EMERGE Completes Acquisition of Viral Loops, Launching Profitable B2B Vertical

Executive Summary

• EMERGE Commerce Ltd. completed the acquisition of substantially all assets and specified liabilities of Viral Loops for a cash purchase price of CA$2.3 million (≈ CA$2.1 M cash at closing plus CA$200 K deferred consideration).
• The deal is expected to be immediately accretive, increasing EMERGE’s pro‑forma 2025 Adjusted EBITDA by ~52% to CA$2.2 million and improving gross margin from an average of 36% to 86% for the newly added B2B vertical.
• Funding was sourced entirely from cash proceeds of a recently completed private placement; no external financing or finder's fees were used.

Key Details

• Target Business: Viral Loops – B2B referral marketing platform generating CA$1.3 M revenue, 86% gross margin, and CA$800 K Adjusted EBITDA (≈62% margin) in 2025 (unaudited).
• Purchase Price: Total consideration of CA$2.3 M, representing ~2.9× 2025 Adjusted EBITDA.
• Cash paid at closing: CA$2.1 M.
• Deferred cash consideration: CA$200 K payable on the one‑year anniversary via a promissory note.
• Assumed Liabilities: Deferred revenue liability of approximately US$82 K at closing.
• Asset Basis: Viral Loops held total assets of ~CA$1.2 M as of 31 Dec 2025.
• Funding Source: Entirely from proceeds of EMERGE’s recent private placement; no debt incurred for the transaction.
• Strategic Rationale:
• Adds a high‑margin, asset‑light recurring revenue stream to EMERGE’s portfolio.
• Enables cross‑selling of referral technology across EMERGE’s D2C Grocery and Golf verticals, reducing customer acquisition costs.
• Improves earnings stability and reduces seasonality inherent in consumer‑facing businesses.
• Expected ROIC > 25% in Year 1.
• Pro Forma Impact: Inclusive of Viral Loops, EMERGE’s Adjusted EBITDA for 2025 would have been CA$2.2 M (≈ 52% increase). Gross margin uplift from 36% to 86% on the B2B component.
• Governance & Approvals: All conditions precedent satisfied; TSXV approval obtained. Transaction qualifies as an Expedited Acquisition under TSX Venture Exchange Policy 5.3.
• Management Commentary: CEO Ghassan Halazon highlighted disciplined capital allocation at a ~2.9× EBITDA multiple and the strategic fit of Viral Loops within EMERGE’s B2B vertical.
• Webcast Announcement: CEO to host an investor webcast on 11 Mar 2026, 11:00 am ET, to discuss the acquisition and operational outlook (registration link provided).

Notable Quotes

“At ~2.9x Adj. EBITDA, we believe this acquisition reflects disciplined capital allocation with compelling returns…the Viral Loops platform provides a powerful tool to help drive referral‑driven customer acquisition for our D2C brands, while enhancing the quality and durability of EMERGE's earnings and cash flow.” – Ghassan Halazon, Founder & CEO, EMERGE Commerce Ltd.