Agreement Includes a Comprehensive Solution for Debt Obligations That Results in Reduced Debt
Balances & Improved Free Cash Flow
AUSTIN, TX, April 13, 2017 – Mood Media Corporation (TSX:MM) (“Mood Media”, the “Company” or “Mood”) is pleased to announce that it has entered into an arrangement agreement (the “Arrangement Agreement”) with affiliates of several of its key stakeholders, including an affiliate of certain funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”) (NYSE:APO) and funds advised or sub-advised by GSO Capital Partners LP or its affiliates (GSO Capital Partners LP, together with its affiliates, “GSO”) (including funds advised by FS Investments and sub-advised by GSO Capital Partners LP or its affiliates) to effect a comprehensive transaction pursuant to which all of the issued and outstanding common shares of Mood Media will be acquired for C$0.17 in cash per share (the “Share Acquisition”) and certain of the Company’s significant debt obligations will be refinanced, restructured or redeemed, as further detailed below. The C$0.17 cash price per common share represents a 162% premium over the closing price of the common shares of Mood Media on the Toronto Stock Exchange (the “TSX”) on April 12, 2017 and a 149% premium over the 20-day volume weighted average trading price on the TSX for the period prior to and including such date.
In connection with the transaction, the Company’s US$350 million aggregate principal amount 9.25% senior unsecured notes due 2020 (the “Senior Unsecured Notes”) will be exchanged for consideration, per US$1,000 principal amount, consisting of US$500 principal amount of newly issued second lien notes of the Company (“New Company Notes”) and up to 175 new common shares of the Company (“New Company Shares”), as well as additional consideration, to the extent applicable, in connection with the New Equity Issuance described below. In addition, the Company will refinance its existing US$250 million first lien credit facility with a new US$315 million first lien credit facility (the “New Credit Facility”) to be provided by funds and accounts managed by HPS Investment Partners, LLC (the “Credit Facility Refinancing”). The proceeds of the New Credit Facility will also be used to redeem the US$50 million aggregate principal amount 10% senior unsecured notes due 2023 of the Company’s subsidiary, Mood Media Group S.A., in accordance with the indenture governing their terms. As part of the transaction, the Company will be re-domiciled from Canada to Delaware. All such transactions, including the Share Acquisition, are collectively referred to as the “Transaction”.
“This transaction is an excellent outcome for all of our stakeholders as it puts Mood Media on a stronger footing to advance our transformation and capitalize on the opportunities ahead,” said Steve Richards, President and Chief Executive Officer of Mood Media. “With the support of Apollo, GSO and their partners, Mood Media can further grow and strengthen our business as we invest in new opportunities. We look forward to working with our stakeholders to increasingly elevate the Company’s position as the clear leader for customer experience via value-added solutions that benefit Mood’s clients, partners and employees. In addition, the transaction provides our shareholders with certainty of value at a significant premium over market.”
“We are enthusiastic about the next chapter in our relationship with Mood Media,” said David Sambur, Senior Partner at Apollo. “Mood is the clear global leader in elevating customer experiences by providing leading sound, sight and scent solutions to some of the world’s most prominent retail, restaurant and hospitality companies. With this transaction, which de-levers the Company and reduces its cash interest burden, Mood Media now has the financial flexibility it needs to drive innovation and investment in the business. We look forward to working with the Mood team to drive the Company’s strategic direction and enhance its growth.”