Completes Second Acquisition in the eCommerce
Vertical
TORONTO, Feb. 1, 2022 /CNW/ - Pluribus Technologies Corp.
(TSXV: PLRB) ("Pluribus" or the "Company"), a growing
acquiror of small, profitable software companies, today
announced that, pursuant to a share purchase agreement dated
January 31, 2022 (the "Share
Purchase Agreement"), it has acquired (the
"Acquisition") all of the issued and outstanding shares in
the capital stock of Veemo, Inc., which is the sole member of, and
holder of the entire ownership interest in both Social5, LLC and
Social5 Development Group, LLC (collectively,
"Social5").
Founded in 2012, Social5 is profitable technology company that
utilizes leading-edge software and content to enable
small-to-medium-sized businesses ("SMB's") to effectively
manage their social media footprint. With a unique combination of
proprietary technology and journalism-trained talent, Social5 has
grown to serve businesses in hundreds of industry verticals
including healthcare, finance, education and real estate. Among its
innovations and contributions to the Pluribus portfolio, Social5
has developed a scalable content-distribution platform that
leverages artificial intelligence for publication. With an
experienced leadership team and sophisticated tools for evaluating
and executing online marketing campaigns, Social5 has become a
partner of choice for SMB's looking to strengthen and expand their
digital marketing efforts and increase their revenue.
"As we look to replicate our success rolling up companies in the
eLearning vertical, Social5 is our second acquisition in the
eCommerce vertical and the beginning of a consolidation strategy in
that space," said Richard Adair,
Chief Executive Officer of Pluribus Technologies. "The use of
social media as a marketing channel has seen explosive growth in
recent years and we were attracted by Social5's proprietary
platform, diverse SMB customer base and high volume of recurring
revenue. We anticipate there could be a number of cross-selling
opportunities within our existing portfolio through the offer of an
expanded range of products and services to multiple, complementary
customer bases. Following our recent financing and go-public
transaction, we remain focused on a small selection of key
verticals, acquiring companies that both meet our return criteria
and have an opportunity to deliver stable organic growth once we
leverage the available synergies across our portfolio."
The team behind Social5 is a blend of accomplished executives in
the eCommerce sector led by Rob
Wellman who will remain involved in Social5 post-acquisition
to ensure a smooth integration of Social5 into the Pluribus
portfolio.
"Over the last decade, we have built something exciting,
something disruptive," said Rob
Wellman, Chief Executive Officer of Social5. "With our
unique technologies, we have made it possible for small businesses
to compete with larger brands at a price point that makes good
financial sense. Our team is focused on helping entrepreneurs
navigate the increasingly complex world of marketing through the
social media channel with a 'one-stop shop' solution. Through this
acquisition, we can accelerate growth by leveraging the
entrepreneurial prowess of the Pluribus leadership team and the
cross-selling opportunities that exist within the Pluribus
portfolio."
Acquisition Rationale
- Social5 has a strong history as a profitable business with an
established operational track record;
- As Pluribus continues to do in the eLearning vertical, this
acquisition marks the beginning of a roll up of software companies
in the fragmented eCommerce vertical;
- There are more than 30 million SMB's in the U.S.
alone1;
- North American digital ad spend is expected to grow by 37.5% in
20212; and
- Potential cross-selling opportunities with Pluribus' other
eCommerce businesses to multiple customer bases – Social5 is
targeting the same SMB customers as POWR Inc. and that provides
both companies with a new channel for distribution.
1 Source: https://cdn.advocacy.sba.gov/wp-content/uploads/2020/11/05122043/Small-Business-FAQ-2020.pdf.
|
2 Source:
https://www.emarketer.com/content/worldwide-digital-ad-spending-year-end-update
|
Terms of the Acquisition
Pursuant to the terms of the Share Purchase Agreement, the
Company has agreed to pay the current shareholders of Social5 an
aggregate of US$3,525,000 in cash
less a holdback of US$345,000. In
addition, the current Social5 shareholders will be entitled to an
earn-out based on the achievement of future performance targets.
The price paid for the Acquisition falls within Pluribus'
historical target range for Adjusted EBITDA3 and the
Acquisition is expected to be immediately accretive.
3 Adjusted EBITDA is a non-IFRS measure as
described in the Non-IFRS Measures section of this news
release.
