Emerge Commerce completes Viral Loops acquisition

Executive Summary

• Emerge Commerce Ltd. has completed the acquisition of substantially all assets and specified liabilities of Viral Loops from Wishpond Technologies Ltd., marking the launch of its new B2B vertical.
• The transaction was financed entirely from proceeds of a recent private placement, with total cash consideration of $2.3 million ($2.1 million at closing and $200,000 deferred).
• Viral Loops is a highly profitable, asset-light B2B referral marketing platform with an 86% gross margin, expected to be immediately accretive to Emerge’s earnings and cash flow, increasing pro forma 2025 adjusted EBITDA by approximately 52%.

Key Details

• Transaction Structure: Acquisition of substantially all assets and specified liabilities of Viral Loops from Wishpond Technologies Ltd.
• Consideration:
  • Cash paid at closing: $2.1 million.
  • Deferred cash consideration: $200,000 payable at the one-year anniversary via a promissory note.
  • Total cash consideration: $2.3 million (subject to closing adjustments).
• Valuation: Purchase price equates to approximately 2.9 times Viral Loops' 2025 adjusted EBITDA.
• Viral Loops Financials (Year ended Dec. 31, 2025, unaudited):
  • Revenue: $1.3 million.
  • Gross Margins: ~86%.
  • Adjusted EBITDA: $800,000 (~62% margin).
  • Total Assets (at Dec. 31, 2025): ~$1.2 million.
  • Deferred Revenue Liability Assumed: ~$82,000 (USD).
• Strategic Rationale & Synergies:
  • Viral Loops is Emerge’s first acquisition under its newly formed Emerge B2B vertical.
  • Technology expected to be deployed across Emerge’s D2C grocery and golf verticals to drive customer acquisition.
  • Expected to reduce seasonality and improve earnings stability due to recurring revenue model.
  • Return on Invested Capital (ROIC) expected to exceed 25% in Year 1.
• Financial Impact on Emerge:
  • Transaction is immediately accretive to earnings and cash flow.
  • Pro forma 2025 adjusted EBITDA would have been $2.2 million (a ~52% increase over reported 2025 adjusted EBITDA).
  • Enhances consolidated gross margin profile (Viral Loops 86% vs. Emerge’s reported average of 36% YTD 2025).
• Financing: Acquisition financed entirely from proceeds of Emerge’s recently completed private placement.
• Regulatory: TSX Venture Exchange approval received; transaction constituted an expedited acquisition under Policy 5.3.
• No Finders' Fees: Paid in connection with the transaction.
• Operations: Viral Loops will maintain its team, brand, website, and client relationships under Emerge.

Notable Quotes

• "On behalf of the Emerge family, I would like to extend a warm welcome to the talented team at Viral Loops and their hundreds of international B2B [business-to-business] customers. At approximately 2.9 times adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], we believe this acquisition reflects disciplined capital allocation with compelling returns, particularly for a cash-flow-generating technology business. Beyond the financial benefits, the Viral Loops platform provides a powerful tool to help drive referral-driven customer acquisition for our D2C [direct-to-consumer] brands while enhancing the quality and durability of Emerge's earnings and cash flow." — Ghassan Halazon, Founder and CEO of Emerge