- EMERGE has entered into a definitive agreement to sell WagJag
for $1M in cash
- EMERGE originally acquired WagJag for $500K in November
2017 from Torstar Corp.
- EMERGE anticipates the sale of WagJag to accelerate further HQ
cost savings in relation to servicing the WagJag business
- Following the Transaction, EMERGE will retain 5 brands across 3
verticals (Pets, Grocery, Golf)
- The Company continues to explore additional strategic
opportunities to strengthen the balance sheet, reduce debt, and
improve the company's overall cash flow
TORONTO, July 24,
2023 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM)
("EMERGE", or the "Company"), a diversified acquirer
and operator of niche e-commerce brands, announces that a
subsidiary of the Company, Emerge Brands Inc. (the
"Seller"), has entered into a definitive asset purchase
agreement (the "Agreement"), with 15124174 Canada Inc. (the
"Buyer"), pursuant to which the Seller proposes to sell to
the Buyer substantially all of the assets related to its WagJag and
BeRightBack business (the "Transaction"). WagJag and
BeRightBack operate a daily deals e-commerce business in
Canada for discounted
vouchers.
Ghassan Halazon, Founder and CEO of
EMERGE commented, "The WagJag case study is now complete.
In November 2017, we acquired a
declining, loss-making business, and today, after a tremendous
amount of work, the business is exhibiting strong double-digit
sales growth lately combined with lean operations, a testament to
the team's efforts. With our shifting priorities, we felt it was
the right time to sell WagJag at a healthy premium to our original
purchase price. Moving forward, we plan to double down on our
largest, most profitable niche vertical opportunities. We expect
this will result in further HQ savings in relation to servicing a
more focused set of brands. We wish the new owners of WagJag all
the best with this long-standing Canadian daily deals brand, and
with the special team that continues on with them."
Pursuant to the Agreement and in consideration for the
Transaction, the Buyer has agreed to pay cash consideration of
$1,000,000 on closing of the
Transaction ("Closing"), subject to certain closing
adjustments.
EMERGE originally acquired WagJag for $500,000 in November
2017 form Torstar Corp. In 2022, WagJag had revenue of
approximately $2M.
"The sale of WagJag is yet another positive step in
strengthening the Company's balance sheet, which remains a top
priority in the near-term. In recent years, we have amassed a
valuable premium e-commerce brand portfolio, including multiple
profitable businesses, and we will continue to relentlessly explore
and prioritize favorable strategic tradeoffs that assist us in
expediting our path to a healthier balance sheet, and ultimately
towards driving stronger cash flows over the long run,"
continued Halazon.
Following the Transaction, EMERGE will retain 5 brands across 3
verticals (Pets, Grocery, Golf) in Canada and the U.S.,
namely WholesalePet, truLOCAL, Carnivore Club, UnderPar,
and JustGolfStuff.
No finder's fees are expected to be paid in connection with the
Transaction.
Subject to the satisfaction of all conditions precedent to the
completion of the Transaction, Closing is expected to occur on or
prior to August 25, 2023 or such
other date as the Seller and the Buyer may agree. Closing of the
Transaction is subject to, among other things, the receipt of third
party and TSX Venture Exchange ("TSXV") approval, if and as
required.
About EMERGE
EMERGE is a diversified acquirer and operator of quality niche
e-commerce brands in Canada and
the U.S. Our subscription and marketplace e-commerce properties
provide our members with access to offerings across our pets,
premium meat/ grocery, and golf verticals. EMERGE was named one of
Canada's Top Growing Companies by
Globe and Mail in 2022 (and 2020), and one of the fastest growing
companies in Canada by the Startup
50 in 2020.
To learn more visit https://www.emerge-commerce.com/
Cautionary notice
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Notice regarding forward-looking
statements
This press release contains certain forward-looking
information and statements ("forward-looking information") within
the meaning of applicable Canadian securities legislation, that are
not based on historical fact, including, without limitation,
statements related to the closing of the Transaction and the timing
thereof, the satisfaction of all conditions precedent to the
closing of the Transaction, including, without limitation, third
party and TSXV approval in respect of the Transaction (if
applicable), any benefit that may be derived by the Company from
the Transaction, including, without limitation, any cost savings or
other material benefit to the working capital or financial position
of the Company as a result of the Transaction, as well as other
statements containing the words "believes", "anticipates", "plans",
"intends", "will", "should", "expects", "continue", "estimate",
"forecasts" and other similar expressions. Readers are cautioned to
not place undue reliance on forward-looking information. Actual
results and developments may differ materially from those
contemplated by these statements. There is no guarantee the
Transaction will be completed as contemplated or at all, and the
forward-looking information contained herein is based on the
assumptions of management of the Company as of the date hereof
including, without limitation, assumptions with respect to the
financial position and working capital of the Company, the ability
of the Company to obtain TSXV approval for the Transaction (if
applicable) and the satisfaction of any other conditions thereto,
and the conditions of the financial markets and the e-commerce
markets generally, among others. The Company undertakes no
obligation to comment on analyses, expectations or statements made
by third parties in respect of the Company, its securities, or
financial or operating results (as applicable). Although the
Company believes that the expectations reflected in forward-looking
information in this press release are reasonable, such
forward-looking information has been based on expectations, factors
and assumptions concerning future events which may prove to be
inaccurate and are subject to numerous risks and uncertainties,
certain of which are beyond the Company's control, including risks
related to the disposition of an operating business by the Company,
risks that the benefits derived from the Transaction may not be as
expected or that the Company may not see any benefit from the
Transaction, risks that each party to the Agreement may not satisfy
its obligations or covenants, risks that the Company may be subject
to litigation as a result of the Transaction including allegations
of misrepresentation or breach of conditions or covenants, risks
that the TSXV or the Company's lender may not approve the
Transaction, as well as the risk factors discussed in the Company's
MD&A, and most recent Annual Information Form which are
available through SEDAR at www.sedar.com. The forward-looking
information contained in this press release are expressly qualified
by this cautionary statement and are made as of the date hereof.
The Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise.
On Behalf of the Board
Ghassan Halazon
Director, President, and CEO
SOURCE EMERGE Commerce Ltd.