VerticalScope FORA-T founder and chief executive Rob Laidlaw has been appointed chair of the company, replacing Paul Rivett, who is stepping down after finalizing a corporate divorce with a former business partner.
Marina Glogovac, who was briefly president of the Toronto Star until last November, is also resigning from the board of directors at VerticalScope Holdings Inc.
“It was a pleasure for us to help bring this great company to the public markets and to serve on the board,” Mr. Rivett said in a press release.
The board shakeup at the Toronto-based digital media company comes after Mr. Rivett and former business partner Jordan Bitove completed an arbitration process to divide the assets of NordStar Capital, a private equity firm they formed to purchase Torstar Corp. for $60-million in 2020. In addition to the Toronto Star and community newspaper publisher Metroland Media Group, the acquisition gave them a large ownership stake in VerticalScope that amounted to 37 per cent after an initial public offering in 2021.
The two soon fell out over a number of issues, including cost-cutting at the Toronto Star and Metroland, and personnel decisions such as the hiring of Ms. Glogovac. Mr. Rivett was a strong supporter of her role as Toronto Star president, whereas Mr. Bitove did not want to bring her on board.
Mr. Rivett went to court last September seeking to break up NordStar, but he and Mr. Bitove instead pursued a private mediation and arbitration process to resolve their dispute. In November, Mr. Bitove took over the Toronto Star and Metroland, and Mr. Rivett left Torstar.
The two men formally completed their split on Wednesday, according to two sources familiar with the matter. (The Globe and Mail is not identifying the sources because they have not been authorized to talk publicly.)
As a result, about 3.3 million subordinate shares in VerticalScope – an 18-per-cent stake – will go to Tevir Capital LP Ltd., which is controlled by family members of Mr. Rivett, according to a press release. NordStar, now solely owned by Mr. Bitove, will retain a 17.6-per-cent stake. NordStar divested another 1.4 million shares to an unaffiliated third party, according to VerticalScope’s press release.
One source familiar with the matter said the shares were transferred to Canso Investment Counsel Ltd. to repay debt. The Richmond Hill, Ont.-based investment manager, a major lender to Postmedia Network Canada Corp., financed the bulk of NordStar’s deal to acquire Torstar in 2020.
A representative for Canso declined to comment.
Both Mr. Bitove and Mr. Rivett will retain an ownership stake in NorthStar Gaming Inc., an online casino and sports-book they launched together. NorthStar is currently going public on the Canadian Securities Exchange through a reverse takeover, and the transaction is expected to close by the end of the month.
NordStar, which has the right to nominate a director to the VerticalScope board, put forward Philip Evershed to fill Mr. Rivett’s seat. Mr. Evershed is a managing partner at PointNorth Capital, an investment firm co-founded by Mr. Bitove’s brother John.
VerticalScope, which operates more than 1,200 community web forums, has not escaped the broad downturn affecting tech companies. Shares have fallen more than 65 per cent in the past year and last week the company said it would cut 60 jobs, or about 22 per cent of its work force. “We grew our headcount aggressively over the last few years. With the economic uncertainty that lies ahead, we must prioritize our biggest opportunities and make sure we have the proper cost structure in place to pursue them,” Mr. Laidlaw said in a statement.
Joe Castaldo
Andrew Willis