Strong and profitable company takes logical
next step to accelerate growth into $260 billion market
- Unrivaled Market Leader. PayLink Direct, an industry
leading payment services provider that currently has the largest
market share, and Olive.com, a leading digital vehicle protection
plan platform, will become public as Olive Ventures Holdings, Inc.
The company will be known as Olive.com, the name of the existing
digital platform.
- High-Growth Digital Platform with Highly Profitable Payments
Services Division. Olive.com has grown rapidly with 144.5%
growth in net premium over the last four quarters, and PayLink
Direct has a 15-year track record of profitability. The combined
business generated 2020 Adjusted EBITDA of $35.5 million and net
income of $13.5 million.
- $260 Billion and Growing Total Addressable Market (TAM)
Opportunity. Megatrends of extended auto ownership before,
during and coming out of the pandemic provide strong tailwinds to
Olive.com.
- Strong Investor Base with Aligned Interests. Early
PayLink Direct and Olive.com investors, affiliates of funds managed
by affiliates of Fortress Investment Group and Milestone Partners,
to rollover 100% of their common equity interests into the new
public company. MDH Acquisition Corp.’s (“MDH”) sponsor will tie a
substantial portion of its economic interests to Olive.com’s future
performance.
- Old Republic Insurance and Ally Financial Inc. join as
strategic partners.
- MDH Executive Chairman Franklin McLarty to become Chairman
of Olive.com.
PayLink Direct and Olive.com, affiliated businesses and leaders
in payment services and online vehicle protection plans, today
announced that they will go public in a business combination with
MDH Acquisition Corp. (NYSE: MDH).
The new public company, Olive.com, will be a combination of two
proven growth platforms: Olive.com’s current digital vehicle
protection plan platform and PayLink Direct’s current industry
leading payment services operation. PayLink Direct, founded in 2006
by CEO Rebecca Howard, has a 15-year track record of profitability
and will become a division of Olive.com. The company continues to
grow with over 345,000 new customers on the combined platform in
2020 and expects to have approximately 850,000 new customers by
2023.
Upon completion of the business combination, CEO Rebecca Howard
will become CEO of the new public company and MDH’s Executive
Chairman, Franklin McLarty, a proven business builder with deep
experience in the automotive and transportation sectors, will
become its Chairman. Upon the close of the proposed transaction,
the combined company will be named Olive Ventures Holdings, Inc.
and be called Olive.com. It will be listed on the NYSE under the
ticker symbol “OLV.”
With a heritage rooted in America’s Heartland, Olive.com will
serve the vehicle protection plan needs of customers across the
U.S. and Canada. This proposed transaction represents the logical
next step in Olive.com’s growth journey, providing access to
capital to fuel growth, increase long-term profitability and extend
its leadership in the payment services and vehicle protection
market.
The proposed transaction values Olive.com at an initial
pro-forma enterprise value of approximately $960 million. Following
the completion of the business combination, the cash in trust and
the investment from PIPE investors will allow Olive.com to expand
and continue to deliver its product offerings to a growing $260
billion addressable market -- including 280 million total cars on
the road today, 87 million of which are between 6-12 years old.
Research shows that the average age of a car on the road hit a
record high of 12.1 years during the pandemic, with 25% of cars
aged 16 years or older. This trend is expected to continue, and an
increasingly aged fleet will drive the need for vehicle service and
mechanical breakdown coverage. Olive.com provides an essential
product for consumers at a time when at least 33% of car owners
could not afford $500 to $600 in automotive repairs and 60% would
have difficulty covering a $1,000 repair expense.
Strong Investor Alignment of Interests. Olive.com has a
strong base of strategic investor support. Both MDH Acquisition
Corp. and the strategic investors leading this transaction are
strong believers in the significant future growth potential of
Olive.com and have taken action to ensure their interests are fully
aligned with future shareholders. Olive.com is backed by proven
strategic investors including investment funds managed by
affiliates of Fortress Investment Group and Milestone
Partners. These investors believe in Olive.com’s strong growth
potential and therefore have agreed to roll forward 100% of their
current common equity interests into the new public company. To
demonstrate its long-term commitment to generating strong growth at
Olive.com, MDH’s sponsor has also committed to tie a
substantial portion of its equity interests to an earnout based on
Olive.com’s performance. In addition, Old Republic Insurance
and Ally Financial have become strategic partners because
they have a strong belief in Olive.com’s growth thesis.
