MeetMe to Acquire if(we)


  • Acquisition Increases MeetMe’s Global Portfolio for Mobile Social
    Discovery to 10.6 Million Mobile Monthly Active Users
  • Expected to Contribute At Least $9.0 Million in Adjusted EBITDA and
    be Accretive to Earnings in First 12 Months Post Closing

MeetMe, Inc. (NASDAQ: MEET), a public market leader for social
discovery, today announced it has executed a definitive agreement to
acquire If(we), Inc., a social and mobile technology company, for $60.0
million in cash. This acquisition furthers MeetMe’s strategy to
innovate, acquire and build the largest mobile portfolio of brands for
meeting new people. The if(we) acquisition is expected to provide
greater scale for monetization and increased profitability for the
combined company.

if(we) is a social and mobile technology company based in San
Francisco with:

  • Two leading mobile brands for meeting new people, Tagged and hi5;
  • A community that spans over 100 countries, and apps that are available
    in 15 different languages;
  • 2016 total revenue of approximately $44 million;
  • Q4 2016 mobile revenue up 56% over Q4 2015. Mobile advertising revenue
    up 93% in the same periods;
  • 2.3 million mobile and 5.4 million total monthly active users (MAU) in
    Q4 2016;
  • 10.4 million mobile chats per day in Q4 2016;
  • 18,000 new registered mobile users added each day on average in Q4

Key highlights of the expected scale of the new combined company
(MeetMe + if(we)) include:

  • Mobile MAU of 10.6 million, an increase of 28% from MeetMe’s 8.3
    million average in Q4 2016
  • Mobile daily active users (DAU) of 2.8 million, an increase of 40%
    from MeetMe’s 2.0 million average in Q4 2016;
  • Mobile Chats sent per day of 65.3 million, an increase of 19% from
    MeetMe’s 54.9 million average in Q4 2016;
  • Mobile new users per day of 130,000, an increase of 16% from MeetMe’s
    112,000 per day average in Q4 2016;
  • Nearly 1.1 million US mobile DAU.

Financial impact of acquisition:

  • Expected to provide significantly increased scale in user base and
    revenues, and exhibit strong operating leverage;
  • Expect if(we) to contribute at least $9.0 million of Adjusted EBITDA
    and be accretive to earnings in the first 12 months post-closing.

Geoff Cook, CEO of MeetMe, said, “We believe this combination provides a
clear pathway to $150 million in annualized revenue with adjusted EBITDA
of $50 million for our combined company. We are very excited to add
if(we) and its flagship brands Tagged and hi5 to our portfolio of mobile
apps for meeting and chatting with new people. if(we) brings a sizable
global community, with strength in the US, to our portfolio. Their
mobile apps are experiencing significant revenue growth and we expect
that to accelerate in 2017 as we introduce our best practices around
engagement and monetization. I am excited by the opportunity to work
closely with if(we)’s talented team to accelerate growth and engagement
across our portfolio of brands, which are aimed at meeting the universal
need for human connection.”

“What’s more,” Cook continued, “this announcement comes on the heels of
a very strong period of growth for MeetMe, with total revenue growth of
34 percent in 2016, as reported today, as well as adjusted EBITDA
margins of 39 percent. We believe this acquisition will further build on
this momentum by increasing our scale for monetization and increased

The Company expects that Tagged and hi5 will remain separate brands and
standalone mobile applications following the closing of the acquisition
and if(we) headquarters will remain in San Francisco. The Company has
extended offers of employment to approximately 87 of the company’s 100
employees. Likewise, if(we)’s CEO, Dash Gopinath has agreed to assist
with the transition for one year after the closing.

David Clark, Chief Financial Officer of MeetMe, added, “We expect the
acquisition to close in the second quarter and to be accretive to
earnings and to generate additional free cash flow for MeetMe in the
first twelve months following the closing and beyond. Over time, we
believe that through additional synergies from combining our technology
platforms, optimizing our monetization engine, and cross-promoting to
each user base we can generate additional value from this acquisition.”

The Company expects to fund the acquisition from MeetMe cash on hand and
cash from operations, and from other sources of financing available to
MeetMe, including a $30.0 million bank loan from J.P. Morgan Chase Bank,
N.A. associated with the acquisition.

To support its larger scale, the Company is today announcing a change to
engineering leadership. Skout’s co-founder and CTO Niklas Lindstrom has
joined MeetMe as Chief Technology Officer, to be based in our West Coast
office, and MeetMe’s former CTO Rich Friedman has rejoined the company
as SVP Engineering, to be based in our East Coast location. Mr.
Lindstrom replaces MeetMe’s former Chief Technology Officer, Jonah
Harris, who has agreed to remain with the Company and assist with the
transition over the coming months.

