EMERGE Signs Definitive Agreement to Acquire Viral Loops, a Profitable B2B Referral Marketing Platform, Announces $1.8M Private Placement
EMERGE Signs Definitive Agreement to Acquire Viral Loops, a Profitable B2B Referral Marketing Platform, Announces $1.8M Private Placement |
| [19-February-2026] |
Transaction Expected to be Immediately Accretive to Earnings and Cash Flow
TORONTO, Feb. 19, 2026 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE" or the "Company"), a portfolio of premium e-commerce brands and technologies, is pleased to announce the signing of a definitive agreement dated effective February 19, 2026, through its wholly owned subsidiary, Emerge Brands Inc. to acquire substantially all assets of Viral Loops and specified liabilities from Wishpond Technologies Ltd. (the 'Seller") (the "Transaction"). Founded in 2016, Viral Loops is a highly profitable, B2B referral marketing platform that enables businesses to design and manage subscription-based referral programs that drive word-of-mouth, increase retention, and reduce customer acquisition costs. Viral Loops operates an asset-light, recurring revenue model with high gross margins and strong cash flow conversion. The business serves a diversified base of global B2B customers. For the year ended December 31, 2025, Viral Loops generated CA$1.3M in revenue, with gross margins of ~86%, and Adj. EBITDA(1) of CA$800K (~62% Adj. EBITDA(1) margin), based on unaudited results. Viral Loops will continue to maintain its team, brand, website and its hundreds of client relationships under EMERGE. Strategic and Financial Rationale Viral Loops is EMERGE's first acquisition under its newly formed, EMERGE B2B vertical, designed to complement and strengthen the Company's overall portfolio:
Transaction Overview Pursuant to the Agreement and in consideration for the Transaction, EMERGE has agreed to pay to the Seller, cash consideration of $2.1M on closing of the Transaction ("Closing"), subject to certain closing adjustments, and $200K in deferred cash consideration at the 1-year anniversary. The purchase price equates to a ~2.9x 2025 Adj. EBITDA(1) multiple. At December 31, 2025, Viral Loops had total assets of approximately $1.2M. The Company is also assuming deferred revenue liability estimated to be approximately US$100K at Closing. Subject to the satisfaction of all conditions precedent to the completion of the Transaction, including receipt of TSXV approval, Closing is expected to occur prior to March 30, 2026 or such other date as EMERGE and the Seller may mutually agree. The Transaction constituted an Expedited Acquisition in accordance with Policy 5.3 of the TSX Venture Exchange; however, remains subject to the approval of the TSX Venture Exchange as of the date of this news release. No finder's fees are expected to be paid in connection with the Transaction. Go Forward Business Following the Transaction, EMERGE will have 5 brands across 3 verticals. The D2C business will include the Grocery and Golf verticals, while EMERGE B2B will include Viral Loops. Ghassan Halazon, EMERGE founder and CEO, commented, "Viral Loops is precisely the type of high-margin, recurring revenue business we aim to acquire — profitable, cash-flow generative, and strategically complementary to our portfolio. At ~2.9x Adj. EBITDA, we believe this transaction reflects disciplined capital allocation with compelling immediate returns. We are impressed with the lean team running the business and their tech-forward AI roadmap that we believe has the potential to both take Viral Loops to the next level, as well as super-charge the overall EMERGE portfolio." Private Placement The Company is pleased to announce a non-brokered private placement financing (the "Offering") of 18,000,000 units of the Company ("Units") at a price of C$0.10 per Unit for aggregate gross proceeds of C$1,800,000 in all Provinces of Canada. Each Unit consists of one common share in the capital of the Company (the "Shares") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"), with each Warrant exercisable for a period of 24 months from the date of issuance at an exercise price of C$0.15 per Share, subject to the policies of TSX Venture Exchange ("TSXV") in relation to exercise price for warrants for part-and-parcel private placement. The Company intends to allocate the net proceeds of the Offering toward the purchase price associated with the Transaction. The Company intends to satisfy the balance of the consideration with funds on hand. The consideration will not be satisfied with securities of the Company. The closing of the Offering is subject to certain conditions including, but not limited to, the submission of all required forms to the TSXV and the closing of the Offering. The securities of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the securities referenced in this press release, in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Company may pay to any applicable finder a cash commission of up to 6% of the gross proceeds of the Offering and may issue finders' warrants of up to 6% of the Units sold under the Offering, with each broker warrant exercisable to acquire one Share at an exercise price of $0.10, for a period of 24 months from the date of issuance thereof. All securities issued pursuant to the Offering are subject to a statutory hold period