EMERGE has completed the sale of WagJag for $1M in cashEMERGE originally acquired WagJag for $500K in November 2017 from Torstar Corp.EMERGE anticipates the sale of WagJag to accelerate further HQ cost savings in relation to servicing the WagJag businessFollowing the Transaction, EMERGE retains 5 brands across 3 main verticals (Pets, Grocery, and Golf) in Canada and the U.S., namely WholesalePet, truLOCAL, Carnivore Club, UnderPar, and JustGolfStuff
TORONTO, Aug. 10, 2023 /CNW/ – EMERGE Commerce Ltd. (TSXV: ECOM) (“EMERGE”, or the “Company”), a diversified acquirer and operator of niche e-commerce brands, announces that, further to its news release dated July 24, 2023, EMERGE has completed the sale of WagJag and BeRightBack to 15124174 Canada Inc., a wholly owned subsidiary of BrandFX (the “Buyer”).
Pursuant to the sale of WagJag and BeRightBack (the “Transaction”), EMERGE received cash consideration of $1,000,000 on closing of the Transaction, subject to certain closing adjustments.
EMERGE originally acquired the business for $500,000 from Torstar Corp in 2017.
EMERGE expects further HQ cost reductions in association with the sale of WagJag, given the reduced overheads required to service the go-forward brand portfolio.
“Having now streamlined our HQ team to oversee our 3 core verticals, we expect to be able to drive significant savings which we plan to reflect in our future results. We have amassed a valuable e-commerce brand portfolio, including multiple profitable businesses that deserve more attention, and we believe the profitable sale of WagJag will facilitate that added focus towards our largest, most compelling opportunities,” commented Ghassan Halazon, Founder and CEO of EMERGE.
Following the Transaction, EMERGE retains 5 brands across 3 main verticals (Pets, Grocery, and Golf) in Canada and the U.S., namely WholesalePet, truLOCAL, Carnivore Club, UnderPar, and JustGolfStuff.
“The WagJag case study is now complete. In November 2017, we acquired a declining, loss-making business from Torstar Corp., and today, after a tremendous amount of work, the business is exhibiting strong double-digit sales growth lately combined with lean operations, a testament to the team’s efforts and the EMERGE playbook. With our shifting priorities, we felt it was the right time to sell WagJag at a healthy premium to our original purchase price. We wish the new owners of WagJag all the best with this long-standing Canadian daily deals brand, and with the special team that continues on with them,” commented Halazon.
“This is a pivotal time for brands & retailers to connect with consumers in new digital ways as they redevelop their habits. The pandemic catalyzed the evolution to digital behavior, but the reality remains that the majority of commerce is still conducted offline. We have teamed up by merging WagJag’s impressive standing and influence in Canada’s alternative marketing landscape with BrandFX’s customer engagement platforms, deep profiling and data-driven insights to create an unmatched force on a national scale,” commented Gary Kalk and Omar Sahyoun, co-founders at 15124174 Canada Inc., a wholly owned subsidiary of BrandFX.
No finder’s fees were paid in connection with the Transaction. The Transaction is an Exempt Transaction as defined under the policies of the TSX Venture Exchange.
The Company entered into an amendment agreement to the Company’s amended and restated credit agreement dated October 27, 2022, with its existing lender (the “ARCA”) pursuant to which, inter alia, the Company repaid the lender $400,000 from proceeds of the Transaction. The Company remains in good standing with its existing lender, which it has worked with since November 2019.
EMERGE is a diversified acquirer and operator of quality niche e-commerce brands in Canada and the U.S. Our subscription and marketplace e-commerce properties provide our members with access to offerings across our pets, premium meat/grocery, and golf verticals. EMERGE was named one of Canada’s Top Growing Companies by Globe and Mail in 2022 (and 2020), and one of the fastest growing companies in Canada by the Startup 50 in 2020.
To learn more visit https://www.emerge-commerce.com/
BrandFX is a permanent holding company powered by a coalition of business units to incubate, catalyze or invest in scalable solutions. Combining its conversion acceleration platform which deepens the 2-way relationship between brands and consumers (www.GOcxm.com) and its interactive retail POS platform that turns every cell phone into a shopping cart (www.Shopley.com), BrandFX takes a unique approach in leveraging technology and customer-centric innovation to build market share in “white spaces” where traditional brands & retailers are not effectively meeting today’s customer needs.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains 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 related to the closing of the Transaction including, without limitation, any benefit that may be derived by the Company from the Transaction, including, without limitation, any cost savings or other material benefit to the working capital or financial position of the Company as a result of the Transaction, as well as other 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. There is no guarantee the Transaction will result in cost savings as contemplated or at all, and the forward-looking information contained herein is based on the assumptions of management of the Company as of the date hereof including, without limitation, assumptions with respect to the financial position and working capital of the Company, and the conditions of the financial markets and the e-commerce markets generally, among others. 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 risks related to the disposition of an operating business by the Company, risks that the benefits derived from the Transaction may not be as expected or that the Company may not see any benefit from the Transaction, risks that each party to the Agreement may not satisfy its obligations or covenants, risks that the Company may be subject to litigation as a result of the Transaction including allegations of misrepresentation or breach of conditions or covenants, as well as the risk factors discussed in the Company’s MD&A, and most recent Annual Information Form which 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.
On Behalf of the Board
Ghassan Halazon
Director, President, and CEO
SOURCE EMERGE Commerce Ltd.