GuestLogix Inc.
TSX : GXI

GuestLogix Inc.

December 02, 2014 15:20 ET

GuestLogix Announces $39 Million Bought Public Offering of Securities and $10 Million Concurrent Private Placement of Subscription Receipts

TORONTO, ONTARIO--(Marketwired - Dec. 2, 2014) -

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA.

GuestLogix Inc. (TSX:GXI) ("GuestLogix" or the "Company") announced today that it has entered into an agreement with National Bank Financial Inc. as lead underwriter pursuant to which it, along with a syndicate to be formed (the "Underwriters"), has agreed to purchase on a "bought deal" basis, 20,000,000 subscription receipts (the "Subscription Receipts") of the Company at a price of $0.95 per Subscription Receipt and $20,000,000 aggregate principal amount of 7.00% extendible convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture, for aggregate gross proceeds of $39,000,000 (the "Offering"). The net proceeds from the Offering will be used by GuestLogix to partially finance the previously announced acquisition of OpenJaw Technologies Limited (the "Acquisition"). The Acquisition is expected to close on December 22, 2014, but in any event, no later than January 22, 2015. For further details on the Acquisition, see GuestLogix' press release dated December 2, 2014.

Contemporaneously with the Offering, GuestLogix has entered into agreements with certain subscribers to complete a concurrent private placement (the "Concurrent Private Placement") of 10,479,000 subscription receipts of the Company, having the same terms as the Subscription Receipts, at a price of $0.95 per subscription receipt, for additional aggregate gross proceeds of approximately $9,955,050. In connection with the closing of the Acquisition, each of the subscribers will be entitled to a non-refundable capital commitment applicable to the portion of the subscription receipts for which each of them has subscribed.

Subscription Receipts

Each Subscription Receipt will entitle the holder thereof to receive, upon the Acquisition closing, without payment of additional consideration or further action, one common share of GuestLogix (a "Common Share") in exchange for each Subscription Receipt. The Subscription Receipts will be issued pursuant to subscription receipt agreements (the "Subscription Receipt Agreements"). Pursuant to the Subscription Receipt Agreements, the proceeds of the Subscription Receipt Offering, net of 50% of the underwriters' fee payable in connection with the Subscription Receipt Offering, will be held in escrow pending delivery of notice of the closing of the Acquisition. If the Acquisition closing does not occur at or before 5:00 p.m. (Toronto time) on January 22, 2015, the Acquisition share purchase agreement ("Share Purchase Agreement") is terminated at an earlier time, or the Company advises National Bank Financial Inc. or announces to the public that it does not intend to proceed with the Acquisition (each a "Termination Event", and the date on which any of such Termination Events occurs being the "Termination Date"), GuestLogix will return to holders of the Subscription Receipts an amount per Subscription Receipt equal to the offering price plus their pro rata portion of interest earned on the escrowed funds, net of any applicable withholding tax.

Debentures

Each Debenture will have an initial maturity date of January 22, 2015 (the "Initial Maturity Date"). If the Acquisition closing does not occur prior to a Termination Event, the maturity date of the Debentures will remain the Initial Maturity Date. If the Debentures mature on the Initial Maturity Date, GuestLogix will return to holders of the Debentures an amount per Debenture equal to the offering price plus accrued and unpaid interest thereon up to, but excluding, the Initial Maturity Date. If the Acquisition closing occurs prior to a Termination Event, the maturity date of the Debentures will be automatically extended from the Initial Maturity Date to December 31, 2019 (the "Final Maturity Date").

The Debentures will have an interest rate of 7.00% per annum, payable semi-annually in arrears on the last day of June and December in each year commencing on June 30, 2015. The Debentures will be convertible at the holder's option at any time prior to the close of business on the earlier of the business day immediately preceding the Final Maturity Date and the date specified by GuestLogix for redemption of the Debentures into fully paid and non-assessable Common Shares at a conversion price of $1.35 per Common Share, being a conversion ratio of approximately 740.7408 Common Shares for each $1,000 principal amount of Debentures.

None of the securities to be issued in the Offering or the Concurrent Private Placement have been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Closing of Offerings

GuestLogix will file a short form prospectus qualifying the issuance of the Subscription Receipts and the Debentures in all provinces, other than Quebec, pursuant to National Instrument 44-101 - Short Form Prospectus Distributions. The Offering and the Concurrent Private Placement are expected to close on or about December 22, 2014 and are subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange. GuestLogix has granted the Underwriters an option to purchase an additional 3,000,000 Subscription Receipts, at an issue price of $0.95 per Subscription Receipt, as well as up to an additional $3,000,000 in aggregate principal amount of Debentures, for additional gross proceeds of up to $5,850,000, and for total gross proceeds of up to $44,850,000 (the "Over-Allotment Options"). The Over-Allotment Options are exercisable at any time up to 30 days following the date of the closing of the Offering.

