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noted
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TORONTO,
Sept. 25,
2024 /CNW/ - FG Acquisition Corp. (TSX:
FGAA.U) (TSX: FGAA.WT.U) ("FGAC" or the
"Corporation"), a special purpose acquisition company, is
pleased to announce the successful completion of the previously
announced acquisition (the "MDI Acquisition") of Strong/MDI
Screen Systems, Inc. ("MDI") by FGAC, pursuant to an
acquisition agreement (the "Acquisition Agreement") dated
May 3, 2024 between FGAC, Strong
Global Entertainment, Inc. (NYSE: SGE) ("Strong Global"),
MDI, FGAC Investors LLC (the "FG Sponsor") and CG
Investments VII Inc (the "CG Sponsor" and together with FGAC
Investors LLC, the "Sponsors"). The MDI Acquisition,
together with the launch of FGAC's new investment platform,
constitute FGAC's qualifying acquisition.
The Corporation is also pleased to announce it
has completed an offering of 433,559 common shares (the "Common
Shares") at a price of $10.00 per
Common Share, for gross proceeds of approximately $4.3 million on a private placement basis (the
"Private Placement"). The net proceeds from the
Private Placement will be used to satisfy a portion of the purchase
price in respect of the MDI Acquisition, to fund the Company's
growth initiatives, for working capital and for general corporate
purposes.
"We are excited to complete this qualifying
acquisition previously presented to our shareholders and are
pleased to anchor our unique investment platform with MDI, a
leading global manufacturing and distribution business.
Furthermore, the success of the Private Placement positions the
Corporation very well to execute on its strategy" said Larry G. Swets, Jr., Executive Chair of Saltire
Capital Ltd.
Concurrently with the closing of the MDI
Acquisition ("Closing"), the Corporation has renamed itself
Saltire Capital Ltd. ("Saltire"). Saltire intends to build
and grow a portfolio of profitable and cash-flow generating private
investments that would not otherwise be available to public market
investors through its proprietary origination process and to
maximize its intrinsic value on a per-share basis over the
long-term by seeking to achieve superior investment performance
commensurate with reasonable risk.
"We are delighted to have finalized our
acquisition of MDI and the launch of Saltire Capital Ltd. We
firmly believe that, as we execute on our strategy, this platform
will benefit both business owners and investors seeking a
differentiated long-term platform", commented Andrew Clark, Chief Executive Officer of Saltire
Partners, Inc. (the "Manager"), Saltire's external
manager.
Saltire Capital Ltd. is led by Larry G. Swets, Jr., as Executive Chairman,
Andrew Clark as Chief Executive
Officer, Hassan Baqar as Chief
Financial Officer and Robert Clark
as Chief Investment Officer, whose services will be provided
pursuant to the Management Agreement (as defined below). The
Corporation's board of directors consists of Larry G. Swets, Kyle
Cerminara, Andrew Clark,
Shaun Alie, Robert Clark, Andrew B.
McIntyre and Dr. Richard E.
Govignon.
FGAC's Class A restricted voting shares (the
"Class A Restricted Voting Shares") and share purchase
warrants (the "IPO Warrants") are listed on the
Toronto Stock Exchange (the "TSX"). In addition, the
Corporation had 2,875,000 Class B shares (the "Class B
Shares") issued and outstanding prior to Closing. The TSX has
conditionally approved the listing of the Common Shares and
Warrants and it is anticipated that they will be listed for trading
on the TSX on or about September 27,
2024, subject to the TSX listing requirements. The
Corporation has reserved the symbols "SLT" and "SLT.WT" for the
Common Shares and Warrants, respectively.
Following Closing, the Corporation has the
following securities issued and outstanding:
- 2,955 Common Shares, issued on conversion of the Corporation's
outstanding Class A Restricted Voting Shares, following the
redemption of 803 Class A Restricted Voting Shares tendered for
redemption in connection with Closing;
- 2,875,000 Common Shares, issued on conversion of the
Corporation's outstanding Class B Shares;
- 433,559 Common Shares, issued in connection with the Private
Placement;
- 10,100,000 $11.50 exercise price
warrants to acquire Common Shares; and
- 1,500,000 $15 exercise price
warrants to acquire Common Shares.
