Expands WeCommerce’s Leading Portfolio of
Themes
Adds Another Strong Growth and Attractive
Margin Business to WeCommerce’s Portfolio
WeCommerce Holdings Ltd. (“WeCommerce” or the
“Company”) (TSXV:WE) has signed a definitive purchase
agreement to acquire substantially all of the assets of Archetype
Themes Inc. (“Archetype”) for US$20 million upfront and
contingent consideration of up to US$12 million, the Company
announced today. Archetype is a leading designer and developer of
premium themes used by over 60,000 Shopify merchants. Its Impulse
theme is the #1 ranked theme based on popularity in the Shopify
Theme Store.
Archetype will continue to operate as an independent brand
post-acquisition. Combined with Pixel Union and Out of the Sandbox,
WeCommerce-owned themes will comprise five of the top-seven most
popular paid themes in the Shopify Theme Store. This acquisition
advances WeCommerce’s strategy to build, acquire and invest in the
world’s top Shopify technology businesses.
The upfront consideration represents a multiple of approximately
five times EBITDA, based on Archetype’s unaudited financial
statements for the trailing twelve months period ended March 31,
2021. WeCommerce expects to fund the upfront consideration through
a combination of cash on hand and borrowings under its senior
secured credit facility.
“Archetype’s stunning themes portfolio is loved by merchants
large and small, helping them attract and convert customers through
high performing and thoughtfully designed premium storefronts.”
said Chris Sparling, CEO of WeCommerce.
“Archetype has built a top brand in the Shopify partner
ecosystem,” Alex Persson, President and Interim Chief Financial
Officer added. “In the coming days, all of Archetype’s themes will
be updated for Shopify’s Online Store 2.0 architecture, which we
believe will unlock further flexibility and value for
merchants.”
“We are thrilled to be part of WeCommerce," said Carson Shold,
Co-founder and CTO of Archetype. "WeCommerce has a proven track
record of building and growing companies in the Shopify space.
WeCommerce’s experience and shared long-term vision of the partner
ecosystem made them the clear choice.”
Acquisition Overview
Pursuant to the purchase agreement, WeCommerce has agreed to pay
Archetype an aggregate purchase price of up to US$32 million,
comprising:
- US$20 million payable in cash on closing of the Acquisition;
and
- an earn-out of up to US$12 million, payable in two installments
as follows:
- an amount of up to US$4 million, subject to the satisfaction of
certain conditions, including Archetype achieving certain EBITDA
targets for the six-month period ending December 31, 2021, which
may be payable in or around the second quarter of 2022; and
- an amount of up to US$8 million, subject to the satisfaction of
certain conditions, including Archetype achieving certain EBITDA
targets for the twelve-month period ending December 31, 2022, which
may be payable in or around the second quarter of 2023.
The earn-out payment may be satisfied, at WeCommerce’s sole
discretion, in either cash, the issuance of Class A common shares
of WeCommerce (the “Common Shares”) to Archetype at the
10-day volume weighted average trading price of the Common Shares
calculated on the day immediately prior to the day of the issuance
of such shares, or a combination thereof.
The Acquisition is an arm’s length transaction that is expected
to constitute an “expedited acquisition” pursuant to Policy 5.3 of
the TSX Venture Exchange and is subject to customary closing
conditions, including TSXV approval, 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.
About WeCommerce Holdings Ltd.
WeCommerce provides merchants with a suite of ecommerce software
tools to start and grow their online store. Our family of companies
and brands include Pixel Union, Out of the Sandbox, Yopify,
SuppleApps, Rehash, Foursixty and Stamped. As one of Shopify’s
first partners since 2010, WeCommerce is focused on building,
acquiring and investing in leading technology businesses operating
in the Shopify partner ecosystem.
For more about WeCommerce, please visit
https://www.wecommerce.co/ or refer to the public disclosure
documents available under WeCommerce’s SEDAR profile at
www.sedar.com.
Cautionary Note Regarding Forward-Looking Information
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 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 Acquisition will be consummated;
the anticipated benefits of the Acquisition; the Company’s revenue
and cash flow upon completion of the Acquisition, the anticipated
timing for closing of the Acquisition; the Company's belief that
the Acquisition will provide significant value to shareholders; the
Company obtaining and/or satisfying customary approvals and
conditions, including TSXV approval for an expedited acquisition;
and expectations for other economic, business, and/or competitive
factors.
Investors are cautioned that forward-looking statements are not
based on historical facts but instead reflect the Company’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 believes 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. 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
Acquisition; the ability to receive, in a timely manner and on
satisfactory terms, all necessary third party approvals; the
ability of the parties to satisfy, in a timely manner, all other
conditions to the closing of the Acquisition; the potential impact
of the announcement or consummation of the Acquisition on
relationships, including with regulatory bodies, stock exchanges,
lenders, employees and competitors; the diversion of management
time on the Acquisition; assumptions concerning the Acquisition and
the operations and capital expenditure plans of the Company
following completion of the Acquisition; 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 and
the impact of the novel coronavirus pandemic; 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 in the Company's (final) short form prospectus
dated July 2, 2021 prepared in connection with the offering of
certain Common Shares, which has been filed with the Canadian
securities regulators and is available on the Company's profile on
SEDAR at www.sedar.com
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 has 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 does 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.
Non-IFRS Measures
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 of our and Archetype’s results of operations from
management’s perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of our
financial information reported under IFRS. We use non-IFRS measures
including EBITDA. We define EBITDA as net income or loss before
interest, income taxes and amortization. Management uses these
non-IFRS measures in order to, among other things, facilitate
operating performance comparisons from period to period and to
prepare annual operating budgets and forecasts.
We are presenting these measures because we believe that our
current and potential investors, and many analysts, use them to
assess our current and future operating results and to make
investments decisions. Management uses these measures in managing
the business and making decisions. The non-IFRS measures used in
this press release are not intended as a substitute for IFRS
measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210806005134/en/
Alex Persson, President and Interim Chief Financial Officer
alex@wecommerce.co 917-364-7085
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