DE:CC - Decisive Dividend Corporation Announces the Acquisition of Marketing Impact Limited

(TheNewswire)

April 18, 2022 - TheNewswire - Kelowna, British Columbia - Decisive Dividend Corporation (TSXV:DE) (the “ Corporation ” or“ Decisive ”) is pleased to announce the acquisition of MarketingImpact Limited (the “Acquisition”). The Acquisition is fullyfunded and is expected to be immediately accretive as it represents a19% increase relative to the Corporation’s 2021 reported sales andAdjusted EBITDA (1) . This Acquisition is the first completedby Decisive since 2019. Thus, it is an important milestone inexecuting on Decisive’s buy, build and hold business model,supporting growth and yield for the Corporation’s investors.

Marketing Impact Limited (“MIL”), located in theGreater Toronto Area, designs , manufactures, anddistributes a comprehensive range of merchandising products, systemsand solutions for retail customers including grocery stores,convenience stores, and pharmacies. It also designs and manufacturesdisplays for consumer-packaged goods for use within those samechannels .

MIL has a strong reputation forcustomer service, responsiveness, and innovation amongst its robustlist of blue-chip, well-diversified retail customers across NorthAmerica. Its design team is a leading innovator of merchandisingsystems and consumer-packaged goods displays which is evidenced by the more than 15 patentsissued or pending in MIL’s portfolio.

MIL’s founders will remain on as President and VicePresident respectively for one-year post-acquisition. Opportunitiesfor ongoing involvement of the founders beyond the initial period arein place which will continue to help drive the future growth of MIL.MIL has a dedicated and experienced management team that will continueto report into the founders, led by Alex Viloria, MIL’s GeneralManager, who has extensive experience in the consumer-packaged goods industry across operations, sales andmarketing and administrative functions.

The Acquisition is anticipated to be immediatelyfinancially accretive to Decisive and it is expected to result in anincrease in sales, gross profit, profit, and AdjustedEBITDA (1) . The Acquisition is subject to the terms and conditions of ashare purchase agreement which provided for a base purchase price of$10.0 million, subject to customary adjustments, plus up to anadditional $1.5 million contingent on MIL achieving certain earningstargets over the next three years. The base purchase price reflectsthe historical earnings of MIL and represents a multiple ofapproximately five times the average Adjusted EBITDA of MIL over thelast five years.

On closing, the $10.0 million base purchase price(subject to adjustment) was paid $9.0 million in cash (the“ Cash Consideration ”)and $1.0 million in common shares of Decisive (the “ Share Consideration ”). The CashConsideration was funded through Decisive’s revolving acquisitionand operating facilities. The Share Consideration was funded throughthe issuance of 235,294 common shares of Decisive (representing $1.0million divided by $4.25, being the volume weighted average tradingprice of the common shares of Decisive for the 30-day trading periodended April 13, 2022).

Jeff Schellenberg, Chief Executive Officer of Decisive,noted:

“We are very pleased to be addingMIL into our group of companies which provides Decisive with furtherproduct, industry, and geographic diversity. They design and producegreat products to service a wide range of top tier customers that arein non-cyclical industries selling non-discretionary products. Thesetraits support recurring cash flows and, as a result, are extremelyattractive to us and an excellent match for our dividend-payingbusiness model. In addition, MIL has tremendous growth potential, andwe look forward to supporting MIL and its leadership team in pursuitof this growth as part of our buy, build and hold strategy. TheMarketing Impact team has done a terrific job in building the businessto where it is today, and we welcome them to the Decisivegroup.”

Rick Torriero, Chief Financial Officer of Decisive,noted:

“Funding the acquisition withinour credit facility was also a great outcome as it allowed us to movequickly on this opportunity. We can now look forward to balancing ourlong-term target 50/50 debt and equity ratio post acquisition as wework to integrate MIL into the Decisive group.”

Alex Viloria and the founders of MIL noted:

“We are thrilled to join theDecisive Dividend family. Our customers, suppliers and especially ouremployees have helped to build MIL into the successful company it istoday. We look forward to the continued growth of MIL with Decisive’s support. ”

The table below sets forth the pro forma combinedfinancial information of Decisive and the acquisition of MIL for thetrailing twelve-month period ended December 31, 2021:

1. Adjusted EBITDA is not a recognized financialmeasure under International Financial Reporting Standards (IFRS) andtherefore may not be comparable to similar measures presented by otherissuers, but it is used by management to assess the performance of theCorporation. See ”Non-GAAPFinancial Measures” later in this press release for the fulldescription of Adjusted EBITDA and a reconciliation of applicable IFRSmeasures to non-IFRS measures

2. Based on Decisive’s auditedfinancial information for the year ended December 31, 2021.

3. Based on MIL’s unaudited financialinformation for the period from January 1, 2021 to December 31, 2021. See “Information Relatingto MIL” later in this press release

Decisive is continuing to evaluate further acquisitionopportunities in its healthy, and growing, pipeline of potentialtargets and looks forward to providing updates to its shareholders asa result of these efforts.

Concurrent with the closing of the Acquisition, t he Corporation alsogranted stock options to purchase an aggregate of 5,000 common sharesof the Corporation at an exercise price of $4.50 per common share fora period of ten years from the date of grant. The stock options willvest over a thirty-six (36) month period, with one-third vestingtwelve (12) months from the date of grant, one-third vestingtwenty-four (24) months from the date of grant and the remainingone-third vesting thirty-six (36) months from the date ofgrant.

