- Concurrent acquisitions of main tax return preparation service supplier (Liberty Tax) and established shopper and small enterprise lender (LoanMe), leading to over 1.6 million mixed present prospects throughout North America and establishing a diversified monetary providers platform with rapid scale for NextPoint’s shopper and small enterprise prospects
- Leading edge digital platforms and roughly 2,700 places throughout North America place NextPoint for an omni-channel roll-out of small enterprise loans and new merchandise together with mortgages
- Professional forma mixed complete enterprise worth of US$643 million; 2021 professional forma mixed income of US$317 million; and 2021 professional forma mixed adjusted EBITDA of US$100 million
- US$25 million fully-committed PIPE led by hedge fund veteran Leon Cooperman, with participation by NextPoint’s present and post-closing administration
- The acquisitions are absolutely supported by financing commitments and are anticipated to shut in Q2 2021
TORONTO, Feb. 22, 2021 /PRNewswire/ – NextPoint Acquisition Corp. (TSX: NAC.U) (TSX: NAC.WT.U) (“NextPoint”), a publicly traded particular objective acquisition company (SPAC), introduced at the moment that it has entered into definitive agreements to accumulate Liberty Tax and LoanMe. The mixed enterprise, to be named NextPoint Monetary Inc., shall be led by business veterans Brent Turner, as Chief Govt Officer, and Andy Neuberger, as Chairman.
Based in 1997, and with over 1.6 million returns ready yearly, Liberty Tax is the third largest institutional tax preparation service supplier in the USA, and the second largest supplier of such providers in Canada. Liberty Tax’s core merchandise embrace tax preparation for people and small companies, and tax-related monetary merchandise akin to pay as you go debit playing cards and refund switch merchandise. Liberty Tax provides providers at its roughly 2,700 franchised and owned places in addition to by way of on-line options. Liberty Tax is presently owned by Franchise Group, Inc. (NASDAQ: FRG), an operator of franchised and franchisable companies.
Based in 2014, LoanMe is a well-established, tech-enabled, shopper and small enterprise lender that has originated over US$2 billion of loans to greater than 340,000 debtors. Its present product suite consists of shopper installment mortgage choices of between US$1,000 and US$20,000, and small enterprise and service provider money advance loans as much as US$100,000.
The mixture of Liberty Tax and LoanMe positions NextPoint to change into a number one one-stop monetary providers superstore vacation spot for credit-challenged customers and small companies, a buyer demographic usually missed by conventional monetary establishments. The mixture of Liberty Tax and LoanMe gives the anchor for a platform which NextPoint intends to develop with an array of monetary services. By way of elevated monetary connectivity with its buyer base, NextPoint expects to strengthen and develop its buyer relationships, develop its income sources and drive worth to its buyers.
“We based NextPoint to construct a monetary providers platform for these which are underserved by conventional monetary establishments, and we’ve executed on that plan. The mixture of Liberty Tax and LoanMe, represents step one, with rapid scale, in the direction of attaining our objective. NextPoint’s founders and the management groups at each Liberty Tax and LoanMe are equally dedicated to fulfilling our imaginative and prescient of turning into a one-stop monetary providers vacation spot for our prospects, and I’m thrilled to companion with this highly-driven crew as we proceed to execute on that imaginative and prescient,” mentioned Andy Neuberger, Chairman of NextPoint.
“With over 1.6 million mixed prospects at the moment, our in depth distribution platform will allow us to service principal road customers and small companies each digitally and thru our 2,700 franchised and owned places throughout North America. We consider our hard-working prospects deserve a private and frictionless expertise when addressing their monetary wants, and entry to an applicable suite of monetary services. NextPoint intends to supply that have and entry to assist our prospects attain the “nextpoint” of their monetary objectives. I’m tremendously excited, for each our prospects and our buyers, by the alternatives offered in bringing collectively these two dynamic corporations and administration groups,” mentioned Brent Turner, who will lead NextPoint as its Chief Govt Officer.
- Countercyclical enterprise mannequin and resilient year-round operations – diversified price and lending income: shopper lending (36%); tax preparation (26%); small and medium-sized enterprise (“SME”) lending (16%); and different providers/new product roll-outs (22%)
- Monumental market of underserved customers and small enterprise – greater than 155 million U.S. tax filings in 2019, rising constantly at 1.14% per yr with 58% of filed returns utilizing paid tax preparation providers; 30 million SMEs within the U.S., usually underserved by conventional monetary establishments
- Huge cross-selling alternatives – rapid impression of entry to mixed companies’ full suite of services by 1.6 million legacy companies’ mixed buyer base; in-built buyer base for brand spanking new product and repair choices
- Vital progress potential – anticipated new services, constructed organically or by way of acquisitions in a largely fragmented business, embrace mortgages, level of sale lending, traces of credit score, cell app subscription providers, auto finance, cell banking, debt decision and monetary well being providers
- Sturdy and scalable expertise platform – mixed IT infrastructure funding of over US$21 million by acquired companies throughout previous two years; multi-platform accessibility, prompt mortgage funding, real-time processing and analytics, and fully-integrated datastores, all hosted on premier, cloud-based platforms designed to serve prospects conveniently on-line, by way of cell or in-person
- Robust danger administration and compliance centered tradition – strong underwriting capabilities to drive engaging risk-adjusted yields developed by way of 340,000 loans funded by LoanMe
- Veteran management crew –Liberty Tax and LoanMe senior administration to guide operations and progress underneath steerage of NextPoint board steeped in finance, retail and franchising experience
NextPoint will purchase Liberty Tax (everything of its enterprise, which is operated in each the USA and Canada) at an enterprise worth of roughly US$252 million, US$182 million of which is payable in money and the stability of which is payable in NextPoint widespread inventory equivalents and topic to adjustment.
