Performance Marketing Specialist Signs
Definitive Agreement to Acquire Brand-First Digital Marketing Firm
SmarterChaos and Female-Centric Performance Ad Network She Is
Media
- DMS Raises Guidance for Fiscal 2021, Increasing Revenue from
$425 Million to $435 Million and EBITDA from $75 Million to $78
Million
- With this Acquisition, the Total Enterprise Value of the
Business Combination of $757 Million Now Represents a Multiple of
9.7x Fiscal Year 2021 Expected Adjusted EBITDA
- DMS Leverages Proven M&A Playbook Developed Over Nine
Successful Deals to Predictably Estimate Growth Impact of
Acquisition
- Previously Announced Transaction Will Introduce DMS as a
Publicly Listed Company to Trade on the NYSE
- Leo Holdings and DMS Merger Vote Date Scheduled for July 14th,
with Closing Expected Shortly Thereafter
- As a Result of Revised Guidance, Increased Confidence, and
Strong Company Performance, DMS Sellers Agree to Reduce Minimum
Cash Condition for Leo Holdings Transaction
Leo Holdings Corp. (NYSE: LHC), a Cayman Islands exempted
Special Purpose Acquisition Company (“Leo”), and Digital Media
Solutions LLC (“DMS”), a leading provider of technology and digital
performance marketing solutions leveraging innovative,
performance-driven brand and marketplace solutions to connect
consumers and advertisers, announced today that DMS has entered
into a definitive agreement to acquire SmarterChaos, a premier
digital marketing and online performance management agency, along
with She Is Media, a female-centric performance ad network.
Recently listed among America’s Fastest Growing Companies by
Financial Times, SmarterChaos is a brand-first performance
marketing firm designed to drive awareness and customer acquisition
for brands, including Pepsi, Shipt and Casetify, among others.
Offering complementary brand-direct performance marketing
capabilities to the DMS suite, SmarterChaos provides an existing
roster of name-brand advertiser clients and an extensive network of
website publishing partners – instantly expanding the audience
profile and media reach of DMS and its own advertiser clients.
Similarly, brands engaged with SmarterChaos will benefit from DMS’
mature, powerful customer acquisition platform to further maximize
campaign performance.
As part of the same transaction, DMS will also take ownership of
She Is Media, a female-centric performance ad network with a
mission to connect innovative, influential women bloggers and
influencers with brands. With its robust and expansive media
partnerships, the She Is Media business is complementary and
accretive to the DMS brand-direct performance business. The
transaction is expected to close shortly after the closing of DMS'
and Leo's previously announced business combination transaction,
subject to the satisfaction of customary closing conditions.
Matt Frary, the CEO and Founder of SmarterChaos and She Is
Media, will be joining DMS as EVP of Brand Strategy, along with
other key SmarterChaos and She Is Media employees, to ensure strong
business continuity and a smooth integration with DMS.
While the acquisition of SmarterChaos and She Is Media (the
“SmarterChaos Acquisition”) is not deemed material to the fiscal
year 2020 DMS financial outlook, DMS anticipates a swift
contribution to growth as a result of synergies once the
transaction is closed and both teams and capabilities of the
collective companies are fully integrated. As a result, DMS is
increasing its previously provided financial outlook for fiscal
year 2021. For fiscal year 2021, DMS now expects revenue of $435
million and EBITDA of $78 million. This compares to previous fiscal
year 2021 expectation of $425 million in revenue and $75 million in
EBITDA. As a result, the total enterprise value of the Business
Combination of $757 million represents a multiple of 9.7x fiscal
year 2021 expected adjusted EBITDA compared to prior 10.1x.
DMS financial outlook is as follows:
Revenue EBITDA
Fiscal 2020
$340 million $57 million
Fiscal 2021
$435 million $78 million
“In successfully executing nine acquisitions since 2016, DMS has
consistently seen additive value to the bottom line with our proven
M&A playbook. This has helped to both improve our level of
performance for our advertiser customers as well as create new
revenue opportunities by expanding our reach into new brand
relationships, penetrating new channels for growing net new logos,
and strengthening our highly diversified vertical customer base”
said Joe Marinucci, CEO of DMS. “We are confident that the
additions of SmarterChaos and She Is Media will contribute to both
organic and inorganic growth for DMS in 2021, and we will continue
to assess acquisition targets as an important part of our long term
growth strategy.”
