Stingray Closes $138 Million Offerings of Subscrip

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MONTREAL, May 23, 2018 (GLOBE NEWSWIRE) -- Stingray Digital Group Inc. (“Stingray”) (TSX:RAY.A)(TSX:RAY.B) today announced that it has completed its previously announced subscription receipt offerings for aggregate gross proceeds of approximately $138 million.

Public Offering of Subscription Receipts on a Bought Deal Basis

Stingray issued 7,981,000 subscription receipts (the “Public Subscription Receipts”) from treasury at a price of $10.40 per Public Subscription Receipt, on a bought deal basis, for aggregate gross proceeds of approximately $83 million (the “Public Offering”), through a syndicate of underwriters (the “Underwriters”) co-led by National Bank Financial Inc. and BMO Capital Markets.

Stingray has granted the Underwriters an option (the “Over-Allotment Option”) to purchase up to an additional 1,197,150 Public Subscription Receipts at any time up to 30 days after closing of the Public Offering for additional gross proceeds of up to $12 million.

Each Public Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, either one subordinate voting share of Stingray or one variable subordinate voting share of Stingray, depending on whether the holder is a “Canadian” under the Broadcasting Act (Canada).

The Public Subscription Receipts will commence trading today on the Toronto Stock Exchange (TSX) under the symbols RAY.R and RAY.N.

Private Placement of Subscription Receipts Concurrently with the closing of the Public Offering, Stingray has issued 3,846,100 subscription receipts (the “Private Placement Subscription Receipts”) from treasury at a price of $10.40 per Private Placement Subscription Receipt to an affiliate of Caisse de dépôt et placement du Québec (“La Caisse”) for aggregate gross proceeds of approximately $40 million (the “Concurrent Private Placement”).

La Caisse is entitled to purchase up to an additional 576,915 Private Placement Subscription Receipts if and when the Over-Allotment Option is exercised by the Underwriters, for additional gross proceeds of up to $6 million.

Each Private Placement Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, one subordinate voting share of Stingray.

The Private Placement Subscription Receipts are subject to a four month hold from the closing date of the Concurrent Private Placement.

Exercise of Subscription Rights As a result of the Public Offering and the Concurrent Private Placement, 8978832 Canada Inc., a member of the Boyko Group and a holder of multiple voting shares of Stingray, has exercised subscription rights attached to the multiple voting shares of Stingray and subscribed for 1,452,850 subscription receipts (the “Pre-emptive Subscription Receipts”) from treasury at a price of $10.40 per Pre-emptive Subscription Receipt for aggregate gross proceeds of approximately $15 million (the “Pre-emptive Rights Exercise” and, together with the Public Offering and the Concurrent Private Placement, collectively the “Offerings”).

Each Pre-emptive Subscription Receipt entitles the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, one multiple voting share of Stingray.

The Pre-emptive Rights Exercise was funded by Investissement Québec and Le Fonds de solidarité FTQ through follow-on investments in the share capital of 8978832 Canada Inc.

The Pre-emptive Subscription Receipts are subject to a four month hold from the closing date of the Pre‑emptive Rights Exercise.

Stingray will use the proceeds of the Offerings, funds drawn on new credit facilities and cash on hand to finance (i) the purchase price and related transaction and financing costs payable in connection with the previously announced acquisition of Newfoundland Capital Corporation Limited (the “Acquisition”) and (ii) the repayment of an existing credit facility.

Advisors National Bank Financial Inc. and BMO Capital Markets are acting as Joint Bookrunners on the Public Offering. Legal advice is being provided to Stingray by Davies Ward Phillips & Vineberg LLP. Legal advice is being provided to the Underwriters and to La Caisse by Fasken Martineau Dumoulin LLP and McCarthy Tétrault LLP, respectively.

Availability of Documents Copies of related documents, such as the final short form prospectus and the underwriting agreement relating to the Public Offering, the subscription agreement entered into in connection with the Concurrent Private Placement, the various subscription receipt agreements relating to the Offerings, and the arrangement agreement entered into in connection with the Acquisition are or will be available on SEDAR ( www.sedar.com ) as part of the public filings of Stingray and on Stingray's website at www.stingray.com

About Stingray Digital Group Inc. Stingray Digital Group Inc. (TSX:RAY.A)(TSX:RAY.B) is the world-leading provider of multiplatform music and video services, and digital experiences for pay TV operators, commercial establishments, OTT providers, mobile operators, consumers, and more. Its services include audio television channels, premium television channels, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps. Stingray reaches 400 million subscribers (or users) in 156 countries and its mobile apps have been downloaded over 90 million times. Stingray is headquartered in Montreal and currently has close to 400 employees worldwide. For more information: www.stingray.com .

Forward-Looking Information This news release contains forward-looking information within the meaning of applicable Canadian securities laws, including regarding the Acquisition and the Offerings. Statements with the words “could”, “expect”, “may”, “will”, “anticipate”, “assume”, “intend”, “plan”, “believes”, “estimates”, “guidance”, “foresee”, “continue” and similar expressions are intended to identify statements containing forward looking information, although not all forward-looking statements include such words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.

Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are 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 statements. These factors include, but are not limited to the risk factors disclosed in Stingray’s Annual Information Form for the year ended March 31, 2017 and in Stingray’s final short form prospectus dated May 14, 2018, both of which are available on SEDAR.

In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such assumptions include, but are not limited to, the following: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth effectively; the absence of material adverse changes in our industry or the global economy; trends in our industry and markets; the absence of any changes in law, administrative policy or regulatory requirements applicable to our business, including any change to our licenses with the CRTC; minimal changes to the distribution of the pay audio services by Pay-TV providers in light of recent CRTC policy decisions; our ability to manage risks related to international expansion; our ability to maintain good business relationships with our clients, agents and partners; our ability to expand our sales and distribution infrastructure and our marketing; our ability to develop products and technologies that keep pace with the continuing changes in technology, evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to protect our technology and intellectual property rights; our ability to manage and integrate acquisitions; our ability to retain key personnel; and our ability to raise sufficient debt or equity financing to support our business growth. In relation to the Acquisition and the Offering, Stingray makes the following material assumptions, without limitation: availability of capital resources, strength of market conditions, customer demand and satisfactory of customary closing conditions, including CRTC and competition approval. If these assumptions are inaccurate, Stingray’s or the combined entity’s actual results could differ materially from those expressed or implied in such forward-looking statements. Accordingly, prospective purchasers are cautioned not to place undue reliance on such statements.

All of the forward-looking information in this document is qualified by these cautionary statements. Statements containing forward-looking information contained herein are made only as of the date of this news release. Stingray expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For more information, please contact:

Mathieu Péloquin Senior Vice-President, Marketing and Communications Stingray Digital Group Inc. 1 514-664-1244, ext. 2362 mpeloquin@stingray.com