TPG TPG Inc

Boat Rocker to Receive 8.8% in TPG's New Talent Management and Representation Company 

Boat Rocker Provides Updated 2024 Outlook

Management to Host a Call at 11 am ET 

All figures in Canadian Dollars unless otherwise stated

TORONTO, June 28, 2024 /CNW/ - Boat Rocker Media Inc. ("Boat Rocker") (TSX: BRMI), an independent, integrated global entertainment company, today announced that it has sold its stake in talent management company Untitled Entertainment LLC ("Untitled") to TPG (NASDAQ: TPG) for proceeds comprised of cash in the amount of approximately $51.6 million CAD¹ and 8.8%² of the outstanding common equity in TPG's new talent management company ("the Company") ("the Transaction"). 

The Company intends to acquire, invest in, and build a diversified global business centered on talent management, representation, and adjacent verticals. TPG is a leading global investment firm with significant experience investing across the entertainment, talent management, media, and music industries, with investments including Calm, Creative Artists Agency (CAA), DirecTV, Entertainment Partners, Fandom, MusixMatch, and Spotify. 

Boat Rocker intends to use the cash proceeds from the Transaction primarily to support its content-first strategy. Anticipating the improvement of macroeconomic dynamics, Boat Rocker is increasing its focus on investing in owned IP, particularly in scripted television, premium documentary programming, and animation and its exploitation internationally. Boat Rocker may also use cash proceeds to pursue strategic M&A opportunities in a changing market.

Boat Rocker's content-first strategy continues to gain momentum. Boat Rocker recently announced its new owned scripted series BET, based on the hit Manga series Kakegurui, with Netflix. Owned IP title American Rust: Broken Justice premiered in Amazon Prime Video's Top 10 most watched shows while Orphan Black: Echoes is seeing strong international sales demand and recently had its highly anticipated premiere on AMC, AMC+, and BBC America. Hit scripted series Palm Royale, starring Kristen Wiig, Ricky Martin, with Laura Dern, Allison Janney, and extra special guest star Carol Burnett, was recently renewed for a second season by Apple TV+. New and forthcoming premium documentaries include Merchants of Joy and the Sundance-premiering War Game, which will begin a theatrical release August 2nd through Submarine Deluxe. Boat Rocker is also working with world-class partners in new territories on international co-production and completion financing opportunities including Ireland's Deadpan Pictures on Video Nasty and Mix Tape with Ireland's Subotica and Australia's Aquarius Films.

As part of the Transaction, Michel Pratte has been named CEO of the newly established Company and Eric Taitz its COO, both effective immediately. Mr. Pratte has worked for Boat Rocker for over 15 years in various leadership roles while Mr. Taitz has also held a variety of key roles at Boat Rocker since 2018. Mr. Pratte will receive a transaction bonus from Boat Rocker in the form of cash and common equity in the Company. The proceeds to Boat Rocker described above are net of Mr. Pratte's transaction bonus.

"Collaborating with Untitled over the last five years has opened the door to strong partnerships and talent relationships," said Ivan Schneeberg and David Fortier, Co-Executive Chairmen, Boat Rocker Media and Co-Chairmen, Boat Rocker Studios. "This exciting new opportunity to carry on doing business with Untitled, as well as partner with world-class investor TPG, enables us to maintain our ties to the representation space while we focus on our core business: owned IP. Through our partnership with the Company, we're also delighted to continue working with Michel and Eric, two extremely capable individuals who possess a deep understanding of the talent management business. Given continued uncertainty in the market, we believe more strongly than ever that using our capital and corporate resources to maximize control over our destiny and provide the most flexibility in our IP strategy is the best path forward."

"Since going public, we have remained focused on producing premium IP for buyers around the globe, and creating a strong financial position," said John Young, Chief Executive Officer, Boat Rocker Media. "In selling our stake in Untitled and investing in the Company with TPG and others, we see an attractive opportunity to continue down this path. The sale generates a strong return on our investment and better positions Boat Rocker for long-term success. We have the opportunity to maintain diversification in our portfolio while at the same time further streamline our core operations. We continue to operate debt-free³, now with an even stronger balance sheet to invest in and create industry leading IP." 

Boat Rocker continues to be impacted by delays in new content commissions, renewals, production, and paid development which are broadly impacting the media and entertainment industry. Taking into consideration these factors, as well as the sale of Untitled and regular course timing fluctuations on deliveries, Boat Rocker now anticipates Full Year 2024 Adjusted EBITDA⁴ to be approximately $10 million. With enhanced cash available for use⁵ of over $75.0M and no corporate debt³, Boat Rocker will continue to pursue an assertive content investment strategy. Boat Rocker's content strategy is supported by sound operational management and a continued focus on prudent cost management across production and corporate.

