DHX Media completes $140M subscription receipt offering connected to acquisition

On May 31, 2017, DHX Media Ltd. (DHX) completed the closing of a bought deal private placement offering (the Offering) of subscription receipts of DHX (the Subscription Receipts) for gross proceeds of $140 million.

The Offering was completed through a syndicate of underwriters led by Canaccord Genuity Corp. and RBC Capital Markets, and including National Bank Financial Inc., Scotiabank, CIBC Capital Markets and Echelon Wealth Partners Inc. (the Underwriters).

The Offering was made in connection with DHX’s acquisition of the entertainment division of Iconix Brand Group Inc., which includes both an 80-per-cent controlling interest in Peanuts and 100 per cent of Strawberry Shortcake.

The gross proceeds of the Offering less 50 per cent of the commission payable to the Underwriters and certain costs and expenses, have been deposited in escrow and will be released to DHX, less the remaining 50 per cent of the commission which is payable to the Underwriters, upon satisfaction of certain conditions preceeding the closing of the acquisition.

Upon satisfaction of certain conditions, each holder of subscription receipts will receive, for no additional consideration and subject to adjustment, one special warrant that, upon the satisfaction of certain conditions, shall be automatically exercised to acquire, for no additional consideration, $1,000 principal amount of 5.875-per-cent senior unsecured convertible debentures of DHX. Each such convertible debenture shall be convertible into common shares of the company at a price of $8.00 per common share, subject to adjustment.

DHX was represented in-house by Mark Gosine and James Bishop.

Stewart McKelvey acted as Canadian counsel to DHX with a team that included Gavin Stuttard, Colleen Keyes, Trevor MacDonald, Kyle Hartlen and Jim Cruickshank (tax).

Stikeman Elliott LLP acted as special Canadian counsel to DHX, with a team comprising D’Arcy Nordick, Anas Youssef, Omar Soliman and Katarina Zoricic. Troutman Sanders LLP, special US counsel to DHX, was represented by Thomas Rose, Shona Smith, Kristen O’Connor and Cot Eversole.

The Underwriters were represented by McCarthy Tétrault LLP, with a team comprising Robert Hansen, Michael Eldridge, Damilola Katibi and Gabrielle Richards (tax). Thomas Levato of Goodwin Procter LLP acted as US counsel for the Underwriters.

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