MD&A”).
Shareholders are urged to review the factors and risks described in
the reports the Corporation will file from time to time with the
SEC and on the Corporation’s SEDAR+ profile at
www.sedarplus.com.
Although illumin believes such forward-looking
statements are reasonable, there can be no assurance they will
prove to be correct. The above assumptions, risks and uncertainties
are not exhaustive. Forward-looking statements are made as of the
date hereof and, except as required by law, illumin undertakes no
obligation to update or revise any forward-looking statements.
For further information, please
contact
Daniel Gordon Investor Relations Manager illumin 416-218-9888
investors@illumin.com |
Babak Pedram Investor Relations – Canada Virtus Advisory Group Inc.
416-646-6779 bpedram@virtusadvisory.com |
David Hanover Investor Relations – U.S. KCSA Strategic
Communications 212-896-1220 dhanover@kcsa.com |
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