US-based physical goods distributor and wholesaler Alliance Entertainment is going to list on the New York Stock Exchange – via a merger with a SPAC (Special Purpose Acquisition Company).
Alliance has signed a definitive business combination agreement with Adara Acquisition Corp for the flotation.
The business combination implies a proforma equity value of the combined company of approximately $480 million.
Upon completion of the transaction, and assuming no redemptions by public shareholders of Adara, the current owners of Alliance Entertainment will hold approximately 78% of the combined company and current Adara shareholders will hold approximately 22% of the combined company.
Alliance says it posted annual revenue of $1.4 billion in the year to March 31, 2022. From that revenue, the company recorded $76 million in Adjusted EBITDA.
Alliance Entertainment will receive proceeds of $115 million of cash held in trust from the merger, less any deferred underwriting commissions, transaction expenses and redemptions by public shareholders of Adara exercising such rights.
Alliance currently stocks over 485,000 entertainment products. Its suppliers in music include Warner Music Group [2,106 articles]” href=”https://www.musicbusinessworldwide.com/companies/access-industries/warner-music-group/”>Warner Music Group, Sony Music Group [219 articles]” href=”https://www.musicbusinessworldwide.com/companies/sony/sony-music-group/”>Sony Music Group, and Universal Music Group [2,735 articles]” href=”https://www.musicbusinessworldwide.com/companies/universal-music-group/”>Universal Music Group.
Outside of music, Alliance handles product for clients in industries such as movies, video games, electronics, and collectibles.
Its non-music clients include Microsoft, Nintendo, Activision, Electronic Arts, Sega, Funko, Disney, Warner Home Video, Universal Video, Sony [1,590 articles]” href=”https://www.musicbusinessworldwide.com/companies/sony/”>Sony Pictures, Fox, Lionsgate, Paramount, Mattel, Lego, and Hasbro.
Through its exclusive distribution divisions of AMPED, Distribution Solutions, and Cokem, Alliance says it is the exclusive distributor of over 57,300 unique vinyl, CD, DVD, and video game products to retailers worldwide.
Following the SPAC merger, Alliance will continue to be led by Bruce Ogilvie and Jeff Walker as Chairman and CEO, respectively.
Alliance says going public will “enhance [our] ability to pursue future acquisitions, while also investing in further automation of [our] distribution facilities and upgrading [our] proprietary suite of software”.
“Alliance Entertainment, with limited capital, has grown into a leading distributor and wholesaler of entertainment products,” said Bruce Ogilvie, Chairman of Alliance Entertainment. “We are an essential partner to the best-known entertainment brands and largest retailers. As a public company, we will be well positioned to pursue future strategic combinations that further diversify our products offerings, and to invest further in our operations and proprietary technology.”
Jeff Walker, CEO of Alliance Entertainment, added, “Our Company started as a business plan project at UC Irvine which led to the opening of the CD Listening Bar in 1990. Just as Amazon [595 articles]” href=”https://www.musicbusinessworldwide.com/companies/amazon/”>Amazon started in books in the 1990’s, we saw the opportunity to evolve our music distribution business into a leading eCommerce company serving the biggest brands in the entertainment industry and beyond. Today, with a talented team of over 1,200 employees, and a disciplined focus on service, selection, and technology, we are well positioned to conquer new possibilities as a public company with access to additional growth capital.”
Tom Finke, CEO & Chairman of Adara Acquisition Corp., commented, “Alliance Entertainment has built a strong foundation as one of the largest physical media and entertainment product distributors in the world and is a leader in fulfillment and eCommerce distribution.
“The Company has also expanded the efficiency and environmental efficacy of its operations through a number of ESG efforts. Our business combination will fuel this expansion, with a significant focus on increasing market share, technological advancements, enhanced Direct-to-Consumer relationships and capabilities, and expanding into new consumer products. With a proven track record of accretive acquisitions, the additional capital will enable Alliance Entertainment to effectively execute on its roll-up strategy and accelerate future growth.”
Alliance says it sees $1.4 billion in sales annually, with eCommerce fulfilment (direct-to-consumer) making up 38% of that turnover.
In 2021 Alliance says that it delivered over 13,845,000 products as a drop shipper for Amazon, Walmart, Best Buy, Wayfair, GameStop, Kohls, and Target, plus hundreds of additional eCommerce customers.Music Business Worldwide
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