of four months from the date of issuance in accordance with applicable securities laws. The Company expects certain related parties as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") to participate in the Offering. Any such resulting related party participation is expected to be exempt from the formal valuation requirement and shareholder approval requirement of MI 61-101 as the fair market value of any Units issued to such persons will not exceed 25% of the Company's market capitalization. Loan Amendment The Company wishes to clarify its news release date February 18, 2026, regarding the credit facility amendment. As disclosed in its previous news release, the amended facility provides for a 20-month extension of the credit facility, bringing its maturity to October 2027. As of the date of this news release, the current outstanding balance of the credit facility is $5.85M. A fee of $58,500 will be paid in cash in connection with the amendment to the credit facility. The amendment remains subject to the approval of the TSXV. The amendment does not preclude the Company from refinancing its credit facility at a cheaper rate, at any time, should it secure more favourable terms. "The acquisition of Viral Loops is expected to substantially enhance EMERGE's profitability and cash flow profile, strengthen the Company's balance sheet, and potentially improve our cost of capital over time," continued Halazon. About EMERGE EMERGE is a portfolio of premium e-commerce brands and technologies. Our subscription, marketplace, and retail businesses provide our members with access to offerings across our grocery and golf verticals. truLOCAL is our flagship Canadian meat and seafood subscription service, connecting local farmers with a health-conscious audience. Our golf vertical includes our discounted tee-times/ experiences brand, UnderPar, and our discounted golf apparel and equipment brands, JustGolfStuff and Tee 2 Green. EMERGE is publicly traded on the TSX Venture Exchange under the symbol "ECOM". Follow EMERGE: 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. Preliminary Unaudited Financial Information The financial and operating results included in this news release are based on preliminary unaudited estimated results which have not yet been finalized. These estimated results are subject to change upon completion of the Q4 2025 financial statements, and the audit of such financial statements and such changes could be material due to, among other things, the completion of EMERGE's financial closing procedures, final adjustments, review by EMERGE's auditors and other developments that may arise between now and the time the financial results are finalized. Accordingly, such estimated results are forward-looking statements (as defined below) within the meaning of applicable securities legislation and are subject to the limitations and risks described under "Forward-Looking Statements" below. Unless otherwise noted, all amounts are in Canadian dollars. (1) Non-GAAP Measures This press release makes reference to certain non-GAAP measures. These non-GAAP measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of the Company reported under IFRS. Adjusted EBITDA should not be construed as alternative to net income/loss determined in accordance with IFRS. Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Adjusted EBITDA as defined by management means earnings before interest and financing costs, income taxes, depreciation and amortization, transaction costs, foreign exchange gains/losses, discontinued operations, unrealized gains/losses on contingent consideration and share-based compensation. Management believes that Adjusted EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions. A reconciliation of the adjusted measures is included in the Company's management discussion & analysis for the three months ended June 30, 2025 in the section "Non-GAAP Financial Measures" available through SEDAR at www.sedar.com. Notice regarding forward-looking statements This press release may contain 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 and the timing thereof, the satisfaction of all conditions precedent to the closing of the Transaction, including, without limitation, TSXV approval in respect of the Transaction, any benefit that may be derived by the Company from the Transaction, including, without limitation, any material benefit to the working capital or financial position of the Company as a result of the Transaction, expectations regarding cash flow both as a result of the Transaction and in general, 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 be completed 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, cash flow, and working capital of the Company, the ability of the Company to obtain TSXV approval for the Transaction and the satisfaction of any other conditions thereto, 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 a 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, risks that the TSXV may not approve the Transaction, as well as the risk factors discussed in the Company's MD&A, which is available through SEDAR+ at www.sedarplus.ca. 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. Unless otherwise noted, all amounts are in Canadian dollars. On Behalf of the Board SOURCE Emerge Commerce Ltd. | ||
Company Codes: TorontoVE:ECOM |
