Following TSXV debut, Emerge Commerce acquires truLOCAL

Ghassan - Emerge

Toronto-based Emerge Commerce has acquired Kitchener-Waterloo-based food tech startup truLOCAL for up to $16.8 million CAD.

The deal, which closed December 31, represents the fifth acquisition for Emerge Commerce and its largest to date.

The acquisition represents Emerge’s first since it began trading on the TSXV last month.

The $16.8 million transaction consisted of $6.5 million in cash on closing and 4,666,667 common shares of Emerge. Two years from the date of the deal, Emerge will also pay a deferred cash consideration of $1.5 million so long as certain key employees, including founder and CEO Marc Lafleur, remain at truLOCAL.

An additional contingent earn-out of up to $4.5 million may also be paid by Emerge based on truLOCAL’s overall operating performance over a two-year period following the closing of the deal.

Emerge funded the acquisition through a $3 million debt facility from Cortland Credit Group. Cortland provided Emerge with a $5 million debt facility in November 2019 to fund the startup’s acquisition of UnderPar Group. The most recent debt facility closed in December 2020 and brings Cortland Credit’s total contribution to Emerge to $8 million.

“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,” said Emerge’s founder and CEO, Ghassan Halazon.

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Founded in 2016, truLOCAL offers direct-to-consumer monthly locally-sourced meat product plans through an online subscription service that ships overnight to consumers. In a statement issued Monday, Emerge claimed truLOCAL generated $19.8 million CAD in revenue in 2020, representing more than a 130 percent growth year-over-year.

In addition to Kitchener-Waterloo, truLOCAL also has offices and facilities in Vancouver, Calgary, and Chicago. Following the deal, truLOCAL’s 50-person team and brand will remain in place.

The acquisition represents Emerge’s first since making its debut on the TSX Venture Exchange (TSXV) last month. The startup initially revealed plans to go public in May 2020 and went public via a reverse takeover of Aumento. As of Monday, Emerge Commerce is trading on the TSXV at $1.11 CAD.

Emerge brands itself as an acquirer and operator of niche e-commerce brands. Founded in 2015, the company operates in a wide array of e-commerce categories, including groceries, golf, and travel, among others.

“In Emerge, we identified a truly founder-friendly strategic partner that deeply appreciates our culture and is supportive of our ambitious growth plan,” said Lafleur. “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.”

Image courtesy Emerge Commerce.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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