About Decisive DividendCorporation

Decisive Dividend Corporation is anacquisition-oriented company, focused on opportunities inmanufacturing. The Corporation’s purpose is to be the sought-outchoice for exiting legacy-minded business owners, while supporting thelong-term success of the businesses acquired, and through that,creating sustainable and growing shareholder returns. The Corporationuses a disciplined acquisition strategy to identify alreadyprofitable, well- established , high qualitymanufacturing companies that have a sustainable competitive advantage, a focus onnon-discretionary products, steady cash flows,growth potential and established, strong leadership.

For more information on Decisive, or to sign up foremail notifications of Corporation press releases, please visit www.decisivedividend.com .

FOR FURTHER INFORMATION PLEASE CONTACT:

Jeff Schellenberg, Chief Executive Officer

#201, 1674 Bertram Street

Kelowna, BC V1Y 9G4

Telephone: (250) 870-9146

CautionaryStatements

Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in policies ofthe TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this release .

InformationRelating to MIL

This press release contains certaininformation (including historical financial information) relating toMIL, a private company acquired by Decisive. The information(including financial information) contained herein with respect to MILis based upon information provided to Decisive by MIL and itsmanagement and shareholdersand includes certain non-recurring and related party private companytransactions that have been excluded from the calculation of AdjustedEBITDA below. The financial information relating to MIL has not beenaudited.

Non-GAAP FinancialMeasures

In this press release, reference ismade to “Adjusted EBITDA”, which is not a recognized financialmeasure under IFRS, but is believed to be meaningful in the assessmentof the Corporation’s performance.

“Adjusted EBITDA” is defined asearnings before finance costs, income taxes, depreciation,amortization, foreign exchange gains or losses, other non-cash itemssuch as gains or losses recognized on the fair value of contingentconsideration items, asset impairment, share-based compensation, andrestructuring costs, and other non-operating items such as acquisitioncosts.

Adjusted EBITDA is a financialperformance measure that management believes is useful for investorsto analyze the results of the Corporation’s operating activitiesprior to consideration of how those activities are financed and theimpact of non-operating charges related to planned or completedacquisitions, foreign exchange, taxation, depreciation, amortization,and impairment charges.

The most directly comparablefinancial measure is profit or loss. While Adjusted EBITDA is used bymanagement to assess the historical financial performance of theCorporation, readers are cautioned that:

• Non- IFRS financial measures, such as Adjusted EBITDA, are not recognized financial measures under IFRS

• The Corporation’s method ofcalculating Non- IFRS financial measures, such as Adjusted EBITDA, may differ fromthat of other corporation s or entities and therefore may not bedirectly comparable to measures utilized by other corporations orentities;

• Non- IFRS financial measures, such as AdjustedEBITDA, should not be viewed as an alternative to measures that arerecognized under IFRS such as profit or loss or cash from operatingactivities; and

• A reader should not place unduereliance on any Non- IFRS financial measures.

Set forth below are reconciliationsof Non-IFRS financial measures to their most relevant IFRSmeasures .

Forward-LookingStatements

Certain statements contained in this press release constituteforward-looking information. These statements relate to future eventsor future performance. The use of any of the words “could”,“intend”, “expect”, “believe”, “will”,“projected”, “estimated” and similar expressions andstatements relating to matters that are not historical facts areintended to identify forward-looking information and are based onmanagement’s current beliefs, assumptions and expectations as to theoutcome and timing of such future events.  Actual future results maydiffer materially. In particular, this press release containsforward-looking information relating to the future financial position,operations, business strategy, plans and objectives of theCorporation, and the potential impact, including growth expectations,of the Acquisition on the operations, financial condition, capitalresources, business and dividend policy of the Corporation. Riskfactors that could cause actual results or outcomes to differmaterially from the results expressed or implied by forward-lookinginformation include, among other things: risks relating to theAcquisition (as more particularly described under the heading"Risk Factors – Risk Relating to Acquisitions" in theCorporation's most recent annual information form), as well as generaleconomic conditions; pandemics; competition; government regulation;environmental regulation; access to capital; market trends andinnovation; climate risk; general uninsured losses; risk related toacquisitions generally; dependence on customers, distributors andstrategic relationships; supply and cost of raw materials andpurchased parts; operational performance and growth; implementation ofthe growth strategy; product liability and warranty claims;litigation; reliance on technology, intellectual property, andinformation systems; availability of future financing; interest ratesand debt financing; income tax matters; foreign exchange; dividends;trading volatility of common shares; dilution risk; reliance onmanagement and key personnel; employee and labour relations; andconflicts of interest, all as more particularly described in the mostrecent annual MD&A and annual information form of the Corporationavailable on the Corporation’s profile at www.sedar.com. There can be no assurance asto the future financial performance of the Corporation or that theboard of directors of the Corporation will declare or pay any dividends in thefuture or, if dividends are declared and paid, there can be noassurance as to the frequency or amount of such dividends . The Corporation cautions the reader that the risk factors referencedabove are not exhaustive. The forward-looking information contained inthis release is made as of the date hereof and the Corporation is notobligated to update or revise any forward-looking information, whetheras a result of new information, future events or otherwise, except asrequired by applicable securities laws. Because of the risks,uncertainties and assumptions contained herein, investors should notplace undue reliance on forward-looking information. The foregoingstatements expressly qualify any forward-looking information containedherein .

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