On February 28, 2017, the Company granted stock options to purchase an
aggregate of up to 500,000 shares of its common stock and restricted
stock awards representing an aggregate of 300,000 shares of common stock
to Messrs. Lindstrom and Friedman as an inducement material to their
employment. Each option has a ten-year term, a three-year vesting
period, subject to continued employment, and an exercise price of $4.83
per share, the closing price per share of the Company’s common stock on
the grant date. Each restricted stock award vests one-third each year
during a three-year vesting period. Vesting on both are subject to
continued employment. The grants were approved by the Company’s Board of
Directors, including a majority of its independent directors, and were
made in accordance with NASDAQ Listing Rule 5635(c)(4).

Canaccord Genuity is serving as financial advisor and Morgan, Lewis &
Bockius LLP is serving as legal counsel to MeetMe.

Webcast and Conference Call Details

Management will host a webcast and conference call today, March 6, 2017
at 4:30 p.m. Eastern time to discuss the acquisition. To access the call
dial 888-337-8202 (US and Canada) (+1 913-312-1450 outside the United
States and Canada) and when prompted provide the participant passcode
1061836 to the operator. In addition, a webcast of the conference call
will be available live on the Investor Relations section of the
Company’s website at
and a replay of the webcast will be available for 90 days.

About MeetMe

Through its portfolio of brands, MeetMe (NASDAQ: MEET) is meeting the
universal need for human connection. Using innovative products and
sophisticated data science, MeetMe keeps its approximately two million
daily active users engaged and originates untold numbers of casual
chats, friendships, dates, and marriages. MeetMe offers advertisers the
opportunity to reach customers on a global scale with hundreds of
millions of daily mobile ad impressions. MeetMe utilizes high user
density, economies of scale, and leading monetization strategies to
maximize EBITDA. MeetMe’s apps are available on iPhoneiPad, and Android in
multiple languages worldwide. For more information, please visit

About If(we), Inc.

if(we) operates the leading social platforms Tagged and hi5 with over
five million total monthly active users worldwide. if(we) is continually
developing new social applications to help realize its vision of
enabling meaningful connections.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, including whether the if(we) acquisition will provide greater
scale for monetization and increased profitability for the combined
company; whether mobile MAU for the combined company will be 10.6
million; whether if(we) will contribute approximately $9.0 million in
adjusted EBITDA and be accretive to earnings in the first twelve months
following the closing of the if(we) acquisition; whether and when the
if(we) acquisition will close; whether DAU for the combined company will
be 2.8 million; whether mobile chats sent per day for the combined
company will be 65.3 million; whether mobile new users per day for the
combined company will be 130,000; whether the combined company will have
nearly 1.1 million US mobile DAU; whether the if(we) acquisition will
provide significantly increased scale in user base and provide stronger
operating leverage; whether the if(we) acquisition provides a clear
pathway to $150 million in annualized revenue with adjusted EBITDA of
$50 million for the combined company; whether if(we) mobile apps will
continue to see significant revenue growth in 2017; whether Tagged and
hi5 will remain separate brands and stand-alone mobile applications
following the closing; whether if(we) headquarters will remain in San
Francisco following the closing; whether the if(we) acquisition will
generate additional free cash flow for MeetMe in the first twelve months
following closing and how MeetMe will fund the acquisition of if(we).
All statements other than statements of historical facts contained
herein are forward-looking statements. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “project,” “is likely,” “expect” and
similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections about
future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and
financial needs. Important factors that could cause actual results to
differ from those in the forward-looking statements include the risk
that our applications will not function easily or otherwise as
anticipated, the risk that we will not launch additional features and
upgrades as anticipated, any changes in popular mobile operating systems
that degrade our mobile applications’ functionality and other unexpected
issues which could adversely affect usage on mobile devices. Further
information on our risk factors is contained in our filings with the
Securities and Exchange Commission (“SEC”), including the Form 10-K for
the year ended December 31, 2015, the Form 10-Q for the quarter ended
June 30, 2016 and the Current Reports on Form 8-K filed on October 4,
2016 and March 6, 2017. Any forward-looking statement made by us herein
speaks only as of the date on which it is made. Factors or events that
could cause our actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether as
a result of new information, future developments or otherwise, except as
may be required by law.

Regulation G – Non-GAAP Measures

The Company defines mobile traffic and engagement metrics (including
MAU, DAU, chats per day, and new users per day) to include mobile app
traffic for all properties and mobile web traffic for MeetMe and Skout.

This press release includes a discussion of Adjusted EBITDA from
continuing operations which is a non-GAAP financial measure. For
completed fiscal periods, reconciliations to the most directly
comparable GAAP financial measures are provided in the Investors section
of our corporate website,

The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation, warrant
obligations, non-recurring acquisition, restructuring or other expenses,
gain or loss on cumulative foreign currency translation adjustment, gain
on sale of asset, bad debt expense outside the normal range, and
goodwill and long-lived asset impairment charges. The Company excludes
stock based compensation because it is non­cash in nature.

MEET Investor Contact:
MKR Group Inc.
Todd Kehrli

Source: MeetMe, Inc.