AUSTIN, Texas, Dec. 13, 2018 /PRNewswire/ -- Upland
Software, Inc. (Nasdaq: UPLD), a leader in cloud-based Enterprise
Work Management software, today announced it has acquired Adestra
Ltd., a leading provider of enterprise-grade email marketing,
transaction and automation software. Adestra's cloud solution
enables over 400 leading brands to understand and engage individual
customers with relevant, timely, and effective communications.
Adestra will be combined with Upland's mobile messaging, customer
engagement, and knowledge management solutions to create a powerful
product suite serving the $5.9
billion CXM market which is forecast to grow 23% per year to
$16.9 billion by 2022.1
The acquisition adds approximately $18
million in annualized revenues and will be immediately
accretive to Upland's Adjusted EBITDA per share.
The acquisition of Adestra adds a fundamental component to
Upland's CXM Solution Suite, which now includes multi-channel
messaging and email, automated mobile conversations via SMS, MMS,
and RCS, mobile wallet functionality, Voice of Customer (VOC) and
Voice of Employee (VOE) solutions, advanced knowledge management,
and marketing automation and personalization. Upland will continue
to buy, build, and integrate additional components to this CXM
offering in order to enable more personalized customer experience,
enhanced multi-channel engagement across the customer journey,
deeper process automation, sophisticated analytics and reporting,
and coordinated services delivery with CXM expertise.
"Adestra broadens Upland's product portfolio, strengthens our
CXM solution suite, and builds our sales capacity and footprint,"
said Jack McDonald, chairman and CEO
of Upland Software. "Moreover, the transaction is immediately and
meaningfully accretive to Adjusted EBITDA per share and takes
Upland to an approximate $190 million
annualized revenue run rate," he added. "As this transaction
demonstrates, our acquisition pipeline is robust, and we are
actively pursuing additional opportunities."
"Sophisticated enterprises need multiple intelligent,
inter-connected communications channels that integrate with key
platforms to meaningfully engage across the entire customer journey
at scale," said Jed Alpert, SVP of
Customer Experience Management Solutions at Upland Software.
"Adestra's established presence in restaurant and retail, travel,
media and publishing, and nonprofits, enhances our existing
strengths in these industries, and the addition of their technology
to Upland's Customer Experience Management suite will enable our
customers to deliver consistently personalized, multi-channel
experiences across their entire customer lifecycle."
The purchase price paid for Adestra was $56.0 million in cash at closing, net of cash
acquired, and a $4.2 million cash
holdback payable in 12 months (subject to indemnification claims).
Upland expects the acquisition to generate annual revenue of
approximately $18 million, of which
approximately $16.7 million is
recurring, subject to reductions for a deferred revenue discount as
a result of GAAP purchase accounting, estimated at $0.1 million for the remaining half of
December 2018. The acquisition is
within Upland's target range of 5-8x pro forma Adjusted EBITDA and
will generate at least $8.0 million
in Adjusted EBITDA annually once fully integrated. The acquisition
will be immediately accretive to Upland's Adjusted EBITDA per
share.
In connection with the acquisition of Adestra, Upland amended
and expanded its credit facility from $358.9
million to $400 million.
Specifically, $61.1 million of new
term debt was drawn, taking Upland's gross debt outstanding from
$223.9 million to $285.0 million with debt, net of cash on hand,
now at approximately $265 million at
a maximum interest rate of LIBOR + 400 basis points (currently at
approximately 6.3%). Further details regarding the transaction can
be obtained in the Form 8-K filed on December 13, 2018.
Business Outlook
Upland today also announced that it has raised its full year
2018 guidance to reflect the Adestra acquisition, raising revenue,
recurring revenue, and Adjusted EBITDA guidance ranges. The
increase in 2018 revenue guidance below is net of an estimated
$0.1 million reduction for a deferred
revenue discount as a result of GAAP purchase accounting and all
guidance adjustments are prorated for a closing date of
December 12, 2018.
For the quarter ending December 31,
2018, Upland expects reported total revenue to be between
$42.5 and $44.5 million, including subscription and support
revenue between $39.4 and
$40.6 million, for growth in
recurring revenue of 62% at the mid-point over the quarter-ended
December 31, 2017. Fourth quarter
2018 Adjusted EBITDA is expected to be between $15.6 and $16.4
million, for an Adjusted EBITDA margin of roughly 37% at the
mid-point, representing growth of 64% at the mid-point over the
quarter-ended December 31, 2017
For the full year ending December 31,
2018, Upland expects reported total revenue to be between
$147.2 and $149.2 million, including subscription and
support revenue between $134.2 and
$135.4 million, for growth in
recurring revenue of 58% at the mid-point over the year ended
December 31, 2017. Adjusted EBITDA is
expected to be between $52.0 and
$52.8 million, representing growth of
73% at the mid-point over the year ended December 31, 2017. The transaction will be
immediately accretive to Upland's Adjusted EBITDA per share.
