- The combination of Tiny and
WeCommerce creates a well-capitalized technology holding company managed by a leadership team with a strong track record of building and acquiring profitable companies, driving organic growth, and generating free cash flow for future acquisitions. - The proforma newly combined business of
WeCommerce and Tiny (which will retain the "Tiny" name) had approximate revenues of$149 million and adjusted EBITDA of$49.7 million for the period endingDecember 31, 2021 . Each of the combined businesses continued to experience growth in calendar 2022, which results will be published in the second quarter of 2023 after the completion of their audited financial statements. - The proforma newly combined business will have a strong balance sheet with unaudited cash and debt of approximately
$42 million and$130 million , respectively, atDecember 31, 2022 . - The transaction represents substantial value for
WeCommerce shareholders with an attributed value of$5.12 per share, representing a fully diluted equity value forWeCommerce of$220 million and for Tiny of$691 million , excluding Tiny's existing interest inWeCommerce shares. - The
$5.12 per share attributed value represents a proforma combined enterprise value for the two companies of$962 million , reflecting$911 million in total equity value, estimated proforma debt net of cash and investment assets of$51 million (cash of$42 million and investment assets of$37 million , reduced by debt of$130 million ) atDecember 31, 2022 , representing a 16.0 to 17.5 multiple of proforma estimated 2023 calendar year adjusted EBITDA of$55 million to$60 million .1 - The
$5.12 value attributed to the shares ofWeCommerce represents a 161% premium to Friday's closing price, and a 158% premium to the 30-day volume-weighted average trading price. - Pursuant to the transaction,
WeCommerce Holdings Ltd. ("WeCommerce ") will issue approximately 146.4 million shares to the former shareholders ofTiny Capital Ltd. ("Tiny") and its affiliates. CurrentWeCommerce shareholders (inclusive ofWeCommerce shares owned by Tiny and its affiliates) will own 24.1% of the post-combination company, which will have approximately 177.9 million fully diluted shares outstanding at closing. The combined company will remain listed on theTSX Venture Exchange . - Tiny co-founders
Andrew Wilkinson andChris Sparling will serve as co-CEOs of the newly merged company and will own 71% and 10%, respectively, of the combined company as a result of their current ownership of Tiny andWeCommerce shares.WeCommerce's current CFODavid Charron will continue as CFO, and Ampere Chan, Tiny's current CFO, will serve as President of the company. - Voting support agreements have been executed by key shareholders,
Table Holdings (Bill Ackman ) andFreemark Partners (Howard Marks ), who collectively own 35.9% of the minority (unaffiliated with Tiny)WeCommerce shares outstanding.
Tiny is a leading technology holding company founded by
"We have been building Tiny for over a decade and could not be more excited to go public through our merger with
"We are thrilled to merge
"I have always considered Andrew and Chris to be the Warren and Charlie of the technology investment world. They are outstanding operators and value investors, and I could not be more delighted that they have decided to go all-in and merge Tiny, which represents substantially all of their assets, with
Tiny, after the Transaction, will consist of three core operating segments and several standalone businesses:
- Beam: digital services group, with many fortune 500 clients; included in Beam is subsidiary MetaLab, which has helped some of the world's top companies design, build and ship digital products and services for over 15 years
- Dribbble: leading social network and marketplace for digital designers and creatives
WeCommerce : e-commerce software and services group- Standalone: several independent software and internet businesses including
Meteor Software and We Work Remotely.
In connection with the evaluation of the Transaction, the board of directors of the Company (the "WeCommerce Board") formed an independent special committee comprised of
In reaching its recommendation to the WeCommerce Board, the Special Committee relied, in part, upon an oral opinion of Perella Weinberg Partners that, as of
The Transaction is structured as a three-cornered amalgamation under the BCBCA whereby Tiny will amalgamate with
It is anticipated that, following completion of the Transaction, the combined company will continue as
The Transaction is subject to TSXV approval,
The Agreement contains customary representations and warranties of
The Transaction is considered a "related party transaction" for the purposes MI 61-101. As a result, the Transaction will be subject to minority shareholder approval under MI 61-101 and the policies of the TSXV, excluding the votes required to be excluded under MI 61-101, including those of Messrs. Wilkinson and Sparling, Tiny and its affiliated entities and Wilkinson Ventures Ltd.
Disinterested directors and certain executive officers of
Details of the Transaction will be included in a management information circular that
For more about
Tiny is a privately-held leading technology holding company with a strategy of acquiring majority stakes in wonderful businesses. Tiny has two core business segments, Beam and Dribbble, with other standalone businesses including a private equity investment fund.
Beam, and its subsidiary companies including MetaLab, helps start-ups to Fortune 500 companies to design, build and ship premium digital products for both mobile and web. Tiny's capabilities as an end-to-end product partner provide clients with intimate insight into end-user behavior, allowing for a thorough, strategy-led approach to product design, engineering, brand positioning and marketing.
