Propel Announces Closing of C$115 Million Bought Deal Offering of Subscription Receipts

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TORONTO, Oct. 3, 2024 /CNW/ - Propel Holdings Inc. ("Propel" or the "Company") (TSX: PRL) the fintech facilitating access to credit for underserved consumers, today announced that it has closed its previously announced bought deal offering of 4,186,000 subscription receipts of the Company ("Subscription Receipts") (including 546,000 Subscription Receipts issued pursuant to the exercise in full by the syndicate of Underwriters (defined below) of their over-allotment option granted by the Company), at a price of C$27.50 per Subscription Receipt, for gross aggregate proceeds of  C$115,115,000 (the "Offering"). The Subscription Receipts issued pursuant to the Offering will trade on the Toronto Stock Exchange under the ticker symbol PRL.R.

The net proceeds from the Offering will be used to fund the purchase price of the previously announced acquisition of Stagemount Limited (dba "QuidMarket"), a leading digital UK-based fintech lender specializing in credit for underserved consumers (the "Acquisition"). The balance of net proceeds will be used for working capital and general corporate purposes. The underwriting syndicate was co-led by Canaccord Genuity Corp. and Scotia Capital Inc. and includes Eight Capital, Raymond James Ltd., INFOR Financial Inc., Roth Canada, Inc. and Ventum Financial Corp. (collectively, the "Underwriters"). The proceeds from the sale of the Subscription Receipts will be held by an escrow agent pending the fulfillment or waiver of all outstanding conditions precedent to closing of the Acquisition (other than the payment of the consideration for the Acquisition). There can be no assurance that the applicable closing conditions will be met or that the Acquisition will be consummated.

Upon the closing of the Acquisition: (a) one common share will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder thereof; and (b) an amount per Subscription Receipt equal to the per-share cash dividends declared by the Company on the common shares to holders of record on a date during the period that the Subscription Receipts are outstanding, net of any applicable withholding taxes, will become payable in respect of each Subscription Receipt.

If the Acquisition is not completed as described above by March 26, 2025 or if the Acquisition is terminated at an earlier time, the gross proceeds of the Offering and pro rata entitlement to interest earned or deemed to be earned on the gross proceeds of the Offering, net of any applicable taxes, will be paid to holders of the Subscription Receipts, and the Subscription Receipts will be cancelled. The Acquisition is expected to close in the fourth quarter of 2024 or the first quarter of 2025, subject to customary closing conditions and regulatory approvals.

The Subscription Receipts have not been registered under the United States Securities Act of 1933, as amended, or under any state securities laws, and may not be offered, sold or indirectly, or delivered within the United States of America and its territories and possessions or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of such Act. This release does not constitute an offer to sell or a solicitation to buy such securities in the United States.

About Propel

Propel Holdings (TSX: PRL) is the fintech company building a new world of financial opportunity for consumers, partners, and investors. Propel's operating brands — Fora Credit, CreditFresh and MoneyKey — and our Lending-as-a-Service product line facilitate access to credit for consumers underserved by traditional financial institutions. Through its AI-powered platform, Propel evaluates customers in a more comprehensive way than traditional credit scores can. The result is better products and an expanded credit market for consumers while creating sustainable, profitable growth for Propel. Our revolutionary fintech platform has already helped consumers access over one million loans and lines of credit and over one billion dollars in credit. At Propel, we are here to change the way customers, partners and investors succeed together. Learn more at www.propelholdings.com.

(www.foracredit.ca, www.creditfresh.com, www.moneykey.com)

Forward Looking Statements

This press release contains certain forward-looking statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation that are based on Propel's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In particular, this press release contains forward-looking statements pertaining to the closing of the Offering and the use of the net proceeds from the Offering. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "intend", "estimate", "continue", "anticipate" or the negative of these terms or variations of them or similar terminology suggesting future outcomes, events or performance. The forward-looking statements in this press release reflect management's current beliefs and are based on information currently available to management, and are based on certain assumptions that Propel has made in respect thereof as at the date of this press release regarding, among other things: the satisfaction of the conditions to closing of the Acquisition and the Offering in a timely manner, including receipt of all necessary approvals; that both the Acquisition and the Offering will be completed on terms consistent with management's current expectations; that Propel has and will have available capital to fund the Acquisition and its capital expenditures, among other things; the success of Propel's operations; the ability of Propel to maintain current credit ratings; the availability of capital to fund the Acquisition and future capital requirements relating to existing assets and projects; future operating costs, including costs associated with regulatory compliance in the UK; that all required regulatory approvals can be obtained on the necessary terms in a timely manner; prevailing regulatory and tax laws and regulations; maintenance of operating margins; and certain other assumptions in respect of Propel's forward-looking statements detailed in Propel's Annual Information Form for the year ended December 31, 2023 (the "AIF"), Management's Discussion and Analysis for the years ended December 31, 2023 and 2022 (the "Annual MD&A") and Management's Discussion and Analysis for the three and six months ended June 30, 2024 (the "Interim MD&A") and from time to time in Propel's public disclosure documents available at www.sedarplus.ca and through Propel's website at www.propelholdings.com.

Although Propel believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to: the ability of Propel and QuidMarket to receive all necessary regulatory approvals and satisfy all other necessary conditions to closing of the Acquisition on a timely basis or at all; the failure to realize the anticipated benefits and synergies of the Acquisition following completion thereof due to integration or other issues; an inability to complete the Offering or other necessary financings in respect of the Acquisition in accordance with management's current expectations or at all; the highly competitive nature of the industry in which Propel operates and the related impact of competitive entities and pricing; reliance on third parties to successfully operate and maintain certain assets; non-performance or default by counterparties to agreements with Propel or one or more of its affiliates; actions taken by governmental or regulatory authorities and costs associated therewith; fluctuations in operating results; adverse general economic and market conditions in Canada, The US, the United Kingdom and worldwide; the ability of Propel to access various sources of debt and equity capital on acceptable terms; changes in credit ratings; counterparty credit risk; and certain other risks and uncertainties detailed in the AIF, Annual MD&A, Interim MD&A, the Prospectus Supplement and from time to time in Propel's public disclosure documents available at www.sedarplus.ca and through Propel's website at www.propelholdings.com. This list of risk factors should not be construed as exhaustive and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change. Propel does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Propel Holdings Inc.