The US-based distributor and wholesaler of music, movies, video games, electronics, arcades and collectibles, said Chairman Bruce Ogilvie and CEO Jeff Walker will continue to lead the combined entity following the merger.
The merger valued Alliance at $480 million.
Shares of Adara, listed as ADRA on the New York Stock Exchange, have been delisted after the SPAC merger, and Alliance will now seek to list on the Nasdaq “as soon as practicable,” subject to certain conditions for an initial public offering.
Following the combination, Alliance says it will make further investments to automate its facilities and upgrade proprietary software to expand the company’s market share.
The companies disclosed the terms of the merger back in June 2022, with Alliance owners set to own 78% of the combined company, while Adara shareholders will hold the remaining 22%.
Alliance is expected to receive $115 million in proceeds from the cash held in trust following the merger, excluding any deferred underwriting commissions, transaction expenses and redemptions by public shareholders of Adara exercising such rights.
Alliance, which claims to stock over 485,000 entertainment products from music companies including Warner Music, Sony Music and Universal Music. It also handles products for entertainment companies including Disney, Warner Home Video, Universal Video, Sony Pictures, Fox, Lionsgate, Paramount, Mattel, Lego, Hasbro and Arcade1Up, and Funko, as well as software companies including Microsoft, Nintendo, Activision, Electronic Arts and Sega.
Founded in 1990, Alliance was acquired by Ogilvie and Walker in 2013.
Ogilvie expects the merger with Adara and Alliance’s upcoming listing to drive inorganic growth through a roll-up strategy of buying and integrating competitors and complementary businesses.
“we expect to see growth from enhancing our DTC relationships to grow existing revenue lines and improving capabilities which will generate a more attractive overall service offering.”
Bruce Ogilvie, Alliance Entertainment
“Combined with further investment including automating facilities and upgrading proprietary software, we are confident we can grow revenue and expand margins. In this next phase of our development, we expect to see growth from enhancing our DTC relationships to grow existing revenue lines and improving capabilities which will generate a more attractive overall service offering,” the chairman says.
“We will also continue to expand into new consumer product segments, growing our product offering and providing more to our existing customer base while attracting new customers in the process. The board of Alliance Entertainment would like to thank the team at Adara and its group of investors for the successful completion of the business combination,” Ogilvie added.
Walker said the merger — combined with the company’s robust revenue growth, expanding customer base and product offering, and several successful acquisitions — will help accelerate Alliance’s future expansion initiatives.
“Alliance Entertainment today is well positioned to continue to capitalize on shifts towards eCommerce and Omni-Channel strategies, especially with retailers and manufacturers vastly increased reliance on their DTC (Direct to Consumer) fulfillment and distribution partners,” says Walker.
“We are at an inflection point that now positions us to execute a multi-prong growth strategy that we expect will deliver a double-digit revenue growth rate with strong cash generation to the bottom line.”
Jeff Walker, Alliance Entertainment
“We are at an inflection point that now positions us to execute a multi-prong growth strategy that we expect will deliver a double-digit revenue growth rate with strong cash generation to the bottom line,” the executive continued.
Commenting on the deal, Adara Acquisition CEO and Chairman Tom Finke says: “We congratulate Alliance Entertainment on today’s accomplishment and look forward to their continued evolution as a leading DTC and eCommerce provider for the entertainment industry.”
“We are confident Alliance Entertainment will provide shareholders with a diversified investment alternative as one of the largest physical media and entertainment product distributors in the world. We believe their expanding use of automation technology to further impact efficiency, cost, and capacity for future growth will deliver long-term value. We look forward to collaborating with Alliance Entertainment as they strategically position the company to achieve its growth objectives.”
The merger between Adara and Alliance marks the latest SPAC combination in the music industry. Last year, Spotify’s France-based rival Deezer merged with a blank-check company to become a publicly listed firm on the Euronext Paris.
However, not all proposed SPAC mergers have proven to be successful.
In December, Liberty Media Acquisition Corporation, launched by media giant Liberty Media two years prior, winded down its business as it was not able to merge with any potential target despite evaluating “more than 140” target companies.
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