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EX-99.2 - SPARK NETWORKS, INC. CUSTOMER QANDA - SPARK NETWORKS INC | lov_ex992.htm |
8-K - CURRENT REPORT - SPARK NETWORKS INC | lov_8k.htm |
Exhibit 99.1
SPARK NETWORKS AND ELITESINGLES TO MERGE, CREATING A GLOBAL LEADER
IN ONLINE DATING
Brings Together Leading Brands Including JDate, ChristianMingle,
EliteSingles and eDarling
Combined Company Will Be Named Spark Networks SE and Be Listed on
the NYSE MKT
LOS
ANGELES, CA and BERLIN, GERMANY, May 2, 2017 – Spark
Networks, Inc. (“Spark”) (NYSE MKT: LOV) and Affinitas
GmbH (“EliteSingles”), which operates premium online
dating platforms EliteSingles, eDarling and Attractive World, today
announced that they have entered into a definitive agreement to
combine in a stock-for-stock merger, creating one of the
world’s largest online dating providers with a portfolio of
premier global brands. The combination will create a company with
more than $115 million of pro forma combined revenue over the
twelve months ended March 31, 2017 and nearly 500,000 period-ending
global subscribers as of March 31, 2017. (1)
Danny
Rosenthal, Spark’s Chief Executive Officer, commented,
“We are thrilled to be combining with such a natural partner.
The scale, data analytics, and significant operating expertise that
EliteSingles brings will enhance our existing brand portfolio.
Together, we will be a global leader in online dating, with the
opportunity to drive growth across our entire
platform.”
“We
have a clear vision of becoming the global leader in premium dating
and this transaction is an important step towards that goal,”
said Jeronimo Folgueira, Chief Executive Officer of EliteSingles.
“By combining the market leader in religious dating with
EliteSingles’ portfolio of strong brands, we will create a
singular entity, well-positioned to benefit from increased scale
and improved financial strength. Together, we will leverage the
strengths of each company to provide an exceptional user experience
and drive shareholder value.”
Strategic Rationale
●
Increased Scale: With nearly
500,000 period-ending subscribers and over $115 million in revenue
for the twelve months ended March 31, 2017, the combined company
would be one of the world’s largest online dating providers
on a pro forma basis. Spark Networks SE will be well-positioned to
invest in new technologies and leverage both the EliteSingles and
Spark technology platforms to deliver an enhanced customer
experience, increase brand awareness through expanded marketing,
and pursue growth opportunities.
●
Diversified Global Platform:
The transaction brings together Spark’s portfolio of premium
brands – including JDate, JSwipe, and ChristianMingle –
with fast-growing brands EliteSingles, eDarling, and Attractive
World, which collectively grew revenue by more than 20% in 2016.
Together, these brands will cater to a broad spectrum of users with
a presence in 26 countries, creating a more diverse and balanced
footprint. On a combined basis, North America represented 40% of
the pro forma 2016 revenue, with the remaining 60% generated from
international markets, including France, U.K., Australia and
Israel.
●
Attractive Financial Position:
(1) On a
projected 2018 basis, the combined company is expected to generate
between $118 – $122 million in revenue and between $18
– $22 million in Adjusted EBITDA, driven by incremental
revenue growth and identified cost savings.
(1)
Financials are pro
forma and unaudited
Transaction Details
EliteSingles
shareholders will own approximately 75% of the combined company and
Spark shareholders will own approximately 25%. The new public
entity is expected to be listed on the NYSE MKT exchange through an
American Depositary Receipt (“ADR”).
The
transaction has been approved by Spark’s Board of Directors
and is expected to close in the fourth quarter of 2017, subject to
Spark shareholder approval, and the satisfaction of certain other
customary closing conditions. Shareholders representing
approximately 35% of the outstanding Spark shares have agreed to
vote their shares in favor of the transaction.
Governance and Structure
The
combined company will be organized as a European company. The
combined company will be named Spark Networks SE and will be
headquartered in Berlin, Germany and maintain a significant U.S.
presence with offices in New York City and Lehi, Utah. Jeronimo
Folgueira, CEO of EliteSingles, will serve as Chief Executive
Officer and Robert O’Hare, Spark’s Chief Financial
Officer, will continue in that role with the combined company.
Michael Schrezenmaier, Managing Director of EliteSingles, will
become Chief Operating Officer.
The
Board of Directors will be comprised of seven directors, including
three to be selected by EliteSingles, one to be selected by Spark,
and three to be mutually agreed upon by EliteSingles and
Spark.
Conference Call
Spark
and EliteSingles will host a conference call at 7:30 AM Pacific
Time tomorrow (10:30 AM Eastern Time), May 3, 2017, to discuss the
transaction. Following the prepared remarks, the call will include
a question-and-answer session.
Toll-Free
(United States): 1-877-705-6003
International: 1-201-493-6725
Spark
will also host a webcast of the call, which will be accessible in
the Investor Relations section of Spark’s website at
http://investor.spark.net.
A
replay will be available from approximately three hours after
completion of the call.
Replay:
Toll-Free
(United States): 1-844-512-2921
International:
1-412-317-6671
Passcode:
13660277
Non-GAAP Financial Metrics
Adjusted EBITDA guidance for 2018 for the combined company does not
include certain charges and costs. The adjustments to EBITDA in
future periods are generally expected to be similar to the kinds of
charges and costs excluded from Adjusted EBITDA in prior quarters,
such as (i) non-cash items such as stock-based compensation,
asset impairments, non-cash currency translation adjustments
related to an inter-company loan and (ii) one-time items that have
not occurred in the past two years and are not expected to recur in
the next two years. The exclusion of
these charges and costs in future periods will have a significant
impact on the combined company's Adjusted EBITDA. Spark and
EliteSingles are not able to provide a reconciliation of the
combined company's non-GAAP financial guidance to the corresponding
U.S. GAAP measure without unreasonable effort because of the
uncertainty and variability of the nature and amount of these
future charges and costs.
