Bragg Gaming Group nets $8.7m in funding from institutional investor to support top line growth
Bragg Gaming Group has secured an investment of $8.7m from New York-based institutional fund manager The Lind Partners.
The funding, provided by the Lind Global Fund II LP, will come in the form of a convertible security, with a face value of $10m.
The funding provides an important capital injection for the B2B game technology and content provider and will be used to aid the company’s growth initiatives.
Bragg held cash and cash equivalents of €11m at the end of Q2, down €300k on the same period last year, as a result of the €9m paid in cash towards the acquisition during the quarter.
“We highly appreciate the confidence demonstrated by Lind, and we are excited about the opportunity this growth capital affords Bragg,” said Yaniv Sherman, CEO of Bragg Gaming Group.
“This investment provides capital we intend to deploy in a return-focused manner, to further strengthen our foundation for continued top line and cash flow growth,” he added.
Sherman commented further: “For more than a decade, Lind has demonstrated a tremendous record of success supporting growth companies, and we are confident that Bragg is well positioned to further deliver on our strategic initiatives.
“Importantly, since the beginning of 2021, our focus on enhancing our proprietary content development capabilities and our continued expansion into new regulated iGaming markets, including North America, have driven a significant increase in Bragg’s revenue as well as margin expansion, which has resulted in strong adjusted EBITDA growth.”
Bragg Gaming CEO Yaniv Sherman: “This investment provides capital we intend to deploy in a return-focused manner, to further strengthen our foundation for continued top line and cash flow growth.”
Sherman said this is reflected in Bragg’s expectations for full year 2022 revenue and adjusted EBITDA, with projected growth of 34% and 46%, respectively.The face value of the convertible security will have a 24-month maturity date and can be paid in cash or be converted into common shares in the company at a conversion price equal to 87.5% of the five-day volume weighted average price immediately prior to each conversion. Shares issued upon conversion are subject to a 121-day lock-up period once the deal is closed.
The funding agreement and the issuance of the related securities have been conditionally approved by the Toronto Stock Exchange. Closing of the deal is subject to final TSX approval.
“Lind is extremely excited about its investment in Bragg,” said Phillip Valliere, managing director at The Lind Partners.
“Bragg has rapidly grown its gaming technology businesses and continues to expand its footprint globally.
“We look forward to working with Bragg’s high-caliber management team as it further expands and penetrates new key gaming markets while continuing to drive profitability,” he added.
The Lind Partners manage institutional funds which provide growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK.
Lind’s funds make direct investments ranging from $1m to $30m, invest in syndicated equity offerings and selectively buy assets on market.
Since 2011, the fund manager has completed more than 100 direct investments totalling over $1bn in transaction value.
The agreement with Bragg contains restrictions on how much of the convertible security may be converted in any particular month, which is limited to 1/20 of the outstanding balance or $1m if the exchange volume is above a specified minimum. Conversions may also be accelerated in certain circumstances.
In addition, Bragg has the option at any time to buy back the entire remaining balance of the convertible security. However, in this case Lind will have the right to convert up to 1/3 of the outstanding amount into shares.
In connection with the funding, Lind will be issued a warrant to purchase up to 979,048 common shares at a price of C$9.28 per share for a period of 60 months.
The Benchmark Company is acting as exclusive financial adviser to Bragg in connection with the funding agreement.