- Acquisition Increases MeetMe’s Global
Portfolio for Mobile Social Discovery to 10.6 Million Mobile
Monthly Active Users
- Expected to Contribute At Least $9.0
Million in Adjusted EBITDA and be Accretive to Earnings in First 12
Months Post Closing
MeetMe, Inc. (NASDAQ: MEET), a public market leader for social
discovery, today announced it has executed a definitive agreement
to acquire If(we), Inc., a social and mobile technology company,
for $60.0 million in cash. This acquisition furthers MeetMe’s
strategy to innovate, acquire and build the largest mobile
portfolio of brands for meeting new people. The if(we) acquisition
is expected to provide greater scale for monetization and increased
profitability for the combined company.
if(we) is a social and mobile technology company based in San
Francisco with:
- Two leading mobile brands for meeting
new people, Tagged and hi5;
- A community that spans over 100
countries, and apps that are available in 15 different
languages;
- 2016 total revenue of approximately $44
million;
- Q4 2016 mobile revenue up 56% over Q4
2015. Mobile advertising revenue up 93% in the same periods;
- 2.3 million mobile and 5.4 million
total monthly active users (MAU) in Q4 2016;
- 10.4 million mobile chats per day in Q4
2016;
- 18,000 new registered mobile users
added each day on average in Q4 2016.
Key highlights of the expected scale of the new combined
company (MeetMe + if(we)) include:
- Mobile MAU of 10.6 million, an increase
of 28% from MeetMe’s 8.3 million average in Q4 2016
- Mobile daily active users (DAU) of 2.8
million, an increase of 40% from MeetMe’s 2.0 million average in Q4
2016;
- Mobile Chats sent per day of 65.3
million, an increase of 19% from MeetMe’s 54.9 million average in
Q4 2016;
- Mobile new users per day of 130,000, an
increase of 16% from MeetMe’s 112,000 per day average in Q4
2016;
- Nearly 1.1 million US mobile DAU.
Financial impact of acquisition:
- Expected to provide significantly
increased scale in user base and revenues, and exhibit strong
operating leverage;
- Expect if(we) to contribute at least
$9.0 million of Adjusted EBITDA and be accretive to earnings in the
first 12 months post-closing.
Geoff Cook, CEO of MeetMe, said, “We believe this combination
provides a clear pathway to $150 million in annualized revenue with
adjusted EBITDA of $50 million for our combined company. We are
very excited to add if(we) and its flagship brands Tagged and hi5
to our portfolio of mobile apps for meeting and chatting with new
people. if(we) brings a sizable global community, with strength in
the US, to our portfolio. Their mobile apps are experiencing
significant revenue growth and we expect that to accelerate in 2017
as we introduce our best practices around engagement and
monetization. I am excited by the opportunity to work closely with
if(we)’s talented team to accelerate growth and engagement across
our portfolio of brands, which are aimed at meeting the universal
need for human connection.”
“What’s more,” Cook continued, “this announcement comes on the
heels of a very strong period of growth for MeetMe, with total
revenue growth of 34 percent in 2016, as reported today, as well as
adjusted EBITDA margins of 39 percent. We believe this acquisition
will further build on this momentum by increasing our scale for
monetization and increased profitability.”
The Company expects that Tagged and hi5 will remain separate
brands and standalone mobile applications following the closing of
the acquisition and if(we) headquarters will remain in San
Francisco. The Company has extended offers of employment to
approximately 87 of the company’s 100 employees. Likewise, if(we)’s
CEO, Dash Gopinath has agreed to assist with the transition for one
year after the closing.
David Clark, Chief Financial Officer of MeetMe, added, “We
expect the acquisition to close in the second quarter and to be
accretive to earnings and to generate additional free cash flow for
MeetMe in the first twelve months following the closing and beyond.
Over time, we believe that through additional synergies from
combining our technology platforms, optimizing our monetization
engine, and cross-promoting to each user base we can generate
additional value from this acquisition.”
The Company expects to fund the acquisition from MeetMe cash on
hand and cash from operations, and from other sources of financing
available to MeetMe, including a $30.0 million bank loan from J.P.
Morgan Chase Bank, N.A. associated with the acquisition.
To support its larger scale, the Company is today announcing a
change to engineering leadership. Skout’s co-founder and CTO Niklas
Lindstrom has joined MeetMe as Chief Technology Officer, to be
based in our West Coast office, and MeetMe’s former CTO Rich
Friedman has rejoined the company as SVP Engineering, to be based
in our East Coast location. Mr. Lindstrom replaces MeetMe’s former
Chief Technology Officer, Jonah Harris, who has agreed to remain
with the Company and assist with the transition over the coming
months.
