Date: June 12th, 2003
TORONTO, Ontario (June 12, 2003) – MDC Corporation Inc. (“MDC”) and Custom Direct Income Fund (the “Fund”) announced today that the underwriters plan to exercise their over-allotment option to purchase 1,650,000 units of the Fund, raising additional gross proceeds of $16.5 million.
The closing will result in total gross proceeds from the Fund’s initial public offering of $126.5 million. The gross proceeds of the offering and the term loan portion of Custom Direct’s credit facility (before commissions, fees and expenses) will total $178.5 million and will be paid (net of commissions, fees and expenses) to MDC, directly and through a subsidiary, for the 80% interest in Custom Direct.
Subsequent to the exercise of the over-allotment option, MDC will own 19.0% of the Fund (or 2,963,804 units) and a 20% subordinated interest in the business (which it has agreed not to sell until after December 31, 2003) for a fully diluted interest in the Fund of 35.2%.
The over-allotment closing is expected to occur on or before June 16, 2003.
The offering has been underwritten by a syndicate led by CIBC World Markets Inc. and TD Securities Inc., which includes Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc. and Griffiths McBurney & Partners.
The Fund units have not been registered under the United States 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.
“We are delighted with the market’s strong response to this offering. The exercise of the over-allotment option provides MDC with further financial resources required to execute its recently announced plan of capitalizing on the tremendous opportunities presenting themselves in the marketing services sector. ” said Miles S. Nadal, Chairman, President and Chief Executive Officer of MDC.
About Custom Direct
Based in Maryland and Arkansas, Custom Direct has been selling cheques and cheque related accessories across the United States since 1992 and offers the industry’s widest selection of product designs. Custom Direct is the second largest participant in the direct-to-consumer segment of the U.S. cheque industry with sales and EBITDA for the year ending December 31, 2002 of approximately US$103 million and US$20 million respectively.
About MDC Corporation Inc. (“MDC”)
MDC is a publicly traded international business services organization with operating units in Canada, the United States, United Kingdom and Australia. MDC provides marketing communication services, through Maxxcom Inc., and offers security sensitive transaction products and services in four primary areas: personalized transaction products such as personal and business cheques; electronic transaction products such as credit, debit, telephone & smart cards; secure ticketing products, such as airline, transit and event tickets; and stamps, both postal and excise.
About Maxxcom Inc.
Maxxcom, a subsidiary of MDC, is a multi-national business services company with operating units in Canada, the United States and the United Kingdom. Maxxcom is built around entrepreneurial partner firms that provide a comprehensive range of communications services to clients in North America and the United Kingdom. Services include advertising, direct marketing, database management, sales promotion, corporate communications, marketing research, corporate identity and branding, and interactive marketing. Maxxcom Shares are traded on the Toronto Stock Exchange under the symbol MXX.