TORONTO--(BUSINESS WIRE)--VerticalScope Holdings Inc. (“VerticalScope” or the “Company”) (TSX: FORA), a technology company that has built and operates a cloud-based digital platform for online enthusiast communities, today announced a number of changes to its board of directors (the “Board”). Pursuant to an arbitration award (the “Arbitration Award”) involving NordStar Capital LP (“NordStar”), Paul Rivett, the former Chair of the Board and nominee of NordStar, has resigned from the Board. Marina Glogovac, a former employee in the NordStar group, has also resigned from the Board. Philip Evershed has been appointed to the Board to replace Mr. Rivett as NordStar’s nominee, in accordance with its rights under the investor rights agreement (the “IRA”) entered into with the Company in connection with its initial public offering. Rob Laidlaw, the founder and CEO of VerticalScope, has been appointed as Chair of the Board and Wayne Bigby has been appointed as Lead Independent Director.
“On behalf of our management team and the Board, I would like to thank both Paul and Marina for their invaluable support and guidance on our Board since our initial public offering,” said Mr. Laidlaw. “I am excited to take on the role of Chair and look forward to working with NordStar’s new nominee, Mr. Evershed, and the rest of the Board towards realizing the company’s full potential,” said Mr. Laidlaw. “We will also continue to evaluate prospective candidates to replace Ms. Glogovac.”
“Both Marina and myself wish Rob and the entire VerticalScope team the very best with their wonderful business,” said Mr. Rivett. “It was a pleasure for us to help bring this great company to the public markets and to serve on the Board. We look forward to continuing to watch VerticalScope from the sidelines and remaining committed shareholders and enthusiastic supporters of the company.”
Mr. Evershed is a Managing Partner at PointNorth Capital, an advisory and investment management company focused on non-bank credit opportunities. Mr. Evershed was formerly the Co-Head of Investment Banking and Head of Mergers and Acquisitions at CIBC World Markets and a co-founder and Global Head of Investment Banking at Canaccord Genuity. Mr. Evershed received an M.A. (Economics) from the University of Toronto in 1985 and an Honours B.A. (School of Business and Economics) from Wilfrid Laurier University in 1983.
In connection with the division of NordStar’s assets under the Arbitration Award, there have been changes to NordStar’s shareholdings in the Company and, as a consequence, changes to certain rights and restrictions under the IRA. Prior to the date hereof, NordStar beneficially owned, or exercised control or direction over, 7,860,505 subordinate voting shares of the Company (“SVS”), representing approximately 37% of the issued and outstanding SVS and multiple voting shares of the company (the “MVS”, together with the SVS, the “Shares”), 43% of the issued and outstanding SVS and 16.4% of the total voting rights. Following completion of the division of NordStar’s assets, the Company has been advised that:
- NordStar will continue to beneficially own, or exercise control or direction over, 3,219,500 SVS (representing approximately 15.2% of the issued and outstanding Shares, approximately 17.6% of the issued and outstanding SVS and approximately 6.7% of the total voting rights);
- Tevir Capital LP Ltd., an entity controlled by family members of Mr. Rivett, will receive 3,281,429 SVS previously held by NordStar and its affiliates (representing approximately 15.4% of the issued and outstanding Shares, approximately 18% of the issued and outstanding SVS and approximately 6.9% of the total voting rights), certain of which will be immediately transferred to related parties of Mr. Rivett such that Tevir Capital LP Ltd. will beneficially own, or exercise control or direction over, less than 10% of the outstanding SVS, with none of such persons beneficially owning, or exercising control or direction over, any SVS prior to such transactions; and
- an unaffiliated third party has acquired 1,359,576 SVS previously held by NordStar and its affiliates (representing approximately 6.4% of the issued and outstanding Shares, approximately 7.4% of the issued and outstanding SVS and approximately 2.8% of the total voting rights).
As a result of the foregoing changes in the shareholdings of NordStar and its affiliates, and in accordance with the IRA, RDL Ventures Inc. (“RDL”), an entity controlled by Mr. Laidlaw and the sole holder of the Company’s multiple voting shares (“MVS”), will no longer have any restrictions on the voting of its MVS and will be entitled to vote its MVS on the election of all directors of the Company.
Immediately before and after the foregoing changes in the shareholdings of NordStar, RDL will continue to beneficially own or exercise control or direction over 2,957,265 MVS, representing approximately 13.9% of the total issued and outstanding Shares, 100% of the outstanding MVS and approximately 61.8% of the total voting rights.
RDL may further purchase, hold, trade, dispose or otherwise deal in the securities of VerticalScope, in such manner as it deems appropriate, subject to applicable laws and the terms and conditions of VerticalScope’s articles, and of the coattail agreement, lock-up agreement and IRA entered into by RDL, each as described in the Company’s most recent annual information form. RDL’s head office is 111 Peter Street, Suite 600, Toronto, ON, M5V 2H1.
Additional Early Warning Disclosure
In connection with the dispositions of SVS by the parties outlined above, which were undertaken on February 8, 2023, each SVS was valued at $8.3064 per share and NordStar received consideration in the aggregate amount of $38,550,044.
A copy of each of the early warning reports to be filed by each of the applicable parties with the applicable securities commissions pursuant to the requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues will be made available on SEDAR at www.sedar.com.
NordStar is a partnership existing under the laws of Manitoba and the head office of the general partner of NordStar, NordStar Capital Inc., is located at 222 Bay Street, Suite 3000, Toronto, Ontario M5K 1E7. To obtain a copy of the early warning report filed by NordStar in connection with the transactions outlined above, contact Christopher Rankin, Chief Financial Officer of NordStar Capital Inc., at 416-367-2000.
Tevir Capital LP Ltd. is a corporation existing under the laws of Ontario. The head office of Tevir Capital LP Ltd. and parties related to Paul Rivett is 30 St. Clair West, Toronto, Ontario M4V 3A1. To obtain a copy of the early warning report filed by Tevir Capital LP Ltd. in connection with the transactions outlined above, contact Chris Hewat at 416-863-2400.
About VerticalScope
Founded in 1999 and headquartered in Toronto, Ontario, VerticalScope is a technology company that has built and operates a cloud-based digital platform for online enthusiast communities in high-consumer spending categories. VerticalScope’s mission is to enable people with common interests to connect, explore their passions and share knowledge about the things they love. Through targeted acquisitions and development, VerticalScope has built a portfolio of over 1,200 online communities and over 110 million monthly active users. VerticalScope is listed on the Toronto Stock Exchange (TSX: FORA).
Forward-Looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation that reflects the Company’s current expectations regarding future events. Forward-looking statements in this news release include, but are not limited to, statements relating to the shareholders of NordStar, Tevir Capital LP Ltd. and certain other parties and the Company’s prospects. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 31, 2022, which is available on the Company’s profile on SEDAR at www.sedar.com. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurances can be given that actual results will be consistent with these forward-looking statements. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.