In light of the revised guidance, increased confidence, and
strong company performance, the DMS sellers have agreed to reduce
the minimum cash proceeds required at closing of the Business
Combination from $200 million to $100 million. The parties expect
that the previously announced $100 million private placement, which
is expected to close concurrent with closing of the Business
Combination, will be sufficient to satisfy the minimum cash
proceeds condition.
SPAC Transaction Overview
As previously announced, Leo and DMS entered into the Business
Combination Agreement on April 23, 2020. Leo has scheduled a
special meeting to approve the transactions contemplated by the
Business Combination Agreement (the “Business Combination”) for
July 14, 2020, as described in its definitive proxy
statement/prospectus, dated June 24, 2020. The parties expect to
close the Business Combination on or about July 15, 2020.
The total enterprise value of the Business Combination of $757
million represents a multiple of 9.7x fiscal year 2021 expected
adjusted EBITDA. Leo believes the valuation at consummation of the
transaction represents a meaningful discount to relevant public
comparable multiples. Additionally, Leo has secured $100 million in
commitments from a number of institutional investors to purchase
common equity in the post-combination company at $10.00 per share
in support of the Business Combination. Once the Business
Combination closes, DMS is expected to trade on the NYSE under
ticker “DMS”.
The management team owns 54% of DMS with private equity funds
managed by Clairvest Group, Inc. (TSX: CVG) owning the remaining
46%. The sellers are expected to retain a significant continuing
equity interest in the post-business combination company
representing over 40% of the economic interest in the company on a
combined basis.
Completion of the Business Combination remains subject to
satisfaction of other closing conditions included in the Business
Combination Agreement and approval of the transaction by Leo’s
shareholders. Accordingly, there can be no assurance that the
Business Combination will be consummated.
About Digital Media Solutions LLC
Digital Media Solutions, LLC (DMS) is a leading provider of
technology and digital performance marketing solutions leveraging
innovative, performance-driven brand direct and marketplace
solutions to connect consumers and advertisers. DMS deploys a
robust database of consumer intelligence and leverages substantial
proprietary media distribution to provide customer acquisition
campaigns that grow businesses. Continuing to experience explosive
year-over-year growth, DMS has been continuously recognized on the
Inc. 5000 list, securing its sixth consecutive ranking in 2019, and
the Entrepreneur magazine 360 list. Named one of America’s “Best
Places to Work” by Inc. magazine and awarded the Excellence in Lead
Generation Award by the LeadsCouncil, DMS brings together some of
the industry’s most knowledgeable people, efficient processes and
sophisticated technology across the digital marketing spectrum.
About Leo Holdings Corp.
Leo is a blank check company formed for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more
businesses.
Important Information About the Business Combination and Where
to Find It
In connection with the Business Combination, Leo has filed with
the U.S. Securities and Exchange Commission’s (“SEC”) a final
prospectus and definitive proxy statement and has mailed the
definitive proxy statement/prospectus and other relevant documents
to its shareholders. This press release is not a substitute for the
definitive proxy statement/prospectus or any other document that
Leo will send to its shareholders in connection with the Business
Combination. Investors and security holders of Leo are advised to
read the definitive proxy statement/prospectus in connection with
Leo’s solicitation of proxies for its extraordinary general meeting
of shareholders to be held to approve the Business Combination (and
related matters) because the definitive proxy statement/prospectus
contains important information about the Business Combination and
the parties to the Business Combination. Shareholders are also be
able to obtain copies of the definitive proxy statement/prospectus,
without charge, at the SEC’s website at www.sec.gov or by directing
a request to: Leo Holdings Corp., 21 Grosvenor Place, London SW1X
7HF, United Kingdom.
