Troika
Media Group Completes Transformative Acquisition of Converge Direct
LLC
Adding
Approximately $300 Million of Revenue and $21 Million of Net
Income
Combination creates global end-to-end
branding, marketing, digital advertising,
experiential, analytics-as-service (SAS) and
SaaS technology company with an extraordinary base of major
clients
Financial
Highlights:
-
Converge Direct,
LLC and its affiliated businesses (collectively, "Converge")
generated approximately $300 million of revenue, $23 million of
adjusted EBITDA and approximately $21 million of net income for the
year ended December 31, 2021
-
Estimated
combined adjusted EBITDA over $27 million for CY 2022
-
Significantly
accretive to adjusted earnings per share
-
Following the
closing, it is anticipated that the majority of the combined
business' revenue will be recurring
Los Angeles, California—March 22,
2022 -- InvestorsHub NewsWire -- Troika Media
Group, Inc. (Nasdaq:TRKA) ("TMG" or "Company"),
a brand consultancy and marketing
innovations company that provides
integrated branding and
marketing solutions for global
brands today announced that it has completed the Company's
previously-announced definitive purchase agreement to
acquire Converge Direct LLC and its affiliates (collectively,
"Converge"), a
leading digital and offline performance media and marketing
company. This acquisition marks a significant
step forward in TMG's ongoing transformation into a global,
end-to-end brand solutions platform, with significant financial
benefits.
Converge is a leading independent performance marketing and
managed services business. Since its formation in 2006, Converge and its
affiliates have grown to approximately $300 million in annualized
revenue, $23 million in adjusted EBITDA, and
approximately $21 million of net income for the year ending December 31, 2021.
"The addition of Converge
adds a highly complementary, market-leading performance marketing
portfolio to our already strong business, significantly expanding
our scale and reach," said
Robert Machinist, Troika's Chairman
and CEO. "We continue to be
impressed by the depth of talent and value-creation potential of
Converge, and will leverage its extensive network, expertise and
strong customer relationships to offer a wider range of tailored,
innovative solutions to address our clients' digital content, data and digital
media needs. Furthermore, we are
confident that adding Converge to our portfolio, with its
attractive high-growth SaaS
platform, is the best way
to drive continued
long-term growth and accelerate profitability going
forward. This is a very
exciting day for both companies and we welcome Converge people to the TMG team,
and look forward to working together to create more value for our
clients, our people, and our shareholders."
Tom Marianacci,
Converge Founder and CEO, said, "We're extremely proud to
achieve this milestone and begin the next chapter in TMG's growth
story. As a leading digital media and branding services company,
TMG was the perfect match for Converge. Their focus on
building trust and
driving customer and fan engagement with major global brands
combined with our performance-based
marketing, proven technology platforms, and scale will allow us to
combine our capabilities and provide our mutual customers with
greatly expanded and improved offerings."
Converge's
management team have entered into long-term Employment Agreements
and will take an active leadership role in the combined
business. Sid Toama, Chief
Operating Officer of Converge, will join Troika's Board of
Directors, and serve as President of Troika. Tom Marianacci,
Founder and Chief Executive Officer of Converge will remain CEO of
the Converge entities and be a board advisor to Troika. Other
members of Converge's Executive Leadership Team have also entered
into long term employment agreements with
Troika.
Cantor
Fitzgerald & Co. acted as sole debt placement agent to Troika
Media Group in connection with the transaction. Blue Torch Capital, a
direct lender having experience providing bespoke credit solutions,
is the senior secured credit
facility lender to the Company. EF Hutton, a division of Benchmark Investments,
LLC, acted as exclusive placement agent in respect of certain
financing. Davidoff Hutcher &
Citron LLP served as legal counsel to Troika.
About Converge Direct
LLC
Converge Direct, LLC and affiliates is a media
managed-service, performance marketing and customer acquisition
business. The Company provides complementary services such as
advertising strategy and customized advertising campaigns utilizing
their proprietary attribution analytics SaaS technology platform,
HELIX. The Company is headquartered in Bedford Hills, New York with
branch offices in New York, New York and San Diego, California. The
Company serves customers in various end markets: financial
services, consumer products, healthcare & insurance, travel and
leisure, education, media and entertainment, home improvement,
fitness and wellbeing, and legal services.
Visit: www.convergemarketing.com
About Troika Media
Group
Troika Media Group is an end-to-end brand solutions company
that creates both near-term and long-term value for global brands
in entertainment, sports and consumer products. Applying emerging
technology, data science, and world-class creative, TMG helps
brands deepen engagement with audiences and fans throughout the
consumer journey and builds brand equity. Clients include Apple,
Hulu, Riot Games, Belvedere Vodka, Unilever, UFC, Peloton, CNN,
HBO, ESPN, Wynn Resorts and Casinos, Tiffany & Co., IMAX,
Netflix, Sony, Yahoo and Coca-Cola. For more information,
visit www.thetmgrp.com
Forward-Looking
Statements
Certain statements in this press release that are not
historical facts are forward-looking statements that reflect
management's current expectations, assumptions, and estimates of
future performance and economic conditions, and involve risks and
uncertainties that could cause actual results to differ materially
from those anticipated by the statements made herein.
Forward-looking statements are generally identifiable by the use of
forward-looking terminology such as "believe," "expects," "may,"
"looks to," "will," "should," "plan," "intend," "on condition,"
"target," "see," "potential," "estimates," "preliminary," or
"anticipates" or the negative thereof or comparable terminology, or
by discussion of strategy or goals or other future events,
circumstances, or effects. Moreover, forward-looking statements in
this release include, but are not limited to, the impact of the
current COVID-19 pandemic, which may limit access to the Company's
facilities, customers, management, support staff, and professional
advisors, and to develop and deliver advanced voice and data
communications systems, demand for the Company's products and
services, economic conditions in the U.S. and worldwide, and the
Company's ability to recruit and retain management, technical, and
sales personnel. Further information relating to factors that may
impact the Company's results and forward-looking statements are
disclosed in the Company's filings with the SEC. The
forward-looking statements contained in this press release are made
as of the date of this press release, and the Company disclaims any
intention or obligation, other than imposed by law, to update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Contact:
Troika Media
Group
Kevin Aratari
kevin@troikamedia.com
Investor
Relations
TraDigital IR
Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com
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