Digital Media Solutions Holdings, LLC and Leo Holdings Corp. Announce Execution of Business Combination Agreement

Institutional Investors Have Committed $100 million Cash in Private Placement to Close Concurrently with Transaction

Digital Media Solutions Holdings, LLCand Leo Holdings Corp., a publicly traded special purpose acquisition company, announced today that Leo and DMS have entered into a definitive business combination agreement (the “Business Combination Agreement”).

DMS is a martech-enabled business capitalizing on the secular shift of advertising dollars from traditional offline channels to online digital channels by helping connect consumers and advertisers with innovative performance-driven brand and marketplace solutions. DMS deploys a robust database of consumer intelligence and leverages significant proprietary media distribution to a diverse set of advertisers across a variety of end markets including but not limited to insurance, education, health & wellness, consumer finance and home services.

Immediately following the closing of the proposed transaction (the “Business Combination”), Leo intends to change its name to Digital Media Solutions, Inc. (“New DMS”). The current DMS executive management team, led by co-founders Joe Marinucci and Fernando Borghese, will lead New DMS, which is expected to trade on the New York Stock Exchange. The Business Combination will introduce DMS to the equity capital markets as a publicly listed company with a total enterprise value of $757 million or 13.2x the Company’s fiscal year 2020 expected Adjusted EBITDA of $57 million and 10.0x the Company’s fiscal year 2021 expected Adjusted EBITDA of $75 million.

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The DMS management team currently owns 54% of the Company, with private equity funds managed by Clairvest Group, Inc.(“Clairvest”) owning the remaining 46%. The DMS management team and the Clairvest private equity funds are expected to retain a significant continuing equity interest in New DMS, representing over 40% of the New DMS economic interests and over 50% of the voting interests in New DMS, assuming no redemptions by Leo’s public shareholders. This percentage is subject to change depending on the number of Class A ordinary shares of Leo that are redeemed by Leo’s public shareholders in connection with the Business Combination.

DMS Company Highlights

DMS leverages proprietary technology solutions, significant proprietary media distribution and data-driven processes to help large brands acquire their customers. DMS helps clients de-risk marketing spend across digital channels through its pay-for-performance model, meaning the Company is paid to deliver customers rather than impressions. The Company delivers results using a diversified portfolio of owned and operated vertical marketplaces, which match consumers with relevant offers within each vertical (e.g., insurance), as well as full-funnel customer acquisition programs where DMS attracts and converts customers on a brand’s behalf. DMS has developed significant barriers to entry including its proprietary, privacy-compliant database of over 150 million consumer profiles built via over $1 billion  of ad spend on the DMS platform, and its white label software tools that embed DMS’ position inside marketing departments. The Company has consistently proven its ability to produce results for large brands, as evidenced by DMS’ 95% customer retention rate.

“We were quickly attracted to DMS’ combination of technology solutions, diversified blue-chip customer base and, most importantly, their high free cash flow conversion profile. While the current environment is presenting unique challenges to all companies, DMS is benefitting from marketers trying to reach growing audiences. DMS is well-positioned to take advantage of an ongoing, large-scale shift of marketing dollars to digital performance-based solutions,” said Lyndon Lea, Chairman and Chief Executive Officer of Leo.

Joe Marinucci, CEO of DMS, added: “Over the past decade, we have been a critical partner to large global brands in acquiring new customers and deploying marketing spend efficiently. We’ve built a diversified, sector-agnostic business model that counts Fortune 100 companies across the Insurance, Finance, Education, Health & Wellness and Home Services verticals as customers. We’re thrilled to achieve this exciting milestone together with Leo, and look forward to further accelerating our growth as a public company.”

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Addressing the macroeconomic volatility resulting from the COVID-19 crisis, Marinucci added, “Our highly diversified, martech-driven business model is proving resilient. In today’s environment, there is no greater decision that marketers face than the one on how to spend their dollars most efficiently. Our solutions are perfectly suited given they are 100% focused on return on investment with linear accountability to each dollar spent. Performance across our portfolio of verticals can be characterized in one of three ways:

• A significant portion of our revenue comes from verticals that are in the early stages of transition to digital and therefore continuing on an elevated growth trajectory like Insurance, Health & Wellness and Direct-to-Consumer products.

• Some verticals such as Education are counter-cyclical, with limited impact to client activity.

• Certain marketplace solutions have been impacted, particularly in Consumer Finance given the reduction in demand for credit card, lending and other personal banking services. Consumer Finance represented only approximately 11% of total revenue last year, and we are optimistic that banks will increase marketing spend as consumer demand returns following COVID-related disruption. We are nonetheless being disciplined on the cost side, and have multiple levers to align expenses with any changes in revenue.”

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