As a result of the foregoing, on a non-diluted
basis:
- the holders of Class A Restricted Voting Shares hold an
ownership interest of approximately 0.06% in Saltire;
- the FG Sponsor and CG Sponsor hold a ownership interests of
approximately 36.64% and 4.53%, respectively; and
- Strong Global holds an ownership interest of approximately
37.33%.
Saltire: Long-Term Capital Partner
Saltire's investment objectives are to provide
shareholders with long-term total returns through capital
appreciation by investing in securities of portfolio companies that
will be actively managed and that the Manager believes are
under-valued. The Manager, in evaluating potential investments,
will focus on some of the following
- management strength, including experience, alignment and bench
strength;
- top- and bottom-line growth opportunities, both organic and
inorganic, including the degree of visibility into this growth and
the opportunity for re-investment of capital in support of growth
opportunities;
- operational execution and the sustainability of the business
model, including barriers to entry, competitive position and
durability of cash flows;
- profitability, including margin trajectory, operating leverage,
free cash flow conversion, and per share compounding
expectations;
- capital intensity, including returns on capital, capital
expenditure requirements and balance sheet capacity; and
- corporate health and risk, including risk assessment and
mitigation strategies.
Concurrently with Closing, Saltire has entered
into a management agreement (the "Management Agreement")
with Saltire Partners, Inc. (the "Manager"), which will
provide management services to Saltire. Saltire's unique structure
includes a 20% ownership position in the Manager, a stand-alone
investment manager that will seek to develop, through organic
growth and selected strategic acquisitions, a strong and
differentiated asset management platform. The Manager also has
executive responsibilities at Saltire, including investment and
capital allocation decisions.
Saltire will seek to hold investments until it
believes market valuations materially exceed inherent underlying
valuation of the business, using traditional valuation metrics
appropriate for each industry. In so doing, Saltire intends to be a
permanent capital partner for the companies it invests in.
Accordingly, Saltire's principal form of return will be through
aggregating and compounding cash flows over the long-term
MDI Investment Highlights
MDI is a leading manufacturer and distributor of
premium large format projection screens to the cinema industry in
North America and around the
globe. MDI has contractual relationships to supply screens to IMAX,
AMC, Cinemark and many of the other major cinema operators
worldwide. It also manufactures innovative screen support
structures custom-built to adapt to virtually any venue
requirement, with a unique self-standing modular construction that
allows for easy assembly and adjustable size.
MDI also sells to non-cinema customers, such as
theme parks, immersive attractions, and other entertainment venues
as well as for use in training simulators. Some of these other
customer verticals include the largest theme park operators in the
world, immersive venues such as the Illuminarium and the immersive
Van Gogh exhibits. MDI is also a subcontractor on several large
government projects providing its projection screen technology for
use in military training simulators.
MDI's management believes that MDI's screens are
among the highest quality in the industry in terms of performance
including the amount of gain (or brightness of the image reflected
from the screen's surface), viewing angles, and other
characteristics important to the viewing experience. The
high-quality is driven by the innovative manufacturing process,
focus on quality control and MDI's proprietary coatings. MDI's
management believes that it is the only major screen manufacturer
that develops and produces its own proprietary coatings, which are
critical to the overall quality and continued innovation of MDI's
screens.
Goodmans LLP acted as legal counsel to the
Corporation and Gowling WLG acted as legal counsel to Strong Global
and MDI.
Early Warning Disclosure
This press release is also being disseminated as
required by National Instrument 62-103 – The Early Warning
System and Related Take Over Bids and Insider Reporting Issues
in connection with the filing of early warning reports by FG
Sponsor and Strong Global in respect of their ownership positions
in the Corporation.
