Zoosk to be acquired by Spark Networks SE for $255mn
Spark Networks, a global online dating services company headquartered in Berlin, Germany, announced this week its entry into a binding agreement to acquire US dating app company Zoosk Inc. The deal will see Spark Networks acquire 100% of Zoosk's shares with a combination of cash and stock valuing the company at approximately US$255mn, based on the closing price of Spark Networks stock on March 20, 2019.
The acquisition will more than double the size of Spark Networks, with over two thirds of the company’s revenue expected to be generated in the North American region by 2020.
"Zoosk is one of the strongest dating apps in the North American market, which comprises half of the $5 billion global online dating opportunity," said Jeronimo Folgueira, Chief Executive Officer of Spark Networks SE.
"Similarly, North America has been a key strategic market for Spark, and the focal point for our growth initiatives. Our deal with Zoosk creates the second largest online dating platform in North America and the second largest publicly-listed dating company in the world. Over the past 18 months, our management team has successfully integrated acquisitions and developed new brands. As a result of these efforts, our brand portfolio now includes SilverSingles, which continues to exceed our expectations, and the Christian Mingle, Jdate and JSwipe brands, which have all shown significant improvement since they were acquired in late 2017. Our acquisition of Zoosk is the most transformative deal in our history, and we expect the transaction to immediately strengthen our position in the online dating market. With the increased scale that results from the combination, we see a clear path to profitability improvements and greater opportunity to invest in innovation and growth initiatives that will drive shareholder value."
As part of the transaction, Spark will issue approximately 13mn American Depository Shares (ADSs) valued at approximately $150mn based on the closing price of Spark Networks SE stock of $11.53 on March 20, 2019. Additionally, Zoosk shareholders will receive net cash consideration of $95 million at closing and $10mn via a deferred cash payment in December 2020, which will be funded through a new $120mn senior secured debt facility.
The existing Spark Networks SE executive team will manage the combined company, wth Steven McArthur, Zoosk's CEO and Deepak Kamra, General Partner at Canaan Partners, Zoosk's largest shareholder, being promoted to Spark's Board of Directors following the closure of the transaction in Q3, 2019.
"We are excited to help create such a broad and powerful portfolio of brands that will address specific user needs in the dating market globally, while leveraging the best of both companies to create a world-class platform to serve customers across these brands," said McArthur.