- Alliance Entertainment is a leading Direct-to-Consumer and
eCommerce provider to the Entertainment Industry. Alliance
Entertainment is the gateway between leading entertainment brands
and retailers offering over 485,000 unique in stock SKUs.
- Generated annualized revenue of $1.4 billion and Adjusted
EBITDA of $76 million as of March 31, 2022.
- Transaction is expected to enable further investment in growth
including automating facilities, upgrading proprietary software and
positions Alliance Entertainment to increase market share.
- Transaction also positions Alliance Entertainment to drive
inorganic growth through a roll-up strategy of acquiring and
integrating competitors and complementary businesses.
- Transaction represents attractive entry valuation based on 6.2x
TTM EBITDA for Alliance compared to similar businesses and
transactions.
- Combined company to have a proforma equity value of
approximately $480 million and expected to have an estimated $109
million in gross cash proceeds after closing.
- Chairman Bruce Ogilvie and CEO Jeff Walker will continue to
lead the combined company, with its current proven management
team.
- Transaction is expected to close in the fourth quarter, with
the combined company anticipated to be listed on the NYSE American
under the symbol “AENT”.
- A joint investor conference call to discuss the proposed
transaction will be conducted today, June 23, 2022, at 12:30 PM
Eastern time.
Adara Acquisition Corp. (“Adara”) (NYSE American: ADRA, ADRA.U,
ADRA.WS), a special purpose acquisition corporation, today
announced the signing of a definitive business combination
agreement with Alliance Entertainment Holding Corporation
(“Alliance Entertainment”), a distributor and wholesaler of the
world’s largest in stock selection of music, movies, video games,
electronics, arcades, and collectibles.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220623005383/en/
Upon closing the combined entity is expected to be listed on the
New York Stock Exchange American under the ticker symbols “AENT”
and “AENT.WS”. Bruce Ogilvie and Jeff Walker will continue to lead
the Company as Chairman and CEO, respectively.
Alliance Entertainment Highlights
With more than thirty-five years of distribution experience,
Alliance Entertainment serves customers of every size, providing a
robust suite of services to resellers and leading retailers
worldwide. The Company’s efficient processing and essential seller
tools noticeably reduce the costs associated with administrating
multiple vendor relationships, while helping omni-channel retailers
expand their product selection and fulfillment goals.
Alliance stocks over 485,000 unique entertainment products from
Microsoft, Nintendo, Activision, Electronic Arts, Sega, Funko,
Disney, Warner Home Video, Universal Video, Sony Pictures, Fox,
Lionsgate, Paramount, Warner Music, Sony Music, Universal Music,
Mattel, Lego, Hasbro, Arcade1Up, and over 500 additional
Entertainment product manufacturers.
Through the exclusive distribution divisions of AMPED,
Distribution Solutions, and Cokem, Alliance is the exclusive
distributor of over 57,300 unique Vinyl, CD, DVD, and Video Game
products to retailers worldwide.
eCommerce fulfillment is a cornerstone of Alliance’s success and
a significant growing division with over 38% of the companies $1.4
billion in sales being delivered directly to consumers homes. In
2021 over 13,845,000 products were delivered as a drop shipper for
Amazon, Walmart, Best Buy, Wayfair, GameStop, Kohls, Target, and
hundreds of additional eCommerce customers. The DTU division of
Alliance also has its own websites and retail brands such as
Deepdiscount.com, Popmarket.com, Importcds.com, Critic’s Choice
Video, Collectors Choice Music, and Movies Unlimited. In addition,
the Company has worldwide accounts on eBay, Amazon Marketplace,
Discogs, and many more.
Through strategic acquisitions led by Bruce and Jeff, Alliance
Entertainment has expanded its relationships with leading media
brands and global retailers, as well as diversified its product
offerings. As a public company, Alliance Entertainment will enhance
its ability to pursue future acquisitions, while also investing in
further automation of its distribution facilities and upgrading its
proprietary suite of software.
“Alliance Entertainment, with limited capital, has grown into a
leading distributor and wholesaler of entertainment products,” said
Bruce Ogilvie, Chairman of Alliance Entertainment. “We are an
essential partner to the best-known entertainment brands and
largest retailers. As a public company, we will be well positioned
to pursue future strategic combinations that further diversify our
products offerings, and to invest further in our operations and
proprietary technology.”
