TORONTO – Independent telecom and TV service provider VMedia has brokered an agreement with Phoenix Canada Oil Company that it says will inject new capital to help fund ongoing growth.
Financial terms of the deal, which is being structured as a reverse takeover, were not publicly disclosed at this time.
The two organizations have signed a non-binding letter of intent dated October 23, 2018 that will see Phoenix initially acquire VMedia through a share issuance, though upon conclusion of the transaction, the new entity will be controlled by VMedia’s current controlling shareholders, said VMedia co-founder George Burger in an interview with Cartt.ca.
“Financing is what’s driving this opportunity,” said Burger. “So for us, it does offer capital and also the opportunity to have more liquid stock to be able to facilitate other transactions, other financings, on a broader scale than strictly resorting to the private equity market.”
The deal is currently in the early stages and is not expected to close for some months, pending due diligence as well as regulatory and shareholder approvals plus the blessing of the Ontario Superior Court.
“We’re going to be focussing on growing our business and growing it a little more rapidly”, Burger continued. “We have essentially been a bootstrap operation from the beginning – we really haven’t had any outside capital – and so we’ve had to make a lot of sacrifices in terms of how we can go out and acquire customers, and retain customers, and market the business effectively and broadly, so the transaction will certainly help us there. It will also help us expand our IPTV technology and continue to look for live TV streaming solutions, both in terms of developing them ourselves and in terms of exploiting them as products that consumers will want.”
Based in Toronto, Phoenix Canada Oil Company is an oil and gas exploration company that also manages a portfolio of investments and investigates potential investment targets.
“We are pleased to have found a high potential strategic partner who shares our corporate values and has the ability to provide a significant growth opportunity for our shareholders”, added Phoenix CEO Charlotte Moore Hepburn, in the news release. “We are excited about the proposed transaction with VMedia and look forward to working collaboratively with VMedia in pursuit of an expeditious and favourable outcome.”