About Upland Software
Upland Software (Nasdaq: UPLD) is a leading provider of
cloud-based Enterprise Work Management software. Our family of
applications enables users to manage their projects, professional
workforce and IT investments; automate document-intensive business
processes; and effectively engage with their customers, prospects
and community via the web and mobile technologies. With more than
4,000 customers and over 450,000 users around the world, Upland
Software solutions help customers run their operations smoothly,
adapt to change quickly, and achieve better results every day. To
learn more, visit www.uplandsoftware.com.
About Adestra
Adestra is a leading provider of enterprise-grade email
marketing, transaction and automation SaaS solutions that provides
more than 400 leading brands with the technology, skills, and
support to understand their individual customers and engage them
with relevant, timely, and effective communications.
Shea & Company served as exclusive financial advisor to
Adestra.
Notes & Forward-looking Statements
Annualized revenues exclude the impact of deferred revenue
discount associated with GAAP purchase accounting. This release
contains forward-looking statements, which are subject to
substantial risks, uncertainties and assumptions. Accordingly, you
should not place undue reliance on these forward-looking
statements. Forward-looking statements include any statement that
does not directly relate to any historical or current fact and
often include words such as "target," "believe," "expect,"
"anticipate," "intend," "plan," "estimate," "seek," "will," "may"
or similar expressions. Actual results may differ materially from
those indicated by such forward-looking statements as a result of
various important factors, including: our financial performance and
our ability to achieve, sustain or increase profitability or
predict financial results; our ability to attract and retain
customers; our ability to deliver high-quality customer service;
lack of demand growth for enterprise work management applications;
our ability to effectively manage our growth; our ability to
consummate and integrate acquisitions and mergers; our ability to
maintain our senior management and key personnel; our ability to
maintain and expand our direct sales organization; the performance
of our resellers; our ability to adapt to changing market
conditions and competition; our ability to successfully enter new
markets and manage our international expansion; fluctuations in
currency exchange rates; the operation and reliability of our
third-party data centers and other service providers; and factors
that could affect our business and financial results identified in
Upland's filings with the Securities and Exchange Commission (the
"SEC"), including Upland's most recent annual report on Form 10-K
filed with the SEC. Additional information will also be set forth
in Upland's future quarterly reports on Forms 10-Q, annual reports
on Form 10-K, and other filings that Upland makes with the SEC. The
forward-looking statements herein represent Upland's views as of
the date of this press release and these views could change.
However, while Upland may elect to update these forward-looking
statements at some point in the future, Upland specifically
disclaims any obligation to do so. These forward-looking statements
should not be relied upon as representing the views of Upland as of
any date subsequent to the date of this press release.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use non-GAAP
financial measures including Adjusted EBITDA.
We use non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. Our management believes that non-GAAP financial
measures provide meaningful supplemental information regarding our
performance and liquidity by excluding certain expenses and
expenditures that may not be indicative of our recurring core
business operating results, such as our revenues excluding the
impact for foreign currency fluctuations or our operating
performance excluding not only non-cash charges, but also discrete
cash charges that are infrequent in nature. We believe that both
management and investors benefit from referring to non-GAAP
financial measures in assessing our performance and when planning,
forecasting, and analyzing future periods. Non-GAAP financial
measures also facilitate management's internal comparisons to our
historical performance and liquidity as well as comparisons to our
competitors' operating results. We believe non-GAAP financial
measures are useful to investors both because they allow for
greater transparency with respect to key metrics used by management
in its financial and operational decision-making, and they are used
by our institutional investors and the analyst community to help
them analyze the health of our business.
Upland defines Adjusted EBITDA as net income (loss), calculated
in accordance with GAAP, plus net income (loss) from discontinued
operations, depreciation and amortization expense, interest
expense, net, other expense (income), net, provision for income
taxes, stock-based compensation expense, acquisition-related
expenses, non-recurring litigation costs, and purchase accounting
adjustments for deferred revenue.
For a reconciliation of non-GAAP financial measures to the most
directly comparable GAAP financial measures, please see Upland's
earnings press releases filed on Forms 8-K with the SEC and on the
Investor Relations section of Upland's website
at investor.uplandsoftware.com. We are unable to reconcile any
forward-looking non-GAAP financial measures to their directly
comparable GAAP financial measures because the information which is
needed to complete a reconciliation is unavailable at this time
without unreasonable effort.
Media Contact:
Christina Turner
1.833.UPLAND1 (Press 4 for Media Relations)
media@uplandsoftware.com
1. MarketsandMarkets. 2017,
www.marketsandmarkets.com/Market-Reports/customer-experience-management-cem-market-543.html.
Accessed 11 Dec. 2018.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/upland-software-acquires-adestra-raises-guidance-300765050.html
SOURCE Upland Software, Inc.