Forward-Looking Statements
This
document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact are
forward-looking statements. These forward-looking statements
involve known and unknown risks, uncertainties, and other factors
that may cause Spark’s or EliteSingles’ or the combined
company’s performance or achievements to be materially
different from those of any expected future results, performance,
or achievements. Forward-looking statements speak only as of the
date they are made, and neither Spark nor EliteSingles assumes any
duty to update forward-looking statements. We caution readers that
a number of important factors could cause actual results to differ
materially from those expressed in, or implied or projected by,
such forward-looking statements. Such forward-looking statements
include, but are not limited to, statements about the benefits of
the business combination to the existing brand portfolio,
statements about the ability to drive superior growth or achieve
cost savings, statements about becoming the global leader in
premium dating, statements about the ability to leverage strengths
of each company to provide exceptional user experience and drive
shareholder value, statements about the expected size of the
combined company, statements about the projected financial results
of the combined company for 2018, statements about the combined
company’s plans, objectives, expectations and intentions and
other statements that are not historical facts. The following
factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: (i) the
possibility that the proposed transaction does not close when
expected or at all because required shareholder or other approvals
and other conditions to closing are not received or satisfied on a
timely basis or at all. (ii) changes in Spark’s share price
before closing, including as a result of the financial performance
of EliteSingles prior to closing, or more generally due to broader
stock market movements, and the performance of peer group
companies. (iii) the risk that the benefits from the transaction
may not be fully realized or may take longer to realize than
expected, including as a result of changes in general economic and
market conditions, interest and exchange rates, monetary policy,
laws and regulations and their enforcement, and the degree of
competition in the geographic and business areas in which Spark and
EliteSingles operate. (iv) the ability to promptly and effectively
integrate the businesses of Spark and EliteSingles. (v) the
reaction to the transaction of the companies’ customers,
employees and counterparties. (vi) diversion of management time on
merger-related issues. (vii) lower-than-expected revenues, credit
quality deterioration or a reduction in net earnings. and (viii)
other risks that are described in Spark’s public filings with
the SEC. For more information, see the risk factors described in
Spark’s Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and other filings with the SEC.
How to Find Further Information
This
communication does not constitute an offer to sell or a
solicitation of an offer to sell or a solicitation of an offer to
buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction 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, and otherwise in accordance
with applicable law. This communication is being made in respect of
the proposed business combination transaction between Spark and
EliteSingles. The proposed transaction will be submitted to the
shareholders of Spark for their consideration. In connection with
the proposed transaction, Spark Networks SE will file with the SEC
a registration statement on Form F-4 that will include the proxy
statement of Spark that also constitutes a prospectus of Spark.
After the registration statement has been declared effective by the
SEC, a definitive proxy statement/prospectus will be mailed to each
Spark stockholder entitled to vote at Spark’s stockholder
meeting. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
AND ANY OTHER DOCUMENTS RELATING TO THE TRANSACTION FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors may obtain copies of the proxy
statement/prospectus (when available) and all other documents filed
with the SEC regarding the proposed transaction, free of charge, at
the SEC’s website (http://www.sec.gov). Investors may also
obtain these documents, free of charge, from Spark’s website
(www.spark.net)
under the link “Investor Relations” and then under the
tab “SEC Filings” or by directing request to
investor@spark.net.
Participants in Solicitation
Spark
and its directors, executive officers and other members of
management and employees may be deemed to be
“participants” in the solicitation of proxies from
Spark’s stockholders in connection with the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of
Spark’s stockholders in connection with the proposed
transaction and a description of their direct and indirect
interest, by security holdings or otherwise, will be set forth in
the proxy statement/prospectus filed with the SEC in connection
with the proposed transaction. You can find information about
Spark’s executive officers and directors in its definitive
proxy statement filed with the SEC on March 31, 2017 and in its
Annual Report on Form 10-K filed with the SEC on March 22, 2017.
You can also obtain free copies of these documents from Spark using
the contact information above.
About Spark Networks, Inc.
The
Spark Networks portfolio of consumer Web sites includes, among
others, JDate®.com (www.jdate.com), ChristianMingle®.com
(www.christianmingle.com), JSwipe (www.jswipeapp.com), CROSSPATHS
(www.crosspathsapp.com), Spark®.com (www.spark.com),
BlackSingles.com® (www.blacksingles.com), and
SilverSingles®.com (www.silversingles.com).
About Affinitas GmbH
Affinitas
is the European dating company behind leading premium brands
EliteSingles (www.elitesingles.com), Attractive World
(www.attractiveworld.net) and eDarling (www.edarling.de), designed
for singles seeking a serious relationship. Founded in 2008, the
company has since become one of the world's leading enterprises in
premium online dating, with a presence in 26 active markets
worldwide.
SPARK CONTACTS
Media:
Bryan
Locke/Mike DeGraff
Sard
Verbinnen & Co.
(312)
895-4700
|
Investors:
Robert
O’Hare
(310)
893-0550
rohare@spark.net
|
ELITESINGLES CONTACT
Media:
Claudia
Fellerman
+49 176
2812 8353
claudia.fellerman@affinitas.de
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