About GuestLogix

GuestLogix Inc. (TSX:GXI), is a leading global provider of ancillary-focused merchandising, payment and business intelligence technology to airlines and the passenger travel industry, both onboard and off board. Bringing over a decade of expertise as the industry's most trusted onboard transaction processing partner to airlines, rail operators, and elsewhere in the passenger travel industry, GuestLogix powers the industry's growing reliance on ancillary revenue generation. Both direct to operators as well as through partnerships with global leaders in catering, duty-free, inflight entertainment, and self-service retail experts, the Company provides the payment services touching over 1 billion travelling consumers each year. GuestLogix' global headquarters and centre for product innovation is located in Toronto, with regional head offices located in Dallas, London, and Hong Kong. More information is available at www.guestlogix.com.

Additional Information

This press release is not intended to form the basis of any investment decision. It does not constitute an offer or invitation for the sale or purchase of any securities, businesses, and/or assets or any recommendation or commitment by GuestLogix Inc. or any other person and neither this press release, nor its contents nor any other written or oral information made available in connection with the transaction shall form the basis of any contract. This press release has been prepared without reference to your particular investment objectives, financial situation, taxation position, and particular needs.

If you have any doubt regarding these matters, you should consult your financial or other advisers.

This press release does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate the Transaction. No representation or warranty, express or implied, is given and, so far as is permitted by law and no responsibility or liability is accepted by any person, with respect to the accuracy or completeness of the press release or its contents or any oral or written communication in connection with the Transaction. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts contained in this press release. By publishing this press release, GuestLogix does not undertake any obligation to provide any additional information or to update this press release or any additional information or to correct any inaccuracies which may become apparent, except as required by law.

Forward-Looking Statements

This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with GuestLogix' business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", "accelerates transformation", "immediately accretive", "elevated growth trajectory" and similar expressions to the extent they relate to the Company or its management. Forward-looking statements include statements, without limitation, with respect to: the use of proceeds of the financing with respect to the Transaction, expected financial performance, OpenJaw's business model and GuestLogix' business model and business post-Transaction, the expected closing date of the Transaction and the anticipated benefits of the Transaction. (The forward-looking statements are not historical facts, but reflect GuestLogix' current expectations regarding future results or events, including expectations and assumptions concerning availability of capital resources, strength of market conditions, customer demand, satisfaction of all closing conditions of the Transaction and the benefits of the Transaction for GuestLogix from a margin and accretion perspective (each of which may be impacted by the realization and timing of any potential synergies and the operating performance of OpenJaw and GuestLogix).

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks related to: possible failure to realize the anticipated benefits of the Transaction, higher than anticipated costs or longer than anticipated time to integrate OpenJaw's business, the possible failure to achieve the full amount of anticipated cost synergies, the failure to close the Transaction, increased indebtedness, transitional risk, potential undisclosed costs or liabilities associated with the Transaction, the fact that historical and pro forma combined financial information may not be representative of GuestLogix' results post-Transaction, the absence of a financing condition in the share purchase agreement with OpenJaw, the reliance on information provided by OpenJaw and the dilutive effect on the holders of Common Shares.

To the extent any forward-looking statements in this press release constitutes future-oriented financial information or financial outlooks within the meaning of securities laws, such information is being provided to demonstrate the potential benefits of the financings and the Transaction and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to the risks set out above.

Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. All subsequent oral or written forward-looking statements attributable to GuestLogix or any of its directors, officers or employees, or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. GuestLogix assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements expect as required by applicable laws.

THIS NEWS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES AND IS NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF GUESTLOGIX, NOR SHALL IT FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT FOR PURCHASE OR SUBSCRIPTION. THE SUBSCRIPTION RECEIPTS AND DEBENTURES OF GUESTLOGIX WILL ONLY BE OFFERED IN THE PROVINCES OF CANADA, OTHER THAN QUEBEC, BY MEANS OF THE PROSPECTUS REFERRED TO ABOVE. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE US SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM.

NON-IFRS MEASURES

© 2014 GuestLogix. All Rights Reserved. ®OnTouch is a trademark of GuestLogix Inc. and is registered in the United States and may be pending or registered in other countries. All other trademarks and trade names are the property of their respective owners.

Contact Information