Jeff Walker, CEO of Alliance Entertainment, added, “Our Company
started as a business plan project at UC Irvine which led to the
opening of the CD Listening Bar in 1990. Just as Amazon started in
books in the 1990’s, we saw the opportunity to evolve our music
distribution business into a leading eCommerce company serving the
biggest brands in the entertainment industry and beyond. Today,
with a talented team of over 1,200 employees, and a disciplined
focus on service, selection, and technology, we are well positioned
to conquer new possibilities as a public company with access to
additional growth capital.”
Tom Finke, CEO & Chairman of Adara Acquisition Corp.,
commented, “Alliance Entertainment has built a strong foundation as
one of the largest physical media and entertainment product
distributors in the world and is a leader in fulfillment and
eCommerce distribution. The Company has also expanded the
efficiency and environmental efficacy of its operations through a
number of ESG efforts. Our business combination will fuel this
expansion, with a significant focus on increasing market share,
technological advancements, enhanced Direct-to-Consumer
relationships and capabilities, and expanding into new consumer
products. With a proven track record of accretive acquisitions, the
additional capital will enable Alliance Entertainment to
effectively execute on its roll-up strategy and accelerate future
growth.”
Key Transaction Terms
The business combination implies a proforma equity value of the
combined company of approximately $480 million. Upon completion of
the transaction, and assuming no redemptions by public shareholders
of Adara, the current owners of Alliance Entertainment will hold
approximately 78% of the combined company and current Adara
shareholders will hold approximately 22% of the combined
company.
Alliance Entertainment will receive proceeds of $115 million of
cash held in trust, less any deferred underwriting commissions,
transaction expenses and redemptions by public shareholders of
Adara exercising such rights.
The transaction, which has been unanimously approved by Alliance
Entertainment’s and Adara's boards of directors, is expected to
close in the fourth quarter of 2022 and is subject to approval by
Adara’s stockholders and other customary closing conditions,
including any applicable regulatory approvals.
Additional information about the transaction will be provided in
a Current Report on Form 8-K that will contain an investor
presentation to be filed by Adara with the Securities and Exchange
Commission (“SEC”) and will be available at www.sec.gov. In
addition, Adara intends to file a registration statement on Form
S-4 with the SEC, which will include a proxy statement/prospectus,
and will file other documents regarding the proposed transaction
with the SEC.
Advisors
ThinkEquity LLC is serving as financial advisor to Adara in
connection with the business combination. Loeb & Loeb LLP is
serving as legal advisor to Alliance Entertainment and Blank Rome
LLP is serving as legal advisor to Adara.
Investor Conference Call Information
Mr. Finke, Mr. Ogilvie and Mr. Walker will host the webcast. The
webcast will be accompanied by a presentation, which can be viewed
during the webcast or accessed via the investor relations section
of Adara Acquisition Corp.’s website here.
Alliance Entertainment and Adara will host a joint investor
conference call to discuss the proposed transaction on Thursday,
June 23, 2022, starting at 12:30 p.m. ET. Interested parties may
listen to the prepared remarks call via telephone by dialing
1-877-704-4453, or 1-201-389-0920 for international callers, and
providing the conference ID: 13730913. To view the webcast, please
click
https://viavid.webcasts.com/starthere.jsp?ei=1556853&tp_key=09d46197cb.
A telephone replay will be available for approximately 30 days.
The replay can be accessed by dialing 1-844-512-2921 (domestic
toll-free number) or 1-412-317-6671 (international) and providing
the pin number: 13730913.
About Alliance Entertainment
Alliance Entertainment is a premier distributor of music,
movies, and consumer electronics. We offer 485,000 unique in stock
SKU’s, including over 57,300 unique compact discs, vinyl LP
records, DVDs, Blu-rays, and video games. Complementing our vast
media catalog, we also stock a full array of related accessories,
toys and collectibles. With more than thirty-five years of
distribution experience, Alliance Entertainment serves customers of
every size, providing a robust suite of services to resellers and
retailers worldwide. Our efficient processing and essential seller
tools noticeably reduce the costs associated with administrating
multiple vendor relationships, while helping omni-channel retailers
expand their product selection and fulfillment goals. For more
information visit www.aent.com.
About Adara Acquisition Corp.