FG Sponsor (i) purchased 38,580 Common Shares in
the Private Placement, (ii) received 1,916,944 Common Shares on
conversion of the Class B Shares, and (iii) acquired 4,889,608 IPO
Warrants in connection with the put right relating thereto (the
"Warrant Put Right"). Prior to the Closing, FG Sponsor owned
or controlled 2,555,925 Class B Shares, 3,871,387 IPO Warrants, and
1,289,410 OTM Warrants. Immediately following Closing, FG Sponsor
owned or controlled 1,936,234 Common Shares, 8,760,995 IPO
Warrants, and 1,289,410 OTM Warrants.
Strong Global received 1,972,723 Common Shares
and 900,000 series A preferred shares (the "Series A Preferred
Shares") as consideration under the MDI Acquisition. Prior to
the Closing, Strong Global did not own or control any securities of
the Corporation. Immediately following Closing, Strong Global owned
or controlled 1,972,723 Common Shares and 900,000 Series A
Preferred Shares.
FG Sponsor and Strong Global hold their Common
Shares, IPO Warrants and OTM Warrants, as applicable, for
investment purposes. Each of them has a long-term view of the
investment and may acquire additional securities including on the
open market or through private acquisitions or sell the securities
including on the open market or through private dispositions in the
future depending on market conditions, general economic and
industry conditions, the Corporation's business and financial
condition, and/or other relevant factors, and each such shareholder
may develop such plans or intentions in the future.
A copy of the Early Warning Reports to be filed
by FG Sponsor and Strong Global in connection with the transactions
described above will be available on the Corporation's SEDAR+
profile at www.sedarplus.ca.
About MDI
MDI is a leading global manufacturer and
distributor of premium large format projection screens and
coatings. MDI supplies cinema screens to IMAX, AMC, Cinemark and
many of the other major cinema operators worldwide. MDI also
manufactures innovative screen support structures custom built to
adapt to virtually any venue requirement. MDI also manufactures
specially designed screens, haptic flooring and other solutions for
theme parks, immersive applications such as interactive dark rides,
3D/4D theme park rides, flying theaters and motion simulators.
MDI's manufacturing facility is located in Joliette, Quebec, Canada.
About Saltire
Saltire is a long-term capital partner that
intends to invest in equity, debt and/or hybrid securities. It is
intended that investments made by Saltire will consist of
meaningful and influential stakes in carefully selected private
companies that the Manager believes are under-valued businesses
with high barriers to entry, predictable revenue streams, cash
flows and defensive characteristics, with a view to significantly
improve the fundamental value over the long-term. Although Saltire
intends to primarily invest in private companies, Saltire may, in
certain circumstances if the opportunity arises, also explore
potential investments in public companies to the extent it is able
to identify opportunities for take-private transactions that
otherwise fall within Saltire's investment strategy. This
opportunity will provide retail investors access to private and
control-level investments typically reserved for larger players,
while maintaining liquidity, as well as an ownership interest in
the Manager.
Forward-Looking Statements
Certain statements in this news release are
prospective in nature that constitute forward-looking information
and/or forward-looking statements within the meaning of applicable
securities laws (collectively, "forward-looking
statements"). Forward-looking statements include, but are not
limited to, statements concerning the completion and proposed terms
of, and matters relating to, the expected impact of the MDI
Acquisition on the business of MDI, the expected operations,
financial results and condition of the Saltire following the MDI
Acquisition, and MDI's and Saltire's business plans, strategies and
growth prospects, opportunities for their respective investors, as
well as other statements with respect to management's beliefs,
plans, estimates and intentions, and similar statements concerning
anticipated future events, results, outlook, circumstances,
performance or expectations that are not historical facts.
Forward-looking statements generally, but not
always, can be identified by the use of forward-looking terminology
such as "outlook", "objective", "may", "could", "would", "will",
"expect", "intend", "estimate", "forecasts", "project", "seek",
"anticipate", "believes", "should", "plans" or "continue", or
similar expressions suggesting future outcomes or events and the
negative of any of these terms.