Rebecca Howard, Founder and CEO of Olive.com, said, “We
are excited about the next phase of our growth journey and could
not have found a better suited partner for this public company
journey than the exceptional MDH team. We will continue our
relentless focus on reaching consumers on their terms, and on
serving vehicle owners and our valued business to business clients
across the U.S. and Canada with our industry leading sales,
marketing and payment solutions. We are growing our business by
putting the needs of consumers first and empowering them to find
affordable, transparent and user-friendly solutions for vehicle
protection plans. I am so honored to lead our team of dedicated
professionals who are deeply committed to our values and mission to
help consumers find the solutions they need.”
Franklin McLarty, Executive Chairman of MDH Acquisition
Corp., said, “Earlier this year, we set out to find a
profitable company in the U.S. Heartland that had unrecognized
value, with room to grow, a world-class management team and
leadership in a sector where MDH has deep expertise and
relationships. We found each of these attributes in Olive.com.
Rebecca and her team have brought a highly differentiated offering
to market and have already achieved tremendous success. The team
has a significant addressable market and a material opportunity to
more efficiently consolidate and service the space for years to
come given the market megatrends. Olive.com operates in the
automotive industry, an industry where my family has over 100 years
of proven leadership experience, and we look forward to leveraging
our knowledge and business expertise to support Olive.com’s
continued growth. I’m honored to become Chairman of this exciting
growth company.”
David King, Managing Director at Fortress Investment
Group, said, “Fortress very early on recognized this company’s
disruptive potential and powerful consumer value proposition. We’ve
been proud to partner with Olive.com as they have become the
unrivaled market leader, and we are strong believers in the
company’s future growth potential and investment thesis.”
Adam Curtin, Partner at Milestone Partners, said,
“Milestone is very excited to continue its partnership with
management and Fortress in backing Olive.com during this next phase
of growth. Since our initial investment in 2014, we have valued and
supported Rebecca’s vision for the business and entrepreneurial
tenacity in providing consumers with best-in-class vehicle
protection, affordable payment plans and excellent customer
service, all made possible by Olive.com’s proprietary technology.
We are pleased to add MDH, Old Republic and Ally Financial to the
Olive.com family.”
Craig R. Smiddy, President & CEO at Old Republic,
said, “Old Republic Insured Automotive Services is a market leader
in the vehicle service industry. With almost 30 years of
experience, we recognize that Rebecca and her team have created
powerful and differentiated capabilities that complement our
platform. We look forward to strengthening this relationship as we
continue to pursue our growth strategy.”
About Olive.com:
Olive.com, the leader in payment services and online vehicle
protection plans, was built to give customers peace of mind.
Vehicle protection plans cover mechanical failure of the vehicle
after the manufacturer’s warranty has expired. Olive.com’s digital
platform has created a wave of new consumer buyers to the vehicle
protection plan market with over 59% of its customers being first
time buyers. Consumers are now able to buy a vehicle protection
plan, on their own terms and in the comfort of their home through
Olive.com. This digital platform lets consumers buy direct, with no
pressure, the way they want to buy, giving them an assortment of
coverage and deductible options that are convenient and fit their
budget. Olive.com provides consumers products that are
approachable, affordable, transparent and user-friendly – real
choice, all digital at any time day or night.
As a customer-informed product provider, Olive.com seeks to
offer the best coverage for car owners. Olive.com’s products,
customer service, and reputation for excellence have earned it an
A+ rating with the Better Business Bureau (BBB) and partnerships
with leading insurance companies and globally recognized brands.
With no inspection or waiting period, and plans for every budget,
Olive.com is in the business of helping people live life covered.
PayLink Direct, the payment services division of Olive.com, is one
of the largest financial service providers of payment plan programs
and transaction processing. It is a leading financial services
company that specializes in providing interest-free payment plans
for the purchase of service contracts for vehicles, RVs, homes,
commercial trucks and other products. Since the company’s inception
in 2006, PayLink’s high performing infrastructure has processed
four million service contracts and originated $11 billion in
receivables.
A must-have product for consumers. Vehicle protection
plans are no longer a nice-to-have; they are a must-have.
Thirty-three percent of adults cannot afford $500 to $600 in
automotive repairs and 60% would have difficulty covering a $1,000
expense. When consumers pay for vehicle protection plans at the
dealer, they pay retail rates. Olive.com is addressing the vehicle
protection market through payment services and its
consumer-friendly digital platform. The company combines a
profitable payment services platform with a next generation digital
platform to sell and tailor vehicle protection plans in a way that
resonates with today’s consumer preferences.
