Adds a leading provider of reviews, ratings, loyalty and rewards programs for merchants in the Shopify partner ecosystem and offers an attractive platform for growth
Aligns with WeCommerce’s strategy to start, buy and invest in businesses in the Shopify partner ecosystem
Majority of the combined business’ revenue expected to be recurring subscription revenue
US$85 million upfront consideration, comprising US$75 million in cash and US$10 million in common shares of WeCommerce
Upfront cash consideration to be funded from cash on hand and a new senior secured credit facility with a syndicate of lenders led by JPMorgan Chase Bank, N.A.
WeCommerce Holdings Ltd. (“WeCommerce” or the “Company”) is pleased to announce that it has signed a definitive purchase agreement (the “Purchase Agreement”) to acquire substantially all of the assets of Stamped.io Pte. Ltd. (“Stamped”) for up to US$110 million (collectively, the “Acquisition”). Stamped is a leading SaaS platform enabling online merchants to implement and manage customer reviews and loyalty programs through Shopify and other ecommerce platforms.
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“We could not be more excited to join WeCommerce”
Since its launch in 2016, Stamped has grown to approximately US$11 million annualized recurring subscription revenue1 as of the month ending December 31, 2020, reflecting an estimated growth rate of over 100% compared to the same period in 2019, with minimal spend on customer acquisition. Net revenue retention1 is estimated to be approximately 125% in the fourth quarter of 2020.
“Merchants turn to Stamped to build social trust and power customer engagement. Stamped’s strong growth is a testament to its product-first focus and customer obsession,” said Chris Sparling, CEO of WeCommerce. “We are thrilled to welcome Stamped into the WeCommerce family and are excited about its future growth potential.”
“We could not be more excited to join WeCommerce,” said Tommy Ong, Founder and CEO of Stamped. “WeCommerce’s management team brings over a decade of experience developing similar businesses, which is expected to help us accelerate growth. Amongst many suitors, we chose WeCommerce because of their founder friendly approach, straightforward deal structure, and focus on the long term”
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Pursuant to the Purchase Agreement, WeCommerce has agreed to pay Stamped an aggregate purchase price of up to US$110 million, comprising:
- US$75 million payable in cash on closing of the Acquisition;
- 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 on closing of the Acquisition, representing approximately 1.36% of the issued and outstanding Common Shares as of the date hereof (after giving effect to such issuance). The price of the Common Shares has been determined based on the 30-day volume-weighted average trading price of the Common Shares on the TSX Venture Exchange (“TSXV“) for the period ending on March 3, 2021; and
- US$25 million payable in the first quarter of 2022 contingent on, among other things, Stamped achieving a minimum revenue target in 2021 of US$10 million. 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.
The upfront cash consideration will be funded through a combination of cash on hand and a senior secured credit facility (the “Credit Facility”) with a syndicate of lenders led by JPMorgan Chase Bank, N.A. from which the Company has received aggregate financing commitments of US$77 million. Further details on the Credit Facility are provided below.
The Acquisition is subject to customary closing conditions, including the approval of the TSXV,2 receipt of certain third party consents and the other conditions set out in the Purchase Agreement. Subject to the satisfaction of such conditions, the Acquisition is expected to close within the next 45 days.
WeCommerce has obtained commitments from a syndicate of lenders led by JPMorgan Chase Bank, N.A. (collectively, the “Lenders”) to provide financing of up to an aggregate of US$77 million to partially finance the purchase price for the Acquisition. The Credit Facility is expected to consist of a revolving credit facility, a term loan facility and a delayed draw term loan facility.
In addition to financing the Acquisition, WeCommerce plans to use the proceeds of the Credit Facility to (i) finance the working capital needs and for general corporate purposes of the Company and its subsidiaries in the ordinary course of business; (ii) finance future acquisitions; and (iii) repay existing indebtedness.
The commitments of the Lenders are subject to the execution of mutually acceptable credit documentation giving effect to the terms provided in the commitment documents between the Company and the Lenders and the satisfaction of the other customary conditions to closing, including the satisfaction of all conditions to the completion of the Acquisition.
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