About Social5
Social5 is a social media marketing company that uses
proprietary technologies to provide affordable marketing solutions
to an underserved SMB market. With an increasing number of
consumers turning to social media channels such as Facebook,
LinkedIn, Twitter and Instagram to research and purchase products,
Social5 provides a suite of marketing solutions designed to help
SMB's. These include graphical design, content creation, social
media advertising and reputation management. Through its scalable
content-delivery system and the recruitment of award-winning
writers from Top-100 newspapers nationwide, Social5 has
distinguished itself as a leading platform for helping SMB's retain
existing customers and reach out to new ones. For more information,
please visit: https://www.social5.com/.
About Pluribus Technologies Corp.
Pluribus is a technology company that acquires small, profitable
business-to-business software companies at reasonable prices in a
range of verticals and industries. Pluribus provides experienced
sales and marketing resources, strategic partnerships and enabling
technologies including automation, self-service and artificial
intelligence/machine learning to create new revenue streams and
enable companies to grow into significant organizations in their
respective markets. For more information, please visit:
https://www.pluribustechnologies.com/.
Non-IFRS Measures
The Company uses non-IFRS measures to assess its operating
performance. Securities regulations require that companies caution
readers that earnings and other measures adjusted to a basis other
than IFRS do not have standardized meanings and are unlikely to be
comparable to similar measures used by other companies.
Accordingly, they should not be considered in isolation. The
Company uses Adjusted EBITDA as a measure of operating performance.
Therefore, Adjusted EBITDA may not be comparable to similar
measures presented by other issuers. Adjusted EBITDA is calculated
based on results from operating activities adjusted for
depreciation of property and equipment and right-of-use assets, and
acquisition related restructuring costs. Management uses Adjusted
EBITDA to evaluate operating performance as it excludes
amortization of software and intangibles (which is an accounting
allocation of the cost of software and intangible assets arising on
acquisition), any impact of finance and tax related activities,
asset depreciation, foreign exchange gains and losses, other income
and restructuring costs primarily related to acquisitions
Forward-Looking Information
Certain information in this press release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking information in this press release
includes, but is not limited to, statements with respect to the
business plans of the Company, including the successful completion
and pace of future acquisitions, the Company management's
expectation on the growth, profitability and performance of its
current and future acquisitions, Social5's continued growth and
profitability and, Rob
Wellman's engagement by Social5 following the closing
of the Acquisition, the anticipated synergies between Social5 and
the Company, the Company's ability to continue acquiring
business-to-business software companies at reasonable prices and
the Company's ability to grow its portfolio companies into
significant organizations. Forward-looking statements are often
identified by terms such as "may", "should", "anticipate",
"expect", "potential", "believe", "intend" or negatives of these
terms and similar expressions.
Forward-looking statements are based on certain assumptions,
including the Company's ability to complete acquisitions on
favorable terms; the Company's ability to manage a complex
portfolio of companies effectively; the Company's ability to
scale its management team to support a rapid pace of growth; the
Company's ability to raise sufficient financing to continue the
pace of its acquisition strategy; the Company's ability to maintain
its rapid pace of growth. Other assumptions include industry
trends, the availability of growth opportunities, and general
business, economic, competitive, political, regulatory and social
uncertainties will not prevent the Company from conducting its
business. While the Company considers these assumptions to be
reasonable based on information currently available, they are
inherently subject to significant business, economic and
competitive uncertainties and contingencies and they may prove to
be incorrect. Forward-looking information speaks only to such
assumptions as of the date of this release.
Forward-looking statements also necessarily involve known and
unknown risks, including without limitation, risks associated with
general economic conditions, including the COVID-19 pandemic,
adverse industry events, marketing costs, loss of markets, future
legislative and regulatory developments, the inability to access
sufficient capital on favourable terms, the Company's limited
operating history; ability to complete favorable acquisitions; the
software industry in Canada and
internationally, income tax and regulatory matters, the ability of
the Company to execute its business strategies, including the
ability manage a complex portfolio of companies effectively,
competition, currency and interest rate fluctuations, and other
risks.
Readers are cautioned that the foregoing is not exhaustive.
Readers are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ from those anticipated.
Forward-looking statements are not guarantees of future
performance. The purpose of forward-looking information is to
provide the reader with a description of management's expectations,
and such forward-looking information may not be appropriate for any
other purpose. Except as required by law, the Company disclaims any
obligation to update or revise any forward-looking statements,
whether as a result of new information, events or otherwise.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
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 press
release.
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SOURCE Pluribus Technologies Corp.