Fundamental Global today announced that its majority owned subsidiary, Strong Global Entertainment, has announced the proposed acquisition of Strong/MDI Screen Systems by FG Acquisition, a special purpose acquisition company, pursuant to an acquisition agreement dated May 3 between FGAC, Strong Global, MDI, FGAC Investors and CG Investments VII.
FGAC will change its name on closing of the MDI Acquisition to Saltire Holdings.
Fundamental Global CEO Kyle Cerminara said, “We are excited to announce the launch of Saltire Holdings with FGAC’s acquisition of Strong/MDI. We recently announced the sale of our Digital Ignition business, and the proposed sale of MDI is aligned with our strategic objectives at Fundamental Global. For MDI, being part of Saltire is expected to provide greater access to the Canadian financial markets as the management team executes on its growth plans. For Strong Global and Fundamental Global, this represents an opportunity to unlock the value of our investment in MDI, and we look forward to the future growth and success of Saltire.”
The MDI Acquisition values MDI at a pre-money valuation of $30 million (as adjusted pursuant to the acquisition agreement). On closing, FGAC will satisfy the purchase price with cash, in an amount equal to 25 percent of the net proceeds of a concurrent private placement, if any, the issuance to Strong Global of preferred shares with an initial preferred share redemption amount of $9,000,000, and the issuance to Strong Global of that number of common shares of FGAC equal to the MDI equity value minus the cash consideration and the preferred shares, divided by ten dollars.