EMERGE Acquires truLOCAL, the Market Leader in Direct-to-Consumer, Meat Subscriptions for up to $16.8M

• truLOCAL is EMERGE's 5^th acquisition, largest deal to date, and is expected to be immediately accretive to earnings
• truLOCAL generated revenue of approximately $19.8 million (unaudited) in the twelve months ended December 31, 2020, representing over 130% growth year-over-year
• Acquisition provides EMERGE with its first monthly recurring subscription offering, premium customer base and highly strategic food technology platform
• The Transaction was funded with cash on hand and drawdown of remaining $3.0 million available from EMERGE's debt facility
• truLOCAL's award-winning founder and team, led by Marc Lafleur, will continue in their roles post-acquisition

TORONTO, Jan. 4, 2021 /CNW/ - EMERGE Commerce Ltd. ("EMERGE" or the "Company") (TSXV: ECOM), a leading acquirer and operator of niche e-commerce brands, announces that it has closed the acquisition of all the issued and outstanding shares of truLOCAL Inc. ("truLOCAL") (www.trulocal.ca) effective December 31, 2020 (the "Transaction"). truLOCAL is a market leading, direct-to-consumer, locally sourced meat subscription service in Canada, with a growing presence in the US. truLOCAL was recently ranked as Canada's 14^th fastest growing Company for 2017-2019 in Canada by the Globe and Mail (2020).

The total purchase price for the Transaction is up to $16.8 million. The initial consideration payable by EMERGE in connection with the acquisition of truLOCAL consisted of the following: (i) $6.5 million paid in cash upon closing of the Transaction; and (ii) 4,666,667 common shares of EMERGE. Two years from the date of the Transaction, EMERGE will pay deferred cash consideration of $1.5 million so long as certain key employees, including Marc Lafleur, remain with truLOCAL. In addition, a contingent earn-out of up to $4.5 million may be payable based on overall operating performance of truLOCAL over a two year period following closing, with up to $1.5 million in cash in Year 1, and up to $1.5 million cash and up to $1.5 million in EMERGE shares⁽¹⁾ in Year 2. The Transaction was funded with cash on hand and drawing the final $3.0 million available from EMERGE's debt facility.

"In truLOCAL, we have acquired a profitable market leader in the lucrative food tech space that happens to be one of the fastest growing companies in Canada," said EMERGE Founder and CEO, Ghassan Halazon. "Throughout the pandemic, online shopping for groceries, and meats in particular, has been a bestselling vertical across both EMERGE and the e-commerce sector at large, sparking our strategic interest in the category, and eventually leading us to the formidable business that is truLOCAL under Marc's leadership."

truLOCAL generated revenue of approximately $19.8 million (unaudited) in the twelve months ended December 31, 2020, representing over 130% growth year-over-year, and is expected to be immediately accretive to EMERGE's earnings. The acquisition will see the founding team and brand remain in place.

"In 4 years, we've been fortunate enough to put together a team of dedicated individuals who have worked together to make truLOCAL the Canadian category leader in meat subscription. In the process, we've introduced local farmers, producers and suppliers to the power of e-commerce, connecting them with thousands of loyal, health-conscious consumers across the country," said Marc Lafleur, Founder and CEO of truLOCAL. "In EMERGE, we identified a truly founder-friendly strategic partner that deeply appreciates our culture and is supportive of our ambitious growth plans. We're excited to leverage EMERGE's acquisition engine and gain access to their full suite of shared services, data insights, and cross-selling with their extensive member database. truLOCAL has achieved this success because of our amazing community of customers who have supported us and offered genuine feedback along the way. Our mission remains the same, to connect as many people as possible to Canada's hard-working producers and suppliers, and we feel that with this partnership we will be in a better position to accomplish that mission."

truLOCAL is headquartered in Kitchener, Ontario with offices and facilities in Vancouver, Calgary, and Chicago. This is EMERGE's 5th acquisition in North America, and its first acquisition since becoming publicly listed on the TSX Venture Exchange under the symbol "ECOM" in December 2020.

"truLOCAL has the potential to become an iconic Canadian e-commerce brand, and it is well-positioned to do just that under EMERGE. In 2021 and beyond, we plan to continue to acquire and accelerate market-leading e-commerce assets as we set out to become the preeminent consolidator of digitals brands across North America," said Drew Green, EMERGE Chairman.

All shares issued in relation to the Transaction will be subject to restrictions from trading for 180 days from date of issuance. The Transaction constituted an Expedited Acquisition in accordance with Policy 5.3 of the TSX Venture Exchange.

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The earn-out share consideration will be based on the 15-day volume weighted average price ("VWAP") at the date of issuance, with a maximum number of shares issuable of 1,630,434. In the event the VWAP multiplied by the number of shares issued is less than the amount owing under share portion of the earn-out, EMERGE will pay the difference of up to $500,000 in cash.

About EMERGE: 

EMERGE is a disciplined, diversified, rapidly growing acquirer and operator of niche e-commerce brands across North America. Our network of e-commerce sites provides our members with access to groceries, golf, nearby escapes, and family offers. Our portfolio houses some of Canada's most coveted online destinations including trulocal.ca, UnderPar.com, WagJag.com, JustGolfStuff.ca, and BeRightBack.ca. EMERGE was named one of the fastest growing companies in Canada by the Startup 50, and the Globe and Mail's 2020 Canada's Top Growing Companies.

To learn more, visit www.emerge-commerce.com.

About truLOCAL (www.trulocal.ca):

Founded in February 2016 in Kitchener, Ontario, truLOCAL is a tech-enabled startup and online marketplace that connects health-conscious consumers to local suppliers in Canada and the U.S., giving them a more convenient way to access clean, locally sourced meat products. truLOCAL has created its own online marketplace (www.trulocal.ca) for local meat suppliers to sell their products online, eliminating the challenges of shopping for quality meats by allowing anyone within their province to see offerings from local suppliers online. With a 2017-2019 year growth rate of 3,695%, truLOCAL was recently listed as Canada's 14^th Top Growing Company by the Globe and Mail. truLOCAL has given suppliers and producers access to interested consumers while providing a key distribution channel for suppliers looking to pivot into e-commerce to address the increase in demand for online shopping.

To learn more, visit www.trulocal.ca.

Cautionary notice
Investors are cautioned that any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

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.

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 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.  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 the risk factors discussed in the Company's filing statement which are incorporated herein by reference and are available through SEDAR at www.sedar.com. 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.

SOURCE EMERGE Commerce Ltd.

Investor Relations: James Bowen, CFA, EMERGE Commerce Ltd., 416-519-9442, [email protected]; Media Relations: Lauren Arnold, Talk Shop Media, [email protected]