"EMERGE is at the forefront of the rapid rise of e-commerce and has proven to be a disciplined operator with a prudent capital allocation strategy. I am excited to contribute my knowledge to drive the team's acquisition efforts forward in this next phase of growth," said
EMERGE would also like to provide the following updates:
truLOCAL Acquisition
EMERGE acquired truLOCAL Inc. ("truLOCAL"), the market leader in direct-to-consumer, premium meat subscriptions, on
- Profitable: truLOCAL generated positive EBITDA1 in calendar 2020. truLOCAL must meet a minimum threshold of
$1.7 million EBITDA in Year 1, and$2.5 million EBITDA in Year 2, respectively, in order for former shareholders of truLOCAL to be paid earn-out consideration. - Revenue Growth: Over a 4-year period2, truLOCAL grew revenues (unaudited) from
$1.4 million (2018) to$4.8 million (2019) to$8.9 million (2020), to$19.8 million in calendar 2020. - Subscription Model: truLOCAL revenue is generated from monthly recurring subscription (membership) for the delivery of locally sourced, premium meats.
- Market Expansion: truLOCAL currently has offices and facilities in
Ontario ,British Columbia ,Alberta , andIllinois . The business is preparing to roll-out additional markets starting in Q1 2021.
"truLOCAL was able to scale its operations with approximately
truLOCAL experienced a significant increase in subscribers and revenues that has been sustained throughout the pandemic, as Canadian consumers continue to shop online for groceries, among other categories, in record numbers.
Acquisition Pipeline Update
To date, EMERGE has completed five e-commerce acquisitions in
- EMERGE anticipates completing two to three acquisitions over the next 12-18 months.
- EMERGE is rapidly expanding its acquisition pipeline, currently at over 40 target e-commerce companies ranging from early due diligence to signed letters of intent.
- Typical target acquisition profile:
- Leading e-commerce player in a desirable online niche
- Revenue of
$5 million to$50 million - EBITDA of
$1 million to$5 million - Multi-year track record of revenue growth and profitability
North America focused
"Shopify (TSX: SHOP) and similar technology platforms have created a robust ecosystem that powers thousands of profitable, growing niche e-commerce brands. Under the EMERGE umbrella, we believe these small-to-medium e-commerce businesses are stronger together. It is our ambition to become
1 EBITDA is a non-GAAP measure and should not be construed as alternatives to net income/loss determined in accordance with IFRS. Earnings before interest, taxes, depreciation and amortization ("EBITDA") does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.
2 2018-2020 figures based on February fiscal year for truLOCAL (unaudited) except where stated.
About EMERGE:
EMERGE is a disciplined, diversified, rapidly growing acquirer and operator of niche e-commerce brands across
To learn more, visit www.emerge-commerce.com.
Cautionary notice
Investors are cautioned that any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
Neither
Notice regarding forward-looking statements
This press release may contain 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 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. 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 the risk factors discussed in the Company's filing statement which are incorporated herein by reference and 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.
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