Thanks to a unnamed but “long-term-focused, major, trillion-dollar Canadian institutional asset manager” BBTV (BBTV Stock Quote, Chart, News, Analysts, Financials TSX:BBTV) has a much better-looking balance sheet after its latest financing moves, which also leave room for M&A activity for the Vancouver-based media tech company.
BBTV, a provider of end-to-end online content management geared to give creators the ability to monetize their content and drive viewership, announced on Wednesday two financing rounds for aggregate gross proceeds of $35 million.
One will see underwriters purchase 15,000 convertible debentures at $1,000 apiece while the other is a private placement sale of 20,000 convertible debentures at the issue price. In both cases, the convertible debentures having a maturity date of five years from closing and give BBTV the right to force conversion of the principal amount at any time past four months and a day from closing.
BBTV said it plans to use the net proceeds to prepay $20 million outstanding on its senior secured convertible promissory loan with its senior secured lender UFA Film and Femseh GmbH, along with making funds available for M&A transactions and working capital and general corporate purposes.
At the same time, BBTV announced an agreement with UFA Film and Femseh to amend the terms of its loan, extending the maturity date among other amendments.
“We are pleased to announce this financing package which in our view is a strong endorsement from the financial community of our mission, vision and execution of our strategic business plan,” said Shahrzad Rafati, BBTV Chair and CEO, in a press release.
Rafati said the financing and deferment represents a “significant boost” to the company’s balance sheet and gives capital to fund BBTV’s growth strategies.
“We are grateful for the support of the participating shareholders and believe their support is reflective of the strong platform for growth that we’ve created at BBTV and our commitment to provide content creators with best in class tech-enabled creator monetization solutions,” Rafati wrote.
Earlier this month, BBTV announced its first quarter financials which featured revenue up 16 per cent year-over-year to $106.5 million and an adjusted EBITDA loss of $2.5 million compared to a loss of $2.4 million a year earlier.
The quarter saw BBTV expand its services to Instagram and TikTok influencers while taking on multiple new creators and establishing content distribution agreements on Roku and Amazon Fire. The company said it had the second-most unique monthly views in the month of January among digital platforms with more than 600 million global views which consumed over 50 billion minutes of video content, which was the most among media companies, BBTV said.
“Our first quarter performance showed solid progress over last year,” said Rafati in the first quarter 2021 press release on May 13. “We delivered 16-per-cent revenue growth in Q1, which is seasonally the industry-wide lowest quarter. We remain bullish on the next few quarters as more creators onboard, we grow our Plus Solutions and we execute on our M&A strategy.”
Dislosure: BBTV is an annual sponsor of Cantech Letter and Nick Waddell owns shares of the company.