NextPoint will purchase LoanMe at an enterprise worth of roughly US$102 million, US$18 million of which is payable in money, roughly US$49 million of which is payable in NextPoint widespread inventory equivalents and with the stability of which displays the idea of present company web debt at LoanMe.
The money portion of the acquisition costs payable within the Liberty Tax and LoanMe transactions shall be funded with money remaining on deposit within the escrow account holding NextPoint’s IPO proceeds and, to the extent crucial, any mixture of the proceeds of the fully-committed US$25 million PIPE, and advances in opposition to the brand new, fully-committed US$200 million revolving credit score facility, every mentioned beneath.
The acquisitions, that are every topic to customary closing circumstances, are anticipated to shut contemporaneously within the second quarter of 2021. The transactions stay topic to satisfaction or waiver of sure customary closing circumstances together with amongst different issues, the relevant ready interval underneath the Hart-Scott-Rodino Antitrust Enhancements Act of 1976, the approval of the Toronto Inventory Change recognizing the transactions as NextPoint’s qualifying acquisition, and the issuance of a receipt for a remaining prospectus on behalf of Canadian securities regulatory authorities.
NextPoint has acquired commitments to buy US$25 million of NextPoint widespread inventory equivalents at a worth of US$10 per share. The PIPE issuance will happen along side the closing of the Liberty Tax and LoanMe acquisitions however shouldn’t be a situation to the closing of such transactions. The PIPE funding is led by hedge fund veteran Leon Cooperman, and consists of Andy Neuberger, Brent Turner and members of NextPoint’s board of administrators. PIPE proceeds can be found for NextPoint’s basic company functions, together with to fund the Liberty Tax and LoanMe money consideration, and to fund potential future acquisitions. The PIPE is topic to the approval of the Toronto Inventory Change.
New US$200 million Revolving Credit score Facility
NextPoint has obtained a dedication for a brand new US$200 million revolving credit score facility, advances underneath which can be used for NextPoint’s basic company functions, together with to fund the Liberty Tax and LoanMe money buy costs, and to fund potential future acquisitions.
Jefferies LLC is performing as unique monetary advisor to NextPoint and Canaccord Genuity Corp. is performing as NextPoint’s capital markets advisor. Brown Rudnick LLP and Blake, Cassels & Graydon LLP are performing as authorized counsel to NextPoint.
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NextPoint has filed at the moment an investor presentation that describes in additional element the transactions and the enterprise of NextPoint following closing. The presentation is obtainable underneath NextPoint’s profile at www.sedar.com.
Pursuant to the foundations of the Toronto Inventory Change NextPoint will file with the Canadian securities regulatory authorities in every of the provinces and territories of Canada, besides Quebec, a non-offering prospectus containing disclosure concerning the transactions and NextPoint assuming completion of the transactions. The preliminary prospectus is anticipated to be filed within the first quarter of 2021. Traders and securityholders might acquire a duplicate of the definitive agreements for the transactions and the prospectus when filed underneath NextPoint’s profile on the SEDAR web site at www.sedar.com.
NextPoint Acquisition Corp. is a particular objective acquisition company included underneath the legal guidelines of the Province of British Columbia for the needs of effecting, straight or not directly, a qualifying transaction inside a specified time period.
About Liberty Tax
Based in 1997, Liberty Tax is a nationwide tax return preparation and associated providers agency. In 2020, Liberty Tax serviced over 1.6 million prospects on-line and thru roughly 2,700 franchised and owned places throughout the U.S. and Canada. Liberty Tax is presently owned by Franchise Group, Inc. (NASDAQ: FRG), an operator of franchised and franchisable companies.
LoanMe is a longtime tech-enabled shopper and small enterprise lender that has originated over US$2 billion loans on behalf of over 340,000 debtors since inception.
