Canadian sports betting company NorthStar Gaming announced it has received a strategic investment of C$12.25 million ($9.19 million) from Playtech by way of a convertible debenture loan.
Accelerate Growth, Expand User Base
The funds provided by Playtech completed the concurrent financing NorthStar Gaming needs in connection with its reverse takeover of Baden Resources. Once the RTO is complete, the Canadian gaming operator plans to apply to begin trading on the Toronto Stock Exchange (TSX) Venture Exchange.
Michael Moskowitz, chief executive officer of NorthStar Gaming, noted that “Playtech’s unparalleled expertise in the gaming industry” would help NorthStar “accelerate growth” and further expand its user base.”
“With the additional investment, we look forward to expanding our market share across Ontario and further enhancing our premium, content-driven experience for consumers,” Moskowitz concluded.
Convertible Debenture Terms
According to the terms of the financing, the debenture loan will convert into units of the company comprising one common share, and two half warrants with different exercise prices – C$0.85 ($0.64) and C$0.90 ($0.67) – and each C$0.50 ($0.37) of the outstanding principal of the debenture will convert into one unit.
The two half warrants will have a term of five years from the date of the conversion of the debenture while in relation to the RTO, the common shares given to Playtech on conversion will be exchanged for Baden Resources common shares on the same terms. In connection with the RTO, Playtech will be issued replacement warrants of Baden Resources on substantially similar terms as the warrants issued to Playtech on NorthStar Gaming.
An amendment to the Software and Services agreement with Playtech was introduced that would expand the partnership across the entire Canadian marketplace, includes a 10-year extension and changes to certain commercial terms.
Deepen Their Partnership
Mor Weizer, chief executive officer of Playtech commented on the deepened partnership with NorthStar as the company is seeking to establish a foothold in Canada as a market leader in online gaming.
“As a key partner of NorthStar in their early stages, we understand and were impressed by NorthStar’s unique business model and product offering and are excited to further expand our partnership,” Weizer added.
Playtech’s chief financial officer Chris McGinnis will join the Board of Directors of NorthStar as a non-executive director and will act as Playtech’s representative following the strategic investment agreement.
The proceeds of the debenture, together with the previously issued subscription receipts and subscription by Torstar Corporation brought the capital raised in connection with the RTO to C$22.325 million ($16.74 million).
