This merger will result in Codere Online, valued at approximately $350 million, becoming a public company, traded on the US Nasdaq stock market. Existing Codere Online management will continue operating the business and Codere Group will maintain majority ownership post-business combination.

“We are proud of this deal, which will provide our online team with the financial resources needed to grow Codere Online and take it to a new, higher level. It is a good signal of the value we have been able to create in the last three years boosting this business unit”, explains Vicente Di Loreto, CEO of Codere Group.

Moshe Edree, Managing Director of Codere Online, said “we are thrilled to partner with DD3. This deal brings together the renowned Codere brand and our deep expertise in growing online gaming businesses with a world-class sponsor like DD3 that has a proven track record of building businesses through a team of seasoned investors. By going public and with the new capitalization, we will be in a superb position to leverage our online business in our core countries of Spain, Italy, Mexico, Colombia and Panama, as well as the City of Buenos Aires, where we expect to start operating in late 2021, to fuel our further expansion in other high-growth Latin American markets.”

As such, Codere Online seeks to take its business model in Spain and Mexico as a base to deploy in other markets where the company is already present, such as Colombia, Panama or in the City of Buenos Aires, as well as being a pioneer in those regions in which the activity could soon be regulated, such as Brazil, Chile, Peru, Uruguay or other regions of Argentina, all while analyzing options to access the Hispanic online gambling niche in the United States.

Martin Werner, founding partner of DD3 Capital Partners said, “we are excited to partner with Moshe and his team to bring Codere Online to the public markets. The omnichannel presence of Codere, paired with the expansive addressable market and limited competition from global gaming operators, gives Codere Online a unique advantage in their expansion across Latin America.”

Transaction overview

The business combination values the combined company at an estimated enterprise value of approximately $350 million, or 2.3x Codere Online’s estimated 2022 revenue of approximately $150 million.

Four institutional investors (DD3 Capital Partners Baron Funds, MG Capital, y LarrainVial) have committed to a private investment of more than $67 million that will close concurrently with the business combination and Baron Funds has committed to roll-over approximately $10 million of shares in the SPAC, resulting in minimum transaction proceeds of $77 million.

DD3 has $125 million of cash in its trust account that, together with the private investment will be used to fund marketing expenditures, technology and platform improvements and expansion into new high-growth markets.

The respective managing bodies of Codere Online and DD3 have approved the proposed business combination. Completion of the proposed business combination is expected in the fourth quarter of 2021.

Additional information about the proposed business combination is available at www.sec.gov and in the investors section of the Codere Group website https://www.grupocodere.com/accionistas-inversores/,, as well as on the recently launched Codere Online website  www.codereonline.com.

Grupo Codere continues with the financial restructuring process started in April

This important transaction does not imply any changes to the restructuring process of the company announced to the market in April as a consequence of the severe liquidity problems that the group is going through as a result of the pandemic.

The liquidity that this transaction generates will be invested mainly in Codere Online. The rest of the group could only receive up to a maximum amount of 30 million dollars, subject to the fulfillment of certain conditions. Additionally, the valuation obtained for our online business is not an adequate reference for the rest of the company assets or its retail operation.

The group will continue to inform about the restructuring process as relevant milestones are met and reminds all stakeholders that Codere S.A. will reduce its ownership in the new consolidated group to 5% (and will additionally receive warrants that will entitle shareholders to receive up to 15% of the share capital subject to certain conditions) as described in the relevant communications regarding the restructuring. Once the financial restructuring has been completed, the company expects to proceed with its liquidation, thus losing its condition as a listed company.