Forward-looking statements reflect management's
current beliefs, expectations and assumptions and are based on
information currently available to management. With respect to the
forward-looking statements included in this news release, the
Corporation has made certain assumptions with respect to, among
other things, that the Corporation is capable of meeting and will
meet its future objectives and strategies, that the Corporation's
future projects and plans are achievable and will proceed as
anticipated, the Corporation's competitive position in its
industry, the Corporation's ability to successfully predict and
respond to client preferences and demand, availability of
favourable regulations and government incentives affecting the
industry and markets in which the Corporation operates, that the
Manager will be able to identify suitable investment opportunities
in Portfolio Companies and that the Corporation will be able to
complete investments in such Portfolio Companies, competition,
including from established and future competitors, the Manager's
ability to attract and retain management and other employees who
possess specialized knowledge and technical skills, and general
economic and market growth rates, currency exchange and interest
rates and competitive intensity.
Readers are cautioned not to place undue reliance
on forward-looking statements, as there can be no assurance that
the future circumstances, outcomes or results anticipated or
implied by such forward-looking statements will occur or that
plans, intentions or expectations upon which the forward-looking
statements are based will occur. By their nature, forward-looking
statements involve known and unknown risks and uncertainties and
other factors that could cause actual results to differ materially
from those contemplated by such statements. Factors that could
cause such differences include, but are not limited to: inability
to predict future results of operations and other operating
metrics, which fluctuate from quarter to quarter, the impact of
fluctuations in foreign currency exchange rates on earnings, the
Corporation's failure to outperform its competitors and keep pace
with industry and technological changes in an evolving and
competitive market, failure to attract or retain clients or
generate growth and revenue for the Corporation, the impact on the
Corporation's growth and/or tax profile of applicable tax laws,
damages or penalties imposed as a result of civil litigation or
regulatory enforcement actions, the business of the Corporation
being disrupted as a result of operational risks or otherwise,
dependence on third party service providers, suppliers and other
third-party relationships, non-performance or early termination of
contracts, alleged infringement of the intellectual
property rights of third parties, the Manager being unable to
attract and retain skilled personnel and qualified management,
changes in business, economic or political conditions impacting the
Corporation's business and reputation, the Manager not being able
to identify suitable investment opportunities in Portfolio
Companies or the Corporation not being able to complete investments
in such Portfolio Companies, the Corporation being unable to raise
additional funds to meet its capital requirements, the Corporation
not being able to continue as a going concern, Saltire failing to
obtain or maintain adequate insurance coverage, losses arising from
any misrepresentations in the representations, warranties and
covenants of MDI or Strong Global pursuant to the Acquisition
Agreement, which terminate on Closing, subsequent to the completion
of the MDI Acquisition, the Corporation having to take write-downs
or write-offs, restructuring or other charges, the TSX not
approving the MDI Acquisition and the Corporation's securities for
listing, the Corporation's ability to comply with continued listing
standards, the MDI Acquisition's benefits not meeting the
expectations of investors or securities analysts, there being no
market for the Corporation's securities, fluctuations in the market
price of the Common Shares, sales of Common Shares by significant
shareholders, increases in the number of shares eligible for future
resale in the public market and dilution as a result of Warrants,
OTM Warrants, or other convertible or exchangeable securities
becoming exercisable for Common Shares, the Warrants never being
in-the-money, FGAC being unable to continue as a going concern and
consummate a qualifying acquisition, the Corporation incurring
significant expenses and devoting significant resources and
management time as a result of being a public company, the Manager
and the Corporation's executive officers having limited experience
in managing a public company, the Corporation being unable to
implement and maintain effective internal controls over financial
reporting, securities or industry analysts not publishing research,
or publishing inaccurate or unfavourable research about the
Corporation, and the Corporation's management having broad
discretion in the use of FGAC's escrowed funds and the net proceeds
from a private placement.
All forward-looking statements included in and
incorporated into this news release are qualified by these
cautionary statements. Unless otherwise indicated, the
forward-looking statements contained herein are made as of the date
of this news release, and except as required by applicable law, the
Corporation does not undertake any obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
SOURCE FG Acquisition Corp.
