MONTRÉAL, Oct. 26, 2018 (GLOBE NEWSWIRE) -- Stingray Digital Group Inc. (“Stingray”) (TSX: RAY.A; RAY.B) today announced that it has completed the previously announced acquisition (the “Transaction”) of Newfoundland Capital Corporation Limited (“NCC”) (TSX: NCC.A; NCC.B), one of Canada’s leading radio broadcasters with 101 licences (82 FM and 19 AM) across Canada.

NCC reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales, and networking. NCC operates 72 local radio stations and 29 repeating stations — also available on web and mobile — in seven (7) provinces from coast to coast. NCC holds the second largest number of radio licences in Canada. NCC employs approximately 800 radio professionals nationwide.

As a result of the closing of the Transaction, Rob Steele has stepped down as President and Chief Executive Officer of NCC and Ian Lurie will continue to assume leadership responsibilities with regards to Stingray’s new radio operations.

“The transaction closed today signals the creation of Canada’s largest public independent media company, and of that, I could not be more proud” said Eric Boyko, President, Co-founder, and Chief Executive Officer of Stingray. “Through the integration of NCC’s assets and extraordinary talent - both on and off the air - we are poised to take Stingray to new levels of growth and success. Radio is a medium that has personal resonance with each of us, whether for music discovery or local news, and I am confident in its future as it evolves within the digital landscape. Canadian advertisers will especially benefit from the scope of innovative digital products unlocked by this transaction. I want to thank our board of directors, shareholders, and employees for their demonstration of support throughout this process. Today is a day for celebration, but more importantly, to welcome 800 new employees to the Stingray family.”

Shareholder Consideration
Each shareholder of NCC will receive approximately 0.15371 Stingray subordinate voting shares (or Stingray variable subordinate voting shares, as applicable) and approximately $13.17 in cash for each share of NCC owned. No fractional shares will be issued, and Stingray will settle any fractional shares in accordance with the terms of the arrangement agreement entered into on May 2, 2018.

Exchange of Subscription Receipts
As a result of the closing of the Transaction and pursuant to the terms of the 11,827,100 subscription receipts issued on May 23, 2018, each holder of subscription receipts will automatically receive effective today, 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), for each subscription receipt held.

Stingray expects that trading in the subscription receipts listed on the TSX (TSX: RAY.R; RAY.N) will be halted shortly after the issuance of this news release and remain halted until the close of business today, that the transfer registers maintained by the subscription receipt agent will be closed and that the subscription receipts will be delisted by the TSX as at the close of business today. The subordinate voting shares and variable subordinate voting shares of Stingray to be issued on the exchange of the subscription receipts are expected to begin trading on the TSX at the opening of the market today.

The holder of the 1,452,850 subscription receipts issued on May 23, 2018 to the Boyko Group will receive, without payment of additional consideration or further action, one multiple voting share of Stingray, for each subscription receipt held.

Exercise of Subscription Rights
Further to the closing of the Transaction and the issuance of Stingray shares to the shareholders of NCC, 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 and subscribed for 194,363 multiple voting shares of Stingray from treasury (the “Pre-emptive Shares”) at a price of $10.29 per share for aggregate gross proceeds of approximately $2 million (the “Pre-emptive Rights Exercise”).

The Pre-emptive Rights Exercise was funded by certain shareholders of 8978832 Canada Inc. through follow-on investments in the share capital of 8978832 Canada Inc. The Pre-emptive Shares are subject to a four month hold from the date hereof.

NCC Shares
In view of the coming into effect of the acquisition of NCC by Stingray, it is expected that the Class A Subordinate Voting Shares and Class B Common Shares of NCC will be delisted from the TSX in a few days.

This announcement is not an offer of securities for sale in the United States. The Stingray shares may not be offered or sold in the United States absent registration or an exemption from registration.

About Stingray Digital Group Inc.
Montréal-based Stingray Digital Group Inc. (TSX: RAY.A; RAY.B) is a leading music, media, and technology company with over 1,200 employees worldwide. Stingray is a premium provider of curated direct-to-consumer and B2B services, including audio television channels, 101 radio stations, SVOD content, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps, which have been downloaded over 100 million times. Stingray reaches 400 million subscribers (or users) in 156 countries. For more information: www.stingray.com.

About Newfoundland Capital Corporation Limited
Newfoundland Capital Corporation Limited (TSX: NCC.A, NCC.B) owns and operates Newcap Radio which is one of Canada's leading radio broadcasters with 101 broadcast licences (72 radio stations and 29 repeating signals) across Canada. NCC reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking.

Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities laws, including regarding the acquisition of NCC (the “Acquisition”). This forward-looking information includes, but is not limited to, statements with respect to management’s expectations regarding the future growth of Stingray, and statements with respect to the anticipated benefits of the Acquisition and Stingray’s ability to successfully integrate NCC’s business, which include, without limitation, cost saving synergies, leverage post-Acquisition, management strategy and growth prospects following the Acquisition. This forward-looking information relates to, among other things, our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimations and intentions, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions. 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, 2018 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. 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, readers 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:

Frédérick Truchon-Gagnon
NATIONAL Public Relations
(438) 350-1001
ftruchon-gagnon@national.ca