Among the start-ups it’s time for mergers: from the board of directors ok to Digital Magics-LVenture

According to current projections based on the exchange ratio of the Merger, it is expected that the shareholders’ agreement concerns shares for approximately 42.21% of the share capital of the new entity resulting from the merger.

exchange ratio

The merger project provides for the exchange ratio of 46 shares of the newly issued combined entity for every 5 Digital Magics shares. This exchange ratio was determined on the basis of a valuation of, respectively, DM and LVG – in terms of contribution to the Combined Entity – of 63/37.

To service the swap, it is expected that the resolution of a share capital increasethrough the issue of a maximum of 111,005,452 ordinary shares, with no par value, to be assigned to the shareholders of DM on the basis of the exchange ratio.

It is expected that the LVG shareholders’ meeting called to approve the merger plan will also be subject to the approval of further capital increases as a function of the transaction and, in particular, a divisible capital increase for a maximum of 892,400 euros, inclusive of share premium, through the issue of a maximum of 1,840,000 shares of the combined entity, with no indication of the nominal value, with a subscription value of 0.485 euro for each share, to be issued to serve the exercise of the DM Warrants, and an increase of
divisible share capital for a maximum amount of 2,814,197 euros, inclusive of share premium, through the issue of a maximum of 5,182,682 shares of the combined entity, with no indication of nominal value, with a subscription value of 0.543 euros for each share, from issue itself to service the stock options of the DM 2021-2027 incentive plan.

Lastly, the LVG board of directors also resolved today – before the approval of
Merger Project and also in order to implement the pre-Merger endowment in favor of LVenture, with a view to the transaction and the related exchange, of a capital contribution of 2.5 million euros – to partially implement the proxy granted to it by the Shareholders’ Meeting Extraordinary of 18 April 2019 for a maximum amount of 8 million. In exercising this delegation, the board, in the light of a binding expression of interest and with an irrevocable subscription commitment presented by the LUISS shareholder, has
therefore resolved to increase the share capital, divisible and against payment, for a maximum amount of 2.5 million euro, at an issue price of 0.43 euro per newly issued share, of which up to 0.086 euro from charged to capital and up to €0.344 as share premium, through the issue of a maximum of 5,813,953 ordinary shares, having the same characteristics as those outstanding at the date of issue,
reserved under subscription to Luiss and divided into two tranches.