Dribbble is a creative network and community that design professionals use to meet, collaborate, and showcase their work. Dribbble also hosts an online marketplace for graphics, fonts, templates, and other digital assets.
Other standalone businesses include several software and internet companies and the operation of a private equity fund where Tiny serves as the general partner (the "
For more about Tiny, please visit www.tiny.com.
Tiny Selected Financial Information | ||
Revenue | $ 83,904,014 | $ 110,847,038 |
Net Income | 21,387,877 | 36,601,486 |
Income tax expense | 6,282,599 | 9,978,770 |
Depreciation and amortization | 2,848,713 | 3,300,487 |
Interest and bank charges | 919,665 | 443,716 |
EBITDA | $ 31,438,854 | $ 50,324,459 |
EBITDA Adjustments | ||
Gain on sale of subsidiary | - | (13,027,764) |
Share of loss from associates | 1,137,115 | 248,005 |
Other income | (1,670,427) | (426,568) |
Unrealized fair value gain on investments | (1,350,125) | (1,031,307) |
Business acquisition costs | 347,508 | - |
Non-recurring management and strategic | 1,307,337 | 1,420,694 |
Share based payments | 2,857,151 | (120,520) |
Non-recurring employee expense | - | 751,965 |
Tiny Adjusted EBITDA | $ 34,067,413 | $ 38,138,964 |
WeCommerce Selected Financial Information | ||
Revenue | $ 21,281,499 | $ 38,581,377 |
Net loss | (4,416,476) | (842,922) |
Income tax expense | 423,854 | 298,022 |
Depreciation and amortization | 3,184,607 | 10,087,571 |
Finance costs | 825,917 | 3,051,855 |
EBITDA | $ 17,902 | $ 12,594,526 |
EBITDA Adjustments | ||
Stock-based compensation | 4,169,265 | 1,890,466 |
Foreign exchange (gain)/loss | 146,254 | 1,010,460 |
Acquisition costs | 170,659 | 1,461,844 |
Listing expense | 1,634,081 | - |
Fair value adjustments of contingent | - | (5,302,617) |
Non-recurring professional fees | 73,588 | 91,560 |
Severance costs | 128,309 | 26,767 |
(Gain) on sale of themes | - | (355,513) |
Loss on disposal of assets | - | 168,544 |
WeCommerce Adjusted EBITDA | $ 6,340,058 | $ 11,586,037 |
Combined Revenue | $ 105,185,513 | $ 149,428,415 |
Combined Adjusted EBITDA | $ 40,407,471 | $ 49,725,001 |
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding to shareholders and investors of our performance and may assist in the evaluation of the combined business relative to that of its peers. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. The non- IFRS measures including EBITDA and adjusted EBITDA. EBITDA has been defined herein as net income or loss before interest, income taxes and amortization. Adjusted EBITDA removes unusual, non-cash or non-operating items from EBITDA such as listing expenses, acquisition costs, restructuring charges, asset impairments, non-cash stock-based compensation, fair value adjustments to contingent consideration payable and foreign exchange gains and losses.
The non-IFRS measures used in this press release are not intended as a substitute for IFRS measures. For more information, please see "Non-IFRS Measures" and "Non-IFRS Measures Reconciliations" in the most recent management's discussion and analysis for the three- and nine-months ended
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the 2023 calendar year adjusted EBITDA which is subject to the same assumptions, risk factors, limitations, and qualifications as set out below under the heading "Forward-Looking Information". The actual financial results of the combined company may vary from the amounts set out herein and such variation may be material.
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 and Tiny 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 press release includes, but is not limited to, information and statements regarding: whether and when the Transaction will be consummated; the anticipated benefits of the Transaction, including continued growth, financial and operating scale, stronger balance sheet, business objectives and plans of the combined entity; the anticipated timing for closing of the Transaction; the pro forma ownership of the combined entity following the Transaction and the anticipated treatment of the restricted share units of Tiny; Tiny's operating segments and businesses following the Transaction; the terms and parties of the voting support agreements; the mailing and contents of the management information circular in respect of the special meeting of shareholders of
Investors are cautioned that forward-looking statements are not based on historical facts, but instead reflect the Company's and Tiny'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 and Tiny believe 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 and Tiny. 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 parties' ability to consummate the Transaction; the ability to receive, in a timely manner and on satisfactory terms, all necessary approvals, including TSXV approval, and requisite shareholder, regulatory and third party approvals; the ability of the parties to satisfy, in a timely manner, all other conditions to the closing of the Transaction; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, stock exchanges, lenders, service providers, employees and competitors; the diversion of management time on the Transaction; assumptions concerning the Transaction and the operations and capital expenditure plans of the combined entity following completion of the Transaction; 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, as a result of the COVID-19 pandemic or otherwise; 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 under the heading "Risk Factors" in the each of Company's most recent annual information form and management's discussion and analysis, each of which is available on
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 and Tiny have 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 and Tiny do 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.
______________________________ |
1 See "Non-IFRS Measures" and "Financial Outlook" below. |
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