WeCommerce Holdings Ltd. (TSX-V: WE) (“WeCommerce” or the
“Company”) announced today the successful closing of the
previously-announced acquisition of substantially all of the assets
of Stamped.io Pte. Ltd. (“Stamped”) for up to US$110 million
(collectively, the “Acquisition”).
Stamped offers a leading suite of software which enables Shopify
merchants to collect and feature customer reviews and product
ratings, and to create their own loyalty and rewards programs,
which facilitate customer conversion and retention. Despite
Stamped’s leadership position, the Company believes there are
substantial opportunities to optimize Stamped’s business by
accelerating customer acquisition and deploying WeCommerce’s best
practices.
The Acquisition is expected to be accretive to WeCommerce’s
consolidated revenues, organic revenue growth, and operating
margins while substantially increasing the proportion of the
Company’s revenues that is generated from recurring subscription
revenue streams. We expect to file audited financial statements of
Stamped shortly after closing. As previously announced, we plan to
host an investor presentation and Q&A session shortly after
that additional information becomes available.
“We are thrilled to officially welcome Stamped to the WeCommerce
family,” said Chris Sparling, CEO of WeCommerce. “We are extremely
excited about Stamped’s growth potential in the years ahead.”
“WeCommerce is the perfect partner to help grow Stamped into a
leading provider of customer engagement solutions for online
merchants globally.” said Tommy Ong, Founder of Stamped.
Acquisition Overview
On closing of the Acquisition, WeCommerce paid Stamped upfront
consideration of (i) US$75 million in cash; and (ii) US$10 million
through the issuance of 496,697 Class A common shares of WeCommerce
(the “Common Shares”) at a price of C$25.43. The upfront
cash portion of the consideration was funded with approximately
US$35 million of cash on hand and approximately US$40 million of
borrowings under the Company’s new senior secured credit facility
(the “Credit Facilities”) led by JPMorgan Chase Bank, N.A.
Toronto Branch (“JPMorgan Chase”). Further details on the
Credit Facilities are provided below.
In addition to the upfront consideration of US$85 million,
WeCommerce may be required to pay Stamped a further US$25 million
(the “Contingent Consideration”) in the first quarter of
2022 if, among other things, Stamped achieves a minimum revenue
target in 2021 of US$10 million. If payable, the Contingent
Consideration will be satisfied, at WeCommerce’s sole discretion,
in either cash, the issuance of Common Shares to Stamped, or a
combination thereof.
Credit Facilities
Immediately prior to the closing of the Acquisition, WeCommerce
entered into a credit agreement (the “Credit Agreement”)
with a syndicate of lenders led by JPMorgan Chase. The Credit
Facilities comprise: (i) a senior revolving credit facility in an
aggregate principal amount of US$20 million, (ii) a senior term
loan facility in an aggregate principal amount of US$40 million;
and (iii) a senior delayed draw term loan facility in an aggregate
principal amount of US$20 million.
All obligations of WeCommerce under the Credit Facilities are
guaranteed by its material wholly-owned subsidiaries (including its
subsidiary that acquired the assets of Stamped) (the
“Guarantors”), and secured by a security interest in the
assets of WeCommerce and the Guarantors and WeCommerce’s equity
interests in the Guarantors. The Credit Agreement contains certain
customary financial and non-financial covenants. The Credit
Facilities will mature on April 6, 2026, being the fifth
anniversary of the date of the Credit Agreement.
In addition to financing the Acquisition, WeCommerce plans to
use the proceeds of the Credit Facilities: (i) to finance the
working capital needs and for general corporate purposes of the
Company and its subsidiaries in the ordinary course of business;
and (ii) to finance future acquisitions.
Prior to borrowing under the Credit Facilities, WeCommerce used
cash on hand to fully repay the existing indebtedness of one of its
subsidiaries, Pixel Union Design Ltd. in the amount of
approximately C$11.4 million.
About WeCommerce Holdings Ltd.