Large, underserved and growing market. The company
operates in a significantly underserved market, and there is room
to grow. An increasingly aged fleet will drive the need for vehicle
protection plans. Today in the U.S., there are approximately 280
million vehicles in operation. Consumers are keeping cars longer,
while repair costs keep growing. Olive.com’s sweet spot is vehicles
between 6-12 years old, which corresponds with the average 7-year
ownership of cars in the United States. That number alone amounts
to 31% -- or 87 million vehicles, and management estimates less
than 10% of those 87 million car owners have coverage. Olive.com
has a TAM of $260 billion, and this addressable market is
growing.
About MDH Acquisition Corp.:
MDH Acquisition Corp. (NYSE: MDH) was formed with the goal of
accelerating the growth of a private company that is well
capitalized, profitable and ready to become a publicly traded
company. MDH focuses on industries that complement the management
team’s background and proven business-building abilities. Given the
operational experience of the management team, MDH focuses
geographically, by pursuing opportunities located in the U.S.
Heartland. MDH is led by Executive Chairman Franklin McLarty, Vice
Chairman Jim Wilkinson, CEO Beau Blair and CFO Brent
Whittington.
Transaction Summary:
On July 21, 2021, MDH entered into a definitive agreement to
combine with Olive.com. The business combination values Olive.com
at a pro forma enterprise value of approximately $960 million,
which represents approximately 2.3x 2023 estimated revenue and 6.4x
2023 estimated Adjusted EBITDA. A total of up to approximately $291
million in proceeds from MDH’s trust account, including $15 million
in PIPE investment, will be used, among other things, to pay down
certain existing debt of PayLink Direct and Olive.com, redeem
preferred units, purchase common stock of the new public company,
pay transaction expenses and to capitalize the new public company’s
balance sheet.
Existing shareholders of PayLink Direct and Olive.com are
expected to own approximately 74% of the equity of the new combined
company following the consummation of the proposed business
combination.
The transaction, which has been unanimously approved by the
Boards of Directors of PayLink Direct, Olive.com and MDH, is
subject to approval by MDH's stockholders and other customary
closing conditions.
Additional information about the proposed transaction, including
a copy of the business combination agreement and investor
presentation, will be provided in a Current Report on Form 8-K to
be filed by MDH with the Securities and Exchange Commission (the
“SEC”) and available at www.sec.gov.
Advisors:
Oppenheimer & Co. Inc. is serving as financial advisor to
Olive.com. Keefe, Bruyette & Woods, Inc. (“KBW”) is serving as
financial advisor to MDH.
Oppenheimer & Co. Inc. and KBW are serving as placement
agents on the PIPE.
Stifel, Nicolaus & Company, Incorporated ("Stifel") and KBW
are acting as capital markets advisors to MDH.
Shearman & Sterling LLP is acting as legal advisor to MDH.
Kirkland & Ellis LLP is acting as legal advisor to
Olive.com.
Stifel and Oppenheimer & Co. Inc. acted as joint bookrunning
managers for MDH’s initial public offering.
Investor Presentation:
Olive.com CEO Rebecca Howard, Olive.com President and COO Justin
Thomas and MDH Executive Chairman Franklin McLarty have posted an
investor presentation and recorded investor overview which can be
found on the investor relations website at www.olive.com as well as
on MDH Acquisition Corp.'s website at
https://www.mclartydiversified.com. A copy of the investor
presentation and transcript of overview will also be filed by MDH
with the SEC as exhibits to Form 8-K.
Non-GAAP Financial Measures:
This press release includes certain non-GAAP financial measures,
including Adjusted EBITDA. EBITDA is defined as net income plus
interest expense, income tax expense, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA and certain
adjustments, plus onetime non-recurring items. These financial
measures are not prepared in accordance with accounting principles
generally accepted in the United States and may be different from
non-GAAP financial measures used by other companies. MDH and
Olive.com believe that the use of these non-GAAP financial measures
provides an additional tool for investors to use in evaluating
ongoing operating results and trends. These non-GAAP measures with
comparable names should not be considered in isolation from, or as
an alternative to, financial measures determined in accordance with
GAAP. For more information and a reconciliation of Adjusted EBITDA
to the most directly comparable measure calculated in accordance
with GAAP, please refer to the investor presentation filed by MDH
with the SEC as an exhibit to Form 8-K.
