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Report On Business Postmedia providing $40-million of advertising to Indochino for cut of revenue

Indochino Kyle Vucko is shown here in this 2013 file photo at a temporary storefront space in Washington, D.C.

Thomas Graves/The Globe and Mail

Postmedia Network Inc. has struck a deal with Indochino to provide $40-million of advertising to the custom clothier in exchange for an undisclosed portion of its revenue in the Canadian market.

Postmedia's print and digital brands include national and regional newspapers such as the National Post, the Vancouver Sun, the Ottawa Citizen and the Calgary Herald.

As part of its agreement with Vancouver-based Indochino, Postmedia will also have the opportunity to buy discounted shares of Indochino if the company goes public.

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It isn't the first time Postmedia has exchanged advertising with a company for a cut of its future revenue.

In 2016, Mogo Finance Technology Inc. signed a three-year agreement for at least $50-million of promotional commitments from Postmedia in exchange for a percentage of revenue and rights to buy stock in the digital financial company.

It also forged a similar deal with Agility Forex Ltd.'s international payments and currency transfers services, though Postmedia did not disclose the duration of the deal, the value of the advertising space or the revenue it expects to receive.

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