WeCommerce is a Canadian ecommerce technology holding company
that owns a family of companies and brands in the Shopify partner
ecosystem, including, Pixel Union, Out of the Sandbox, Yopify,
SuppleApps, Rehash and Foursixty. The Company’s primary focus is to
build, grow and acquire businesses that serve the Shopify Partner
ecosystem. These businesses consist largely of SaaS, Digital Goods
and Services businesses. Generally, these businesses build Apps and
Themes and run Agencies that support Shopify merchants.
WeCommerce is focused on acquiring businesses with growth
potential, a sustainable competitive advantage and that are, or
have the potential to become, a leader within their particular
market. The Company targets businesses within the Shopify ecosystem
due to its confidence in the Shopify platform, the fragmented
nature of the ecosystem and the attractive economics that the
businesses generally exhibit. As one of Shopify’s first partners
since 2010, WeCommerce believes it is well positioned to continue
to identify acquisition opportunities in the Shopify Partner
ecosystem.
For more about WeCommerce, please visit
https://www.wecommerce.co/ or refer to the public disclosure
documents available under WeCommerce’s SEDAR profile on SEDAR at
www.sedar.com.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which constitute
“forward-looking statements” and “forward-looking information”
within the meaning of applicable securities laws (collectively,
“forward-looking statements”), including statements
regarding the plans, intentions, beliefs and current expectations
of the Company with respect to future business activities and
operating performance. Forward-looking statements are often
identified by the words “may”, “would”, “could”, “should”, “will”,
“intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or
similar expressions and forward-looking statements in this news
release includes, but is not limited to, information and statements
regarding: the anticipated benefits of the Acquisition; the
Company’s revenue and cash flow upon completion of the Acquisition,
including the Company’s expectation that a majority of its revenue
will be recurring subscription revenue; the Company's belief that
the Acquisition will provide significant value to shareholders; and
expectations for other economic, business, and/or competitive
factors.
Investors are cautioned that forward-looking statements are not
based on historical facts but instead reflect the Company’s
expectations, estimates or projections concerning future results or
events based on the opinions, assumptions and estimates of
management considered reasonable at the date the statements are
made. Although the Company believes that the expectations reflected
in such forward-looking statements are reasonable, such statements
involve risks and uncertainties, and undue reliance should not be
placed thereon, as unknown or unpredictable factors could have
material adverse effects on future results, performance or
achievements of the Company. Financial outlooks, as with
forward-looking information generally, are, without limitation,
based on the assumptions and subject to various risks as set out
herein.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are the following: the potential impact of the consummation of the
Acquisition on relationships, including with regulatory bodies,
stock exchanges, lenders, employees and competitors; the diversion
of management time on the Acquisition; assumptions concerning the
Acquisition and the operations and capital expenditure plans of the
Company following completion of the Acquisition; credit, liquidity
and additional financing risks for the Company and its investees;
stock market volatility; changes in e-commerce industry growth and
trends; changes in the business activities, focus and plans of the
Company and its investees and the timing associated therewith; the
Company's actual financial results and ability to manage its cash
resources; changes in general economic, business and political
conditions, including challenging global financial conditions and
the impact of the novel coronavirus pandemic; competition risks;
potential conflicts of interest; changes in applicable laws and
regulations both locally and in foreign jurisdictions; compliance
with extensive government regulation; the risks and uncertainties
associated with foreign markets; and the other risk factors more
fully described in the Company's filing statement dated November
30, 2020 prepared in connection with its qualifying transaction,
which has been filed with the Canadian securities regulators and is
available on the Company's profile on SEDAR at www.sedar.com
Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking statements
prove incorrect, actual results may vary materially from those
described herein as intended, planned, anticipated, believed,
estimated or expected. Although the Company has attempted to
identify important risks, uncertainties and factors which could
cause actual results to differ materially, there may be others that
cause results not to be as anticipated, estimated or intended and
such changes could be material. The Company does not intend, and do
not assume any obligation, to update the forward-looking statements
except as otherwise required by applicable law.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210406006196/en/
Evan Brown, Chief Financial Officer evan@wecommerce.co
250-888-9424
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