- EMERGE has completed the sale of 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 retains 5 brands across 3
main verticals (Pets, Grocery, and Golf) in Canada and the U.S.,
namely WholesalePet, truLOCAL, Carnivore Club, UnderPar,
and JustGolfStuff
TORONTO, Aug. 10,
2023 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM)
("EMERGE", or the "Company"), a diversified acquirer
and operator of niche e-commerce brands, announces that, further to
its news release dated July 24, 2023,
EMERGE has completed the sale of WagJag and BeRightBack to 15124174
Canada Inc., a wholly owned subsidiary of BrandFX (the
"Buyer").
Pursuant to the sale of WagJag and BeRightBack (the
"Transaction"), EMERGE received cash consideration of
$1,000,000 on closing of the
Transaction, subject to certain closing adjustments.
EMERGE originally acquired the business for $500,000 from Torstar Corp in 2017.
EMERGE expects further HQ cost reductions in association with
the sale of WagJag, given the reduced overheads required to service
the go-forward brand portfolio.
"Having now streamlined our HQ team to oversee our 3 core
verticals, we expect to be able to drive significant savings which
we plan to reflect in our future results. We have amassed a
valuable e-commerce brand portfolio, including multiple profitable
businesses that deserve more attention, and we believe the
profitable sale of WagJag will facilitate that added focus towards
our largest, most compelling opportunities," commented Ghassan
Halazon, Founder and CEO of EMERGE.
Following the Transaction, EMERGE retains 5 brands across 3 main
verticals (Pets, Grocery, and Golf) in Canada and the U.S.,
namely WholesalePet, truLOCAL,
Carnivore Club, UnderPar,
and JustGolfStuff.
"The WagJag case study is now complete. In November 2017,
we acquired a declining, loss-making business from Torstar Corp.,
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 and the EMERGE
playbook. With our shifting priorities, we felt it was the right
time to sell WagJag at a healthy premium to our original purchase
price. 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," commented Halazon.
"This is a pivotal time for brands & retailers to connect
with consumers in new digital ways as they redevelop their habits.
The pandemic catalyzed the evolution to digital behavior, but the
reality remains that the majority of commerce is still conducted
offline. We have teamed up by merging WagJag's impressive standing
and influence in Canada's
alternative marketing landscape with BrandFX's customer engagement
platforms, deep profiling and data-driven insights to create an
unmatched force on a national scale," commented Gary Kalk and Omar
Sahyoun, co-founders at 15124174 Canada Inc., a wholly owned
subsidiary of BrandFX.
No finder's fees were paid in connection with the Transaction.
The Transaction is an Exempt Transaction as defined under the
policies of the TSX Venture Exchange.
The Company entered into an amendment agreement to the Company's
amended and restated credit agreement dated October 27, 2022, with its existing lender (the
"ARCA") pursuant to which, inter alia, the Company repaid the
lender $400,000 from proceeds of the
Transaction. The Company remains in good standing with its existing
lender, which it has worked with since November 2019.
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/
About 15124174 Canada
Inc. (wholly owned subsidiary of BrandFX):
BrandFX is a permanent holding company powered by a coalition of
business units to incubate, catalyze or invest in scalable
solutions. Combining its conversion acceleration platform which
deepens the 2-way relationship between brands and consumers
(www.GOcxm.com) and its interactive retail POS platform that turns
every cell phone into a shopping cart (www.Shopley.com), BrandFX
takes a unique approach in leveraging technology and
customer-centric innovation to build market share in "white spaces"
where traditional brands & retailers are not effectively
meeting today's customer needs.
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
including, without limitation, 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 result in cost savings
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, 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, 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.