Adara raised $115 million in February 2021 and its securities
are listed on the NYSE American under the ticker symbols “NYSE:
ADRA, ADRA.U, ADRA.WS”. Adara is a blank check company organized
for the purpose of effecting a merger, share exchange, asset
acquisition, stock purchase, recapitalization, reorganization, or
other similar business combination with one or more businesses or
entities. Adara is led by its CEO, Thomas Finke (former Chairman
and CEO of Barings LLC) and its director, W. Tom Donaldson (founder
of Blystone & Donaldson). In addition to Messrs. Finke and
Donaldson, Adara’s Board of Directors also include Frank Quintero,
Dylan Glenn and Beatriz Acevedo-Greiff.
To learn more, please visit: https://www.adaraspac.com
Forward Looking Statements
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding estimates and forecasts of financial and
performance metrics, projections of market opportunity,
expectations and timing related to Alliance Entertainment’s
business, customer growth and other business milestones, potential
benefits of the proposed business combination (the “Proposed
Transactions”), and expectations related to the timing of the
Proposed Transactions.
These statements are based on various assumptions, whether or
not identified in this press release, and on the current
expectations of Adara’s and Alliance Entertainment’s management and
are not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by an investor as,
a guarantee, an assurance, a prediction, or a definitive statement
of fact or probability. Actual events and circumstances are
difficult or impossible to predict and will differ from
assumptions. Many actual events and circumstances are beyond the
control of Alliance Entertainment and Adara.
These forward-looking statements are subject to a number of
risks and uncertainties, including changes in domestic and foreign
business, market, financial, political, and legal conditions; the
inability of the parties to successfully or timely consummate the
Proposed Transactions, including the risk that any regulatory
approvals are not obtained, are delayed or are subject to
unanticipated conditions that could adversely affect the combined
company or the expected benefits of the Proposed Transactions or
that the approval of the stockholders of Adara or Alliance
Entertainment is not obtained; failure to realize the anticipated
benefits of the Proposed Transactions; risks relating to the
uncertainty of the projected financial information with respect to
Alliance Entertainment; risks related to the music, video, gaming,
and entertainment industry, including changes in entertainment
delivery formats; global economic conditions; the effects of
competition on Alliance Entertainment’s future business; risks
related to fulfilment network; risks related to expansion and the
strain on Alliance Entertainment’s management, operational,
financial, and other resources; risks related to operating results
and growth rate; the business could be harmed the amount of
redemption requests made by Adara’s public stockholders; and those
factors discussed in Adara’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 under the heading “Risk
Factors,” and the Current Report on Form 8-K filed on June 23, 2022
and other documents of Adara filed, or to be filed, with the
SEC.
Important Information and Where to Find It
This communication is being made in respect of the proposed
merger transaction involving Adara and Alliance Entertainment.
Adara intends to file a registration statement on Form S-4 with the
SEC, which will include a proxy statement/prospectus of Adara, and
certain related documents, to be used at the meeting of
stockholders to approve the proposed business combination and
related matters. Investors and security holders of Adara are urged
to read the proxy statement/prospectus, and any amendments thereto
and other relevant documents that will be filed with the SEC,
carefully and in their entirety when they become available because
they will contain important information about Alliance
Entertainment, Adara and the business combination. The definitive
proxy statement will be mailed to stockholders of Adara as of a
record date to be established for voting on the proposed business
combination. Investors and security holders will also be able to
obtain copies of the registration statement and other documents
containing important information about each of the companies once
such documents are filed with the SEC, without charge, at the SEC’s
web site at www.sec.gov. The information contained on, or that may
be accessed through, the websites referenced in this press release
is not incorporated by reference into, and is not a part of, this
press release.
Participants in the Solicitation
Adara and its directors and executive officers may be deemed
participants in the solicitation of proxies of Adara’s stockholders
in connection with the proposed business combination. Adara and its
executive officers and directors may also be deemed participants in
such solicitation. Security holders may obtain more detailed
information regarding the names, affiliations and interests of
certain of Adara’s executive officers and directors in the
solicitation by reading Adara’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2021, and the proxy
statement/prospectus and other relevant materials filed with the
SEC in connection with the business combination when they become
available. Information concerning the interests of Adara’s
participants in the solicitation, which may, in some cases, be
different than those of their stockholders generally, will be set
forth in the proxy statement/prospectus relating to the business
combination when it becomes available.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20220623005383/en/
For investor inquiries, please contact: MZ Group Chris
Tyson/Larry Holub (949) 491-8235 AENT@mzgroup.us
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