Focused on B2B Partnerships in Growing Fantasy
Sports Market While Maintaining Upside Through Deal Structure and
Retained Assets, Business is Restructured
Seeks Strategic Alternatives for Certain Other
Remaining Assets
Viggle Inc. (Nasdaq:VGGL) entered into an agreement to
sell a number of assets, including the Viggle applications and
rewards program, to Perk.com, a leading cloud-based mobile rewards
platform provider based in Austin, Texas, which trades on the
Toronto Stock Exchange under the symbol PER.TO. Perk is a
mobile-centric rewards platform targeting the “New Consumer” and
rewarding people for their everyday mobile and internet
activities.
Viggle intends to rebrand itself as DraftDay to focus greater
attention on its recently acquired DraftDay Gaming Group subsidiary
which it will retain as its entertainment publishing site (upon
completion of the transaction). The fantasy sports market is
rapidly growing, with IBISWorld estimating that revenue
for the fantasy sports market has grown at an annual rate of 10.8
percent to $2.0 billion from 2010 to 2015. DraftDay is a
differentiated platform in the industry because it is focused on
B2B partnerships, including new ventures with companies within the
regulated gaming industry. Viggle will change its trading symbol to
DDAY, which it has reserved with the NASDAQ.
At the present time, Wetpaint.com, its play-along app MyGuy, and
its B2B provider of digital rewards in loyalty programs Choose
Digital, will be retained and managed by Viggle as it explores
strategic alternatives for these non-DraftDay assets. Due to the
deal structure, Viggle anticipates that it will participate in the
upside of the Viggle assets through the shares that it receives in
Perk.com, both at the closing of the transaction and upon earn-out,
depending on the business meeting certain performance metrics and
PER.TO shares reaching certain targeted levels.
Robert F.X. Sillerman, Executive Chairman and Chief Executive
Officer, commented, “Having launched the Viggle app just a few
short years ago, we have accomplished a lot. Perk.com is now a
natural fit for further monetizing these assets, as it is the
leading mobile rewards program. We believe this transaction will be
a win-win for all participants to the transaction, including our
shareholders, as we expect to benefit from two fast growing digital
spaces with DraftDay Gaming Group and our stake in Perk.com. The
transaction will allow us to achieve continuing upside of a
significant ownership position in this exciting combination of
businesses.”
Financial Details of the Transaction
Upon closing of the transaction, Perk.com has agreed to pay 1.5
million PER.TO shares to Viggle, which equates to $4.7 million
based on the closing price of PER.TO shares on December 11, 2015.
Perk.com is also advancing $1 million to Viggle, which can be
repaid by reducing the number of shares Viggle receives at closing
to 1.37 million shares. Additionally, if the annual revenue of the
combined companies exceeds $130 million in either 2016 or 2017,
Viggle will receive an additional 2.0 million PER.TO shares. Perk
will assume all of Viggle’s points liability. Perk will also
provide Viggle with two warrants to purchase a total of 2.0 million
PER.TO shares at CDN $6.25 per share. The first warrant will vest
and become exercisable for 1.0 million PER.TO shares if within two
years of the closing, PER.TO shares trade at an average of CDN
$12.50 for 20 consecutive days. The second warrant will vest and
become exercisable for an additional 1.0 million PER.TO shares if
within two years of closing, PER.TO shares trade at an average of
$18.75 for 20 consecutive days.
Mr. Sillerman stated, “Assuming the earnout is achieved and the
warrants become exercisable, Viggle will have received
approximately $75MM in consideration, with continuing potential
upside for Viggle’s shareholders.”
The transaction is expected to close in early 2016, subject to
the customary closing conditions.
About Viggle
Viggle is an entertainment marketing and rewards platform and
fantasy sports provider whose app rewards its members for watching
TV shows, discovering new music and playing interactive games. The
Viggle Platform had an average monthly total reach of 18.6 million
for the three months ended September 30, 2015, including nearly 10
million Viggle registered users. Since its launch, Viggle members
have redeemed nearly $29 million in rewards for watching their
favorite TV programs and listening to music. Members can use
Viggle’s store, accessible through the Viggle app or on Viggle.com,
to redeem their Viggle Points for TV show, movie and music
downloads. In addition, Viggle operates Wetpaint, which offers
entertainment and celebrity news online; NextGuide, maker of
technology that helps consumers search for, find, and set reminders
for TV shows and movies; and Choose Digital, a digital marketplace
platform that allows companies to incorporate digital content into
existing rewards and loyalty programs in support of marketing and
sales initiatives. Viggle is also the largest shareholder of
DraftDay Gaming Group, the third-largest operator in the daily
fantasy sports industry, which offers Viggle members an exciting
and ever-growing selection of real-time fantasy sports games with
monetary rewards. For more information, visit www.viggle.com or
follow us on Twitter @Viggle.
About DraftDay
DraftDay Gaming Group, Inc. offers a high quality daily fantasy
sports experience directly to consumers and to businesses desiring
turnkey solutions to new revenue streams. Viggle is the largest
shareholder of DraftDay, with a 44% stake. Sportech owns 35%. By
combining and capitalizing on the well-established operational
business assets of DraftDay and Sportech, the new DraftDay is
well-positioned to become a significant player in the explosive
fantasy sports market. DraftDay has paid out over $30 million
in prizes with increased player retention and brand loyalty. Viggle
assets MyGuy, which will be operated in conjunction with
DraftDay, and Viggle Football have already met with
great success by offering exciting real-time interactive
participation to its nearly 10 million registered users in tandem
with professional and college football and basketball games.
About Perk
Perk was formed in December, 2009 and headquartered in Austin,
TX. Perk provides a rewards platform targeting consumers primarily
by rewards for people's every day mobile and internet activities.
Perk offers Perk Points, a digital reward, which can be redeemed
for gift cards and cash. Members can earn Perk Points through a
wide variety of activities including shopping, watching videos, and
playing social games. Perk currently owns and operates 12 mobile
applications allowing members to earn Perk Points. Perk also
operates numerous owned websites. In addition to offering Perk
Points through its own mobile applications and websites, Perk
launched its Appsaholic Software Development Kit, which allows
mobile and desktop publishers to reward their users with rewards,
such as gift cards, for engaging with the publisher's applications
and websites.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve
inherent risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated. All
information provided in this press release is as of the date of
this release. Except as required by law, Viggle Inc. undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events.
View source version on
businesswire.com: http://www.businesswire.com/news/home/20151214005688/en/
For Viggle:Investors:Tom McLean, General
Counsel212-231-0092orMedia Relations:Dian Griesel
InternationalLaura Radocaj, 212-825-3210lradocaj@dgicomm.com