On February 28, 2017, the Company granted stock options to
purchase an aggregate of up to 500,000 shares of its common stock
and restricted stock awards representing an aggregate of 300,000
shares of common stock to Messrs. Lindstrom and Friedman as an
inducement material to their employment. Each option has a ten-year
term, a three-year vesting period, subject to continued employment,
and an exercise price of $4.83 per share, the closing price per
share of the Company’s common stock on the grant date. Each
restricted stock award vests one-third each year during a
three-year vesting period. Vesting on both are subject to continued
employment. The grants were approved by the Company’s Board of
Directors, including a majority of its independent directors, and
were made in accordance with NASDAQ Listing Rule 5635(c)(4).
Canaccord Genuity is serving as financial advisor and Morgan,
Lewis & Bockius LLP is serving as legal counsel to MeetMe.
Webcast and Conference Call Details
Management will host a webcast and conference call today, March
6, 2017 at 4:30 p.m. Eastern time to discuss the acquisition. To
access the call dial 888-337-8202 (US and Canada) (+1 913-312-1450
outside the United States and Canada) and when prompted provide the
participant passcode 1061836 to the operator. In addition, a
webcast of the conference call will be available live on the
Investor Relations section of the Company’s website at
www.meetmecorp.com and a replay of the webcast will be available
for 90 days.
About MeetMe
Through its portfolio of brands, MeetMe (NASDAQ: MEET) is
meeting the universal need for human connection. Using innovative
products and sophisticated data science, MeetMe keeps its
approximately two million daily active users engaged and originates
untold numbers of casual chats, friendships, dates, and marriages.
MeetMe offers advertisers the opportunity to reach customers on a
global scale with hundreds of millions of daily mobile ad
impressions. MeetMe utilizes high user density, economies of scale,
and leading monetization strategies to maximize EBITDA. MeetMe’s
apps are available
on iPhone, iPad, and Android in multiple
languages worldwide. For more information, please
visit meetmecorp.com.
About If(we), Inc.
if(we) operates the leading social platforms Tagged and hi5 with
over five million total monthly active users worldwide. if(we) is
continually developing new social applications to help realize its
vision of enabling meaningful connections.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including whether the if(we) acquisition will
provide greater scale for monetization and increased profitability
for the combined company; whether mobile MAU for the combined
company will be 10.6 million; whether if(we) will contribute
approximately $9.0 million in adjusted EBITDA and be accretive to
earnings in the first twelve months following the closing of the
if(we) acquisition; whether and when the if(we) acquisition will
close; whether DAU for the combined company will be 2.8 million;
whether mobile chats sent per day for the combined company will be
65.3 million; whether mobile new users per day for the combined
company will be 130,000; whether the combined company will have
nearly 1.1 million US mobile DAU; whether the if(we) acquisition
will provide significantly increased scale in user base and provide
stronger operating leverage; whether the if(we) acquisition
provides a clear pathway to $150 million in annualized revenue with
adjusted EBITDA of $50 million for the combined company; whether
if(we) mobile apps will continue to see significant revenue growth
in 2017; whether Tagged and hi5 will remain separate brands and
stand-alone mobile applications following the closing; whether
if(we) headquarters will remain in San Francisco following the
closing; whether the if(we) acquisition will generate additional
free cash flow for MeetMe in the first twelve months following
closing and how MeetMe will fund the acquisition of if(we). All
statements other than statements of historical facts contained
herein are forward-looking statements. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “project,” “is likely,” “expect”
and similar expressions, as they relate to us, are intended to
identify forward-looking statements. We have based these
forward-looking statements largely on our current expectations and
projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy and financial needs. Important factors that could
cause actual results to differ from those in the forward-looking
statements include the risk that our applications will not function
easily or otherwise as anticipated, the risk that we will not
launch additional features and upgrades as anticipated, any changes
in popular mobile operating systems that degrade our mobile
applications’ functionality and other unexpected issues which could
adversely affect usage on mobile devices. Further information on
our risk factors is contained in our filings with the Securities
and Exchange Commission (“SEC”), including the Form 10-K for the
year ended December 31, 2015, the Form 10-Q for the quarter ended
June 30, 2016 and the Current Reports on Form 8-K filed on October
4, 2016 and March 6, 2017. Any forward-looking statement made by us
herein speaks only as of the date on which it is made. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all of
them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics
(including MAU, DAU, chats per day, and new users per day) to
include mobile app traffic for all properties and mobile web
traffic for MeetMe and Skout.
This press release includes a discussion of Adjusted EBITDA from
continuing operations which is a non-GAAP financial measure. For
completed fiscal periods, reconciliations to the most directly
comparable GAAP financial measures are provided in the Investors
section of our corporate website, www.meetmecorp.com.
The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation,
warrant obligations, non-recurring acquisition, restructuring or
other expenses, gain or loss on cumulative foreign currency
translation adjustment, gain on sale of asset, bad debt expense
outside the normal range, and goodwill and long-lived asset
impairment charges. The Company excludes stock based compensation
because it is noncash in nature.
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version on businesswire.com: http://www.businesswire.com/news/home/20170306006258/en/
MEET Investor Contact:MKR Group Inc.Todd
Kehrlimeet@mkr-group.com
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