Boat Rocker does not expect the Transaction to have a material impact on its other business lines, with all units operating as usual. 

TPG Growth, the middle market and growth equity platform of TPG, is funding the investment.

LionTree Advisors acted as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Stikeman Elliott LLP served as legal advisors to Boat Rocker on the Transaction.

Management will host a conference call today (Friday, June 28) at 11 am ET to discuss the Transaction.

Dial-in Information

RapidConnect URL: https://emportal.ink/4cEOKBP

Local Toronto: 416-764-8650

North American Toll Free: 888-664-6383

About TPG
TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $224 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and its unique strategy is driven by collaboration, innovation and inclusion. Its teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for its fund investors, portfolio companies, management teams, and communities. For more information, visit www.tpg.com.

About Boat Rocker
Boat Rocker (TSX: BRMI) is the home for creative visionaries. An independent, integrated global entertainment company, Boat Rocker's purpose is to tell stories and build iconic brands across all genres and mediums. With offices around the world, Boat Rocker's creative and commercial capabilities include Scripted, Unscripted, and Kids and Family television production, distribution, brand & franchise management, a world-class animation studio, and talent management through a minority stake in a new company launched by TPG. A selection of Boat Rocker's projects include: Invasion (Apple TV+), Palm Royale (Apple TV+), Orphan Black: Echoes (AMC), American Rust: Broken Justice (Prime Video), Beacon 23 (MGM+), Pretty Baby: Brooke Shields (Hulu), Downey's Dream Cars (Max), BS High (HBO), Orphan Black (BBC AMERICA, CTV Sci-Fi Channel), Dear…(Apple TV+), Billie Eilish: The World's a Little Blurry (Apple TV+), The Next Step (BBC, Corus, CBC), Daniel Spellbound (Netflix), and Dino Ranch (Disney+, Disney Junior, CBC). For more information, please visit www.boatrocker.com.

Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Boat Rocker's financial information reported under IFRS. The intent of using non-IFRS measures is to provide investors with supplemental measures of Boat Rocker's operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures, in addition to providing a greater understanding of Boat Rocker's liquidity position and available financial resources. Boat Rocker's management uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets, and to determine components of management compensation. Boat Rocker also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers.

Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2024 and 2023 are available under Boat Rocker's profile on SEDAR+ (www.sedarplus.ca). The non-IFRS measures Boat Rocker uses include: EBITDA, Adjusted EBITDA, Cash Available for Use and Cash Required for Use in Productions.

Adjusted EBITDA is defined as EBITDA before certain expenses, costs, charges or benefits incurred in the period which in management's view are not indicative of continuing operations, including: amortization of non-cash program intangibles, change in fair value of other financial liabilities related to put options, certain other financial liabilities, convertible debt and contingent consideration, share-based compensation, professional and consulting fees relating to non-core operating activities, non-recoupable COVID-19 costs, goodwill impairment, reorganization costs, loss on debt modifications, gain on settlement of loans and borrowings, gain or loss on sale of assets, unrealized gains or losses on foreign exchange, unrealized gains or losses on forward currency contracts, and other costs not indicative of Boat Rocker's core operating results. Adjusted EBITDA is used by management as a measure of Boat Rocker's operating performance.

Cash Available for Use is defined as the total cash of Boat Rocker less Cash Required for Use in Productions. Cash Available for Use funds ongoing working capital requirements, principal and interest payments on corporate debt as well as ongoing development and growth efforts and thus is an important liquidity measure that management uses to monitor the business on an ongoing basis.

Forward-Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects Boat Rocker's current expectations regarding future events. Forward-looking information is based on a number of assumptions, many of which are beyond Boat Rocker's control. Such assumptions include, but are not limited to, the factors discussed under "Outlook" in Boat Rocker's annual MD&A dated March 28, 2024. Forward-looking information is also subject to a number of specific and general risks. A comprehensive summary of the risks and uncertainties that may affect the business of Boat Rocker is set out in Boat Rocker's Annual Information Form dated March 28, 2024 and in Boat Rocker's annual MD&A of the same date. The risks and uncertainties described therein are not the only ones Boat Rocker faces. Additional risks and uncertainties not presently known to Boat Rocker or that it currently believes to be immaterial may also materially adversely affect Boat Rocker's business, assets, liabilities, financial condition, results of operations, prospects, cash flows and the value and future trading price of the Subordinate Voting Shares. Boat Rocker does not undertake any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

SOURCE Boat Rocker Media Inc.