Forward-Looking Statements:
Certain statements made in this press release, and oral
statements made from time to time by representatives of MDH and
Olive.com, are “forward-looking statements” within the meaning of
the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Statements regarding the potential
combination and expectations regarding the combined business are
forward-looking statements. In addition, words such as “estimates,”
“projects,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,”
“future,” “propose,” “target,” “goal,” “objective,” “outlook” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
the control of the parties, that could cause actual results or
outcomes to differ materially from those discussed in the
forward-looking statements.
In addition to factors previously disclosed in MDH’s reports
filed with the SEC, including its registration statement on Form
S-1 filed in connection with its initial public offering, and those
identified elsewhere in this communication, important factors that
could cause actual results and outcomes to differ materially from
those indicated in the forward-looking statements include, among
others, the following: (i) the inability of the parties to complete
the contemplated transactions involving MDH and Olive.com (the
“Business Combination”) on the anticipated timeframe or at all;
(ii) the outcome of any legal proceedings that may be instituted
against MDH or Olive.com following the announcement of the
agreement and plan of merger for the Business Combination (the
"Merger Agreement"); (iii) the risk that requisite regulatory,
corporate and other approvals, including the approval of MDH
stockholders, and consents for the Business Combination are not
obtained or are delayed; (iv) the inability to recognize the
anticipated benefits of the proposed Business Combination; (v)
unexpected costs resulting from the Business Combination; (vi)
changes in general economic conditions, including as a result of
the COVID-19 pandemic; (vii) regulatory conditions and
developments; (viii) changes in applicable laws or regulations; and
(ix) other risks and uncertainties indicated from time to time in
the Registration Statement (as defined below) relating to the
Business Combination, including those under "Risk Factors" therein,
and in MDH’s other filings with the SEC. The foregoing list of
factors is not exclusive. Forward-looking statements speak only as
of the date they are made, and neither Olive.com nor MDH undertakes
any obligation, and expressly disclaims any obligation, to update,
alter or otherwise revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. Readers should carefully review the statements
set forth in the reports, which MDH has filed or will file from
time to time with the SEC.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction. This press release shall
also not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Additional Information:
In connection with the proposed business combination, PayLink
Holdings, Inc.’s wholly owned subsidiary, Olive Ventures Holdings,
Inc. (“PubCo”) intends to file with the Securities and Exchange
Commission (the “SEC”) a Registration Statement on Form S-4 (the
“Registration Statement”), which will include a proxy
statement/prospectus, and certain other related documents, which
will be both the proxy statement to be distributed to holders of
shares of MDH’s common stock in connection with its solicitation of
proxies for the vote by MDH’s stockholders with respect to the
proposed business combination and other matters as may be described
in the Registration Statement, as well as the prospectus relating
to the offer and sale of the securities of PubCo to be issued in
the business combination. MDH’s stockholders and other interested
persons are advised to read, when available, the preliminary proxy
statement/prospectus included in the Registration Statement and the
amendments thereto and the definitive proxy statement/prospectus,
as these materials will contain important information about the
parties to the Merger Agreement, MDH and the Business Combination.
After the Registration Statement is declared effective, the
definitive proxy statement/prospectus will be mailed to
stockholders of MDH as of a record date established for voting on
the Business Combination and other matters as may be described in
the Registration Statement. Stockholders will also be able to
obtain copies of the proxy statement/prospectus and other documents
filed with the SEC that will be incorporated by reference in the
proxy statement/prospectus, without charge, once available, at the
SEC’s web site at www.sec.gov, or by directing a request to: MDH
Acquisition Corp, 600 N. Carroll Ave., Suite 100, Southlake, TX
76092, Attention: Chief Executive Officer.
Participants in the Solicitation:
MDH, PubCo., Olive.com, PayLink Direct and their respective
directors and executive officers may be deemed participants in the
solicitation of proxies from MDH’s stockholders with respect to the
business combination. A list of the names of those directors and
executive officers and a description of their interests in MDH are
contained in MDH’s final prospectus dated February 1, 2021 relating
to its initial public offering and in MDH’s subsequent filings with
the SEC, and are available free of charge at the SEC’s web site at
www.sec.gov, or by directing a request to: MDH Acquisition Corp,
600 N. Carroll Ave., Suite 100, Southlake, TX 76092, Attention:
Chief Executive Officer. Additional information regarding the
interests of such participants will be contained in the proxy
statement/prospectus for the proposed business combination when
available.
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version on businesswire.com: https://www.businesswire.com/news/home/20210721005935/en/
Media: Kelly Wallace press@olive.com 917-991-6308
Investor Relations: investors@olive.com 646-407-2781
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