WILDBRAIN COMPLETES INITIAL CLOSING OF US$12.2 MILLION FINANCING FOR GROWTH INITIATIVES

Funds earmarked for acquisitions and investments to drive WildBrain’s content and brand strategy, with special focus on its AVOD business, WildBrain Spark

Halifax, NS – June 24, 2020 – WildBrain Ltd. (“WildBrain” or the “Company”) (TSX: WILD), a global leader in kids and family entertainment, has completed an initial closing of the previously announced financing with its largest shareholder, Fine Capital Partners L.P. (“Fine Capital”), on behalf of certain funds managed by Fine Capital. The proceeds of the financing will be denominated in US dollars – as a result, Fine Capital has agreed to purchase up to US$18,497,5001 (the US dollar equivalent of CAD$25 million) of exchangeable secured debentures (the “Exchangeable Debentures”) issued by a newly formed subsidiary of the Company (“Subco”).

At the initial closing of the financing, Fine Capital subscribed for an aggregate principal amount of US$12,208,3501 of Exchangeable Debentures with the balance of the commitment available to be called by Subco at any time, subject to certain conditions, up until March 24, 2023. The Exchangeable Debentures issued at the initial closing will be exchangeable for Variable Voting Shares of the Company (the “Variable Voting Shares”) at a price of US$1.0728551 per Variable Voting Share (the US dollar equivalent of CAD$1.45).

Concurrently, the Company has issued to Fine Capital warrants (the “Warrants”) to purchase 5,000,000 Variable Voting Shares at a price of CAD$1.45 per Variable Voting Share, which expire five years from today’s date. Net proceeds from the Exchangeable Debentures will be used by Subco to fund acquisitions and other investments to drive WildBrain’s content and brand strategy across the Company, with a special focus on its ad-supported video-on-demand business (“AVOD”). The financing structure does not increase the Company’s leverage ratio for covenant purposes under its senior credit facility2.

“One of the most exciting growth opportunities in the media industry is the rise of AVOD,” said Eric Ellenbogen, CEO of WildBrain. “This capital will allow us to finance accretive investments across areas such as content, IP, and technology, especially in our AVOD business, WildBrain Spark. With four billion monthly views across over 800 channels, WildBrain Spark attracts one of the largest and most engaged global audiences in the kids and family space. We see it as a key driver of IP for our business.”

“We are pleased to increase our investment in WildBrain during this exciting period for the children’s media industry,” said Jonathan Whitcher, CEO and Chief Investment Officer of Fine Capital, and a non-executive and independent director of WildBrain. “With its vast content library, powerful WildBrain Spark asset and its integrated strategy of production, distribution and licensing, WildBrain is ideally positioned to exploit the remarkable opportunity set that exists today for acquisitions, partnerships and investment across the children’s media landscape.”

As a condition to the closing of the financing, Mr. Whitcher was appointed to the Corporate Finance Committee of WildBrain’s board of directors, effective as of today’s date.

Fine Capital currently owns, or has control or direction of 57,472,888 Variable Voting Shares, which represent approximately 33.60% of the outstanding Variable Voting Shares and common voting shares of WildBrain (the “Common Voting Shares” and together with the Variable Voting Shares, the “Voting Shares”) and approximately 14.26% of the voting power attached to the outstanding Voting Shares. Assuming (i) the Company opts to draw down on the full US$18,497,500 aggregate amount of Exchangeable Debentures, (ii) an exchange price of US$1.072855 and (iii) the receipt of shareholder approval to remove limitations on the number of Variable Voting Shares that may be issued pursuant to the terms of the financing, as is further described in the transaction documents, the maximum number of Variable Voting Shares issuable upon the exchange, redemption or maturity of the Exchangeable Debentures and exercise of the Warrants is 22,241,379 (the “Maximum Share Issuance”). Assuming the Maximum Share Issuance, Fine Capital will hold, or have control or direction over 79,714,267 Variable Voting Shares, which would represent approximately 41.24% of the issued and outstanding Voting Shares following the issuance of such Variable Voting Shares and approximately 16.97% of the voting power attached to the outstanding Voting Shares.

Additional details on the financing can be found in the Company’s press release dated May 13, 2020 and the material change reports and transaction documents that have been or will be filed on SEDAR at www.sedar.com.

1. F/x exchange rate of 1.3516 CAD to USD.

2. Net debt includes long-term debt, lease liabilities and bank indebtedness less cash, and excludes interim production financing. Net leverage ratio as discussed in this press release is a reference to the Total Net Leverage Ratio as defined in the Company’s senior secured credit agreement available on SEDAR at sedar.com.

For more information, please contact:

Investor Relations: Nancy Chan-Palmateer – Director, Investor Relations, WildBrain
nancy.chanpalmateer@wildbrain.com
+1 416-977-7358

Media: Shaun Smith – Director, Corporate & Trade Communications, WildBrain
shaun.smith@wildbrain.com
+1 416-977-7230

About WildBrain

At WildBrain we make great content for kids and families. With approximately 13,000 half-hours of filmed entertainment in our library – one of the world’s most extensive – we are home to such brands as Peanuts, Teletubbies, Strawberry Shortcake, Caillou, Inspector Gadget, Johnny Test and Degrassi. Our shows are seen in more than 150 countries on over 500 telecasters and streaming platforms. Our AVOD business – WildBrain Spark – offers one of the largest networks of kids’ channels on YouTube, with over 168 million subscribers. We also license consumer products and location-based entertainment in every major territory for our own properties as well for our clients and content partners. Our television group owns and operates four family entertainment channels that are among the most viewed in Canada. WildBrain is headquartered in Canada with offices worldwide and trades on the Toronto Stock Exchange (WILD). Visit us at www.wildbrain.com.

Forward-Looking Statements

This press release contains “forward-looking statements” under applicable securities laws with respect to the Company including, without limitation, statements regarding an exchangeable secured debenture financing arrangement, terms and conditions applicable to such financing, expected use of net proceeds from such financing, impact of the financing on the Company’s leverage, future growth and financial and operating performance of WildBrain Spark, the markets and industries in which the Company and its subsidiaries operate, impacts of the COVID-19 situation on the Company, its business, the markets and industries in which it operates, and future financial and operating results, production capacity utilization, reorganization initiatives and expected financial impacts from such initiatives, the business strategies and operational activities of the Company and its long-term prospects. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties and are based on information currently available to the Company. Actual results or events may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations, among other things, include the ability of the Company to finalize the long form agreements for the financing in a timely manner and complete the other conditions to closing, the availability of investment opportunities and at acceptable valuations, epidemics, pandemics or other public health crises, including the current outbreak of COVID-19, the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak, the reliance of the Company on the Internet and other technologies to continue to conduct its business, failure to meet covenants under the senior credit facility of the Company, the ability of the Company to execute on its business strategies and investment opportunities, the ability of the Company to realize expected operating cost savings, consumer preferences, market factors, conditions in the AVOD, entertainment and brands industries, the ability of the Company to execute on production and licensing arrangements, and risk factors discussed in materials filed with applicable securities regulatory authorities from time to time including matters discussed under “Risk Factors” in the Company’s most recent Annual Information Form and annual Management Discussion and Analysis. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

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