Management Board of IMS S.A. (‘Issuer’, ‘IMS’) announces that on 14 August this year, an Investment Agreement (‘Agreement’) was signed to raise capital for its subsidiary, Closer Music Sp. z o.o. (“CM”), engaged in the development and commercialisation of proprietary music libraries. The parties to the Agreement are the Investors:
– two family foundations controlled by Mr Krzysztof Bajołek and his family.
Mr Krzysztof Bajołek is a well-known entrepreneur and investor, founder of the market success brands House and Mohito as well as Answear.com
and
CM and US-based Closer Music Corporation (“CMC”) (a subsidiary of the Issuer through which the Issuer controls CM).
The Investors will invest a total of PLN 4 million at a pre-money valuation of 100% of Closer Music’s shares of PLN 70 million and will thus acquire a total of 643 shares representing 5.4% of CM’s capital after the increase. The Investors have obtained a discount from the current valuation of PLN 80 million, resulting from the Investors’ extensive knowledge, know-how and experience in e-commerce (including building and developing sales platforms), with which the Investors will support CM in the course of its operations.
The CM will use the funds raised for further development, in particular for:
– marketing and promotional activities mainly related to the on-line channel;
– increasing the sales force and acquiring new customers;
– expanding the on-line sales application.
Investors have the right to exchange their CM shares for CMC shares according to a fixed parity of 1 CM share = 1,127.36829 CMC shares, i.e. exchange 643 CM shares for 724,898 CMC shares. The parity is identical to the investment agreement signed on 12 November 2023 with JRH and EKIPA (the Issuer informed about it in current report ESPI 43/2023 of 13 November 2023). Unlike the aforementioned agreement with JRH and Ekipa of last November, the current Agreement does not provide for the conversion of CM shares into IMS S.A. shares.
The Agreement also contains, inter alia, CM’s future corporate governance rules, customary transaction rights (e.g. anti-dilution, tag-along, drag-along, pre-emptive rights), representations and warranties and contractual penalties adequate and determined at arm’s length for this type of transaction.
The Agreement shall enter into force upon its conclusion and shall remain in force until the date on which the Investors’ aggregate holding falls below 2.7% of the total number of all shares of CM.