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BRAMPTON, ON, May 16, 2017 /CNW/ - DATA Communications
Management Corp. (TSX: DCM) ("DATA" or the
"Company"), announced today that it has filed a rights
offering notice and circular in respect of a rights offering (the
"Rights Offering") to securityholders to subscribe for
common shares of the Company ("Common Shares").
Details of the Rights Offering
The Company is offering a total of 13,260,263 rights
("Rights"). Every two Rights held will entitle an eligible
holder of Rights to subscribe for one Common Share at the
subscription price of $1.40, which
represents a discount of approximately 19.5% to the closing price
of the Common Shares on the TSX on May 15,
2017. If all Rights are exercised, holders of Rights will be
entitled to subscribe for a total of 6,630,131 Common Shares and
the gross proceeds of the Rights Offering will be approximately
$9.3 million. The completion of
the Rights Offering is not conditional upon the Company receiving
any minimum amount of subscriptions for Common Shares.
Under the terms of the Rights Offering, Rights are being offered
to eligible holders of DATA's outstanding Common Shares.
Eligible securityholders of record as at 5:00 p.m. (Toronto time) on May
31, 2017 (the "Record Date") will be entitled to
participate in the Rights Offering. Eligible holders of
Common Shares will receive one Right for each Common Share held. No
fractional Rights will be issued.
The Rights will be transferable. The Rights will be listed
on the TSX under the symbol "DCM.RT" and will be posted for trading
on the TSX until 12:00 p.m.
(Toronto time) on June 22, 2017, at which time they will be halted
from trading.
The Rights will expire at 5:00
p.m. (Toronto time) (the
"Expiry Time") on June 22,
2017. Rights not exercised before the Expiry Time will no
longer have any value. If a holder does not exercise the
Rights and the Rights Offering is completed, such holder's
percentage interest in the Company will be diluted upon the
exercise of Rights by other holders. Holders of Rights who
wish to exercise their Rights must do so in the manner set forth in
the rights offering circular.
DATA has retained Kingsdale Advisors as the information agent in
connection with the Rights Offering.
The rights offering notice and rights offering circular
containing details of the Rights Offering will be filed on SEDAR at
www.sedar.com and on the Company's website at
www.datacm.com.
Use of Proceeds
DATA intends to use the net proceeds from the Rights Offering to
pay down outstanding borrowings under its revolving credit
facility. The Company intends to make additional borrowings
under that facility to repay its outstanding 6.00% convertible
unsecured subordinated debentures which mature on June 30, 2017 and for working capital needs and
general corporate purposes.
"Although our credit facilities should provide the flexibility
to fund the repayment of our convertible debentures, the Company
has decided to raise equity to reduce financial leverage and
enhance its overall financial position to better position DATA to
fund organic growth and pursue additional strategic acquisitions,"
said Michael G. Sifton, CEO.
DATA intends to spend the net proceeds from the Rights Offering
as stated above. However, there may be circumstances where a
reallocation of those proceeds may be necessary. The Company
will reallocate funds only for sound business reasons and in
furtherance of its business.
Participation of Insiders
Directors and officers of the Company who currently beneficially
own, directly or indirectly, or who have control or direction over
1,756,040 Common Shares (representing approximately 13.2% of the
Company's issued and outstanding Common Shares), have indicated
that they intend to exercise their subscription privileges to
acquire Common Shares representing total subscription proceeds of
approximately $1.1 million, which
would represent approximately 11.8% of the Rights Offering assuming
it is fully subscribed.
No Offering in the United
States
Neither the Rights nor the Common Shares issued on exercise of
the Rights have been, nor will they be, registered under the United
States Securities Act of 1933, as amended, (the "1933 Act")
and may not be offered, sold or delivered, directly or indirectly,
in the United States, or to, or
for the account or benefit of, "U.S. persons" (as defined in
Regulation S under the 1933 Act), except pursuant to an exemption
from the registration requirements of the 1933 Act. This
press release does not constitute an offer to sell or a
solicitation of an offer to buy any Units in the United States or to, or for the account or
benefit of, U.S. persons.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions,
bringing value and collaboration to marketing and operation teams
across North America. We
help marketers and agencies unify and execute communications
campaigns across multiple channels, and we help operations teams
streamline and automate document and communications management
processes. Our core capabilities include direct marketing, print
services, labels and asset tracking, event tickets and gift cards,
logistics and fulfilment, content and workflow management, data
management and analytics, and regulatory communications. We
serve clients in key vertical markets such as financial services,
retail, healthcare, lottery and gaming, not‐for‐profit, and energy.
We are strategically located across Canada to support clients on a national basis,
and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications
Management Corp. is available on www.datacm.com, and in the
disclosure documents filed by DATA Communications Management Corp.
on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.
Forward-Looking Statements
Certain statements in this press release constitute
"forward‐looking" statements that involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, objectives or achievements of DATA, or industry
results, to be materially different from any future results,
performance, objectives or achievements expressed or implied by
such forward‐looking statements. When used in this press
release, words such as "may", "would", "could", "will", "expect",
"anticipate", "estimate", "believe", "intend", "plan", and other
similar expressions are intended to identify forward‐looking
statements. These statements reflect DATA's current views
regarding future events and operating performance, are based on
information currently available to DATA, and speak only as of the
date of this press release. These forward‐looking statements
involve a number of risks, uncertainties and assumptions and should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether or not such
performance or results will be achieved. Many factors could
cause the actual results, performance, objectives or achievements
of DATA to be materially different from any future results,
performance, objectives or achievements that may be expressed or
implied by such forward‐looking statements, including those
discussed under "What are the risk factors relating to the Rights
Offering and the Common Shares?" in DATA's rights offering circular
and in DATA's other publicly available disclosure documents, as
filed by DATA on SEDAR (www.sedar.com). Should one or more of
these risks or uncertainties materialize, or should assumptions
underlying the forward‐looking statements prove incorrect, actual
results may vary materially from those described in this press
release as intended, planned, anticipated, believed, estimated or
expected. Unless required by applicable securities law, DATA
does not intend and does not assume any obligation to update these
forward‐looking statements.
SOURCE DATA Communications Management Corp.