Participants in the Solicitation
Leo and its directors, executive officers, other members of
management, and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Leo’s shareholders
in connection with the Business Combination. Investors and security
holders may obtain more detailed information regarding the names
and interests in the Business Combination of Leo’s directors and
officers in Leo’s filings with the SEC, including Leo’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2019,
which was filed with the SEC on March 13, 2020, as well as the
definitive proxy statement of Leo for the Business Combination.
Shareholders can obtain copies of Leo’s filings with the SEC,
without charge, at the SEC’s website at www.sec.gov.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Leo’s and DMS’ actual
results may differ from their expectations, estimates and
projections and consequently, you should not rely on these forward
looking statements as predictions of future events. Words such as
“expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, DMS’ expectations with respect to the future
performance of SmarterChaos and She Is Media following consummation
of the SmarterChaos Acquisition, Leo’s and DMS’ expectations with
respect to future performance and anticipated financial impacts of
the proposed Business Combination, the satisfaction of the closing
conditions to the SmarterChaos Acquisition and the Business
Combination and the anticipated timing of the completion of the
SmarterChaos Acquisition and the Business Combination. These
forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Leo’s and DMS’ control and are difficult to predict.
Factors that may cause such differences include, but are not
limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
SmarterChaos Acquisition or cause the SmarterChaos Acquisition to
fail to close; (2) the outcome of any legal proceedings that may be
instituted against Leo and DMS following the announcement of the
Business Combination Agreement and the transactions contemplated
therein; (3) the inability to complete the proposed Business
Combination, including due to failure to obtain approval of the
shareholders of Leo or other conditions to closing in the Business
Combination Agreement; (4) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
Business Combination Agreement or could otherwise cause the
Business Combination to fail to close; (5) the amount of redemption
requests made by Leo’s shareholders; (6) the inability to obtain or
maintain the listing of the post-business combination company’s
common stock on the New York Stock Exchange following the proposed
Business Combination; (7) the risk that the proposed Business
Combination disrupts current plans and operations as a result of
the announcement and consummation of the proposed Business
Combination; (8) the ability to recognize the anticipated benefits
of the proposed SmarterChaos Acquisition or the Business
Combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably and retain its key employees; (9) costs related
to the proposed SmarterChaos Acquisition or Business Combination;
(10) changes in applicable laws or regulations; (11) the
possibility that DMS or the combined company may be adversely
affected by other economic, business, and/or competitive factors;
and (12) other risks and uncertainties indicated from time to time
in the proxy statement relating to the proposed Business
Combination, including those under “Risk Factors” in the
Registration Statement, and in Leo’s other filings with the SEC.
Some of these risks and uncertainties may in the future be
amplified by the COVID-19 outbreak and there may be additional
risks that we consider immaterial or which are unknown. It is not
possible to predict or identify all such risks. Leo cautions that
the foregoing list of factors is not exclusive. Leo cautions
readers not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. Leo does not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is
based.
No Offer or Solicitation
This press release is for informational purposes only and is
neither an offer to purchase, nor a solicitation of an offer to
sell, subscribe for or buy any securities or the solicitation of
any vote in any jurisdiction pursuant to the Business Combination
or otherwise, nor shall there be any sale, issuance or transfer or
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and otherwise in accordance with
applicable law.
Non-GAAP Financial Measure and Related Information
This press release references EBITDA and Adjusted EBITDA, which
are financial measures that are not prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”). These
non-GAAP financial measures do not have a standardized meaning, and
the definition of EBITDA or Adjusted EBITDA used by DMS may be
different from other, similarly named non-GAAP measures used by
others operating in DMS’ industry. In addition, such financial
information is unaudited and/or does not conform to SEC Regulation
S-X and as a result such information may be presented differently
in future filings by the post-business combination company with the
SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200702005115/en/
Investors Sherif Guirgis
(310) 483-8958 guirgis@lioncapital.com
Edward Parker (646) 677-1864 Edward.parker@icrinc.com
Media Jack Murphy (646)
677-1834 Jack.murphy@icrinc.com
Leo Holdings Corp II (NYSE:LHC)
Historical Stock Chart
From Apr 2024 to May 2024
Leo Holdings Corp II (NYSE:LHC)
Historical Stock Chart
From May 2023 to May 2024