A few of the statements contained on this press launch are forward-looking statements throughout the that means of U.S. securities regulation and forward-looking info throughout the that means of relevant Canadian securities legal guidelines (collectively, “forward-looking statements”). Ahead-looking statements are all statements aside from these of historic reality, and usually could also be recognized by way of phrases akin to “anticipate,” “consider,” “proceed,” “estimate,” “anticipate,” “future,” “intend,” “might,” “mannequin,” “outlook,” “plan,” “professional forma,” “undertaking,” “search,” “ought to,” “will,” “would” or different comparable expressions that point out future occasions or traits. These forward-looking statements embrace, however aren’t restricted to, statements concerning estimates and forecasts of monetary and efficiency metrics, projections of market alternative and market share, enterprise plans and methods, enlargement and acquisition alternatives, progress prospects and shopper and business traits. These statements are primarily based on varied assumptions, whether or not or not recognized on this press launch, and on the present expectations of NextPoint’s administration and aren’t ensures of precise efficiency. These forward-looking statements are supplied for illustrative functions solely and aren’t meant to function, and should not be relied on by any investor as, a assure, assurance or definitive assertion of reality or likelihood. Precise occasions and circumstances are troublesome or unattainable to foretell and will differ materially from these contained in or implied by such forward-looking statements. These forward-looking statements are topic to numerous dangers and uncertainties, lots of that are past the management of NextPoint. Elements that might trigger precise outcomes to vary materially from the outcomes expressed or implied by such forward-looking statements embrace, amongst others: the impact of financial circumstances on the industries and markets wherein Liberty Tax and LoanMe function, together with monetary market circumstances, fluctuations in costs, rates of interest and market demand; the power of the events to efficiently or well timed consummate the transactions, together with the chance that any required regulatory approvals aren’t obtained, are delayed or are topic to unanticipated circumstances that might adversely have an effect on the mixed firm or the anticipated advantages of the transactions; dangers related to completion of the PIPE together with buyers’ dedication to fund their subscription quantity; failure to understand the anticipated advantages of the transactions; dangers referring to the uncertainty of the projected monetary info; the results of competitors on future enterprise; dangers associated to the natural and inorganic progress of future enterprise and the timing of anticipated enterprise milestones; the quantity of redemptions, if any, made by NextPoint’s shareholders in reference to the transactions; the potential antagonistic results of the continued COVID-19 pandemic on enterprise and the U.S. economic system; declines or unanticipated modifications in shopper demand, potential departures from the mixed firm’s senior administration crew; integration dangers related to acquisitions; modifications in relevant legal guidelines and laws and the numerous expense of working in a extremely regulated business; the mixed firm’s potential to make funds on its indebtedness; and people elements mentioned in paperwork of NextPoint filed, or to be filed with Canadian securities regulatory authorities. There could also be extra dangers that NextPoint doesn’t know or that NextPoint presently believes are immaterial that might additionally trigger precise outcomes to vary from these expressed in or implied by these forward-looking statements. As well as, forward-looking statements mirror NextPoint’s expectations, plans or forecasts of future occasions and views as of the date of this press launch. NextPoint undertakes no obligation to replace or revise any forward-looking statements contained herein, besides as could also be required by regulation. Accordingly, undue reliance shouldn’t be positioned upon these forward-looking statements.
Non-IFRS Monetary Measures
This presentation refers to sure monetary measures, akin to EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Whole Enterprise Worth, Adjusted Internet Earnings and Compound Annual Development Charge (“CAGR”) which aren’t measures acknowledged underneath IFRS and do not need a standardized that means prescribed by IFRS. Consequently, these measures will not be corresponding to comparable measures reported by different firms. These measures are meant to supply extra info to the person and shouldn’t be thought of in isolation or as an alternative to measures ready in accordance with IFRS. “EBITDA” is outlined as web revenue adjusted to exclude curiosity, revenue taxes, depreciation and amortization. “EBITDA Margin” is outlined as EBITDA divided by complete income. “Adjusted EBITDA” is outlined as web revenue adjusted to exclude curiosity, revenue taxes, depreciation, amortization and non-cash or non-recurring objects. “Adjusted EBITDA Margin” is outlined as Adjusted EBITDA divided by complete income. “Adjusted Internet Earnings” is outlined as Adjusted EBITDA tax-affected at an assumed tax price of 25%. “Whole Enterprise Worth” is outlined as market capitalization plus complete debt excellent much less money readily available. “CAGR” is outlined because the compound annual progress price within the company’s income throughout the efficiency interval. See “Preliminary IFRS Reconciliation”.
Sure Different Issues
This presentation shall not represent a proposal to promote or the solicitation of a proposal to purchase any securities, nor shall there be any supply or sale of securities in any jurisdiction the place such supply, solicitation or sale can be illegal previous to registration or qualification underneath securities legal guidelines of any such jurisdiction. The securities of NextPoint haven’t been and won’t be registered underneath the USA Securities Act of 1933, as amended (the “US Securities Act”), or any state securities legal guidelines and will not be supplied or offered inside the USA or to, or for the account or advantage of, “U.S. individuals,” as such time period is outlined in Regulation S underneath the U.S. Securities Act, except an exemption from such registration is obtainable.
SOURCE NextPoint Acquisition Corp.