WEST PALM BEACH, Fla. - PSQ Holdings, Inc. (NYSE: PSQH), known as PublicSquare, a marketplace connecting patriotic businesses and consumers, has finalized the acquisition of Credova Holdings, Inc., a Buy Now Pay Later (BNPL) platform focused on the shooting sports industry. The merger, effective as of March 13, 2024, positions Credova as a wholly-owned subsidiary of PublicSquare.
The transaction involved PublicSquare issuing approximately 2.9 million shares of its Class A common stock in exchange for all outstanding shares of Credova. Concurrently, Credova's subordinated debt was settled, with some debt repaid and the rest converted into 10-year PublicSquare promissory notes, also convertible into Class A common stock. Credova's CEO, Dusty Wunderlich, is set to join PublicSquare's board of directors and continue leading Credova's operations.
Credova, which has financed over $250 million in transactions since its 2018 inception, brings over 4,800 merchants and 2.8 million unique applicants to PublicSquare's ecosystem. The acquisition is expected to be immediately accretive to PublicSquare, with Credova's unaudited management financials showing an estimated net revenue of $15.5 million, an adjusted EBITDA of approximately $2.3 million, and Free Cash Flow of $1.6 million for FY2023.
The merger aims to create a robust commerce stack by integrating a payments platform with financing solutions and a marketplace. PublicSquare anticipates that incorporating Credova's BNPL services will enhance sales opportunities for both Credova and PublicSquare merchants. Credova is recognized as a leading BNPL solution in the firearms and shooting sports industry and has exclusive partnerships with over 60% of top online shooting sports retailers.
PublicSquare's Chairman and CEO, Michael Seifert, stated that the acquisition aligns with the company's growth strategy and mission to support the parallel economy. The merger is seen as a significant step in owning the infrastructure foundational to this economy.
The transaction was approved by the boards of directors of both companies and by requisite Credova stockholders. PublicSquare will maintain its headquarters in West Palm Beach, Florida, with the existing management team largely unchanged.
This strategic move is based on a press release statement.
InvestingPro Insights
PublicSquare's acquisition of Credova Holdings, Inc. is aimed at bolstering its marketplace offerings and financial solutions. The deal is expected to generate immediate financial benefits for PublicSquare, given Credova's strong financial performance with significant net revenue and positive EBITDA.
InvestingPro Data shows a market capitalization of $133.7 million for PublicSquare, reflecting its size within the industry. Despite a challenging year with a stock price decline of 52.13% over the past year, the company holds promise with a remarkable quarterly revenue growth of 1529.49% as of Q3 2023. This suggests a potential turnaround or a significant market event that could have influenced such growth.
InvestingPro Tips reveal that PublicSquare holds more cash than debt on its balance sheet, which is a positive sign for the company's financial health and may provide the flexibility to pursue further strategic initiatives. Additionally, analysts anticipate sales growth in the current year, which aligns with the company's expansion plans through the Credova acquisition. However, it's noted that PublicSquare is not expected to be profitable this year, which investors should consider when evaluating the company's near-term financial outlook.
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