WeCommerce signed a definitive purchase agreement to acquire substantially all of the assets of Stamped for up to $110 million. Stamped is a SaaS platform enabling online merchants to implement and manage customer reviews and loyalty programs through Shopify and other e-commerce platforms.
Since its launch in 2016, Stamped has grown to approximately $11 million in annualized recurring subscription revenue as of the month ending Dec. 31, 2020, reflecting an estimated growth rate of more than 100% compared with the same period in 2019, with minimal spend on customer acquisition. Net revenue retention was estimated to be approximately 125% in Q4/20.
“Merchants turn to Stamped to build social trust and power customer engagement. Stamped’s strong growth is a testament to its product-first focus and customer obsession,” Chris Sparling, CEO of WeCommerce, said. “We are thrilled to welcome Stamped into the WeCommerce family and are excited about its future growth potential.”
“We could not be more excited to join WeCommerce,” Tommy Ong, founder and CEO of Stamped, said. “WeCommerce’s management team brings over a decade of experience developing similar businesses, which is expected to help us accelerate growth. Amongst many suitors, we chose WeCommerce because of their founder friendly approach, straightforward deal structure and focus on the long term.”
Pursuant to the purchase agreement, WeCommerce agreed to pay Stamped an aggregate purchase price of up to $110 million, comprising:
- $75 million payable in cash on closing of the acquisition
- $10 million through the issuance of 496,697 Class A common shares of WeCommerce
- $25 million payable in Q1/22 contingent on, among other things, Stamped achieving a minimum revenue target in 2021 of $10 million
The upfront cash consideration will be funded through a combination of cash on hand and a senior secured credit facility with a syndicate of lenders led by JPMorgan Chase Bank from which WeCommerce has received aggregate financing commitments of $77 million. The credit facility is expected to consist of a revolving credit facility, a term loan facility and a delayed draw term loan facility.
In addition to using it to finance the acquisition, WeCommerce plans to use the proceeds of the credit facility to finance the working capital needs and for general corporate purposes of the company and its subsidiaries in the ordinary course of business, as well as to finance future acquisitions and repay existing indebtedness.
The commitments of the lenders are subject to the execution of mutually acceptable credit documentation giving effect to the terms provided in the commitment documents between the company and the lenders and the satisfaction of the other customary conditions to closing, including the satisfaction of all conditions to the completion of the acquisition.
The acquisition is subject to customary closing conditions, including the approval of the TSXV, receipt of certain third-party consents and 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.
WeCommerce is a Canadian e-commerce technology holding company that owns a family of companies and brands in the Shopify partner ecosystem, including Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash and Foursixty.