Paltalk, Inc. Enters Into an Agreement to Acquire Newtek>
Globe Newswire – Paltalk, Inc.
Paltalk, Inc., a communications software innovator, has entered into a definitive agreement to acquire Newtek Technology Solutions, Inc. (NTS), a wholly owned subsidiary of NewtekOne, Inc
NTS provides dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery, and other related services to enterprise and commercial clients across the U.S
Key points of the acquisition:
1) Paltalk will pay Newtek $4,000,000 in cash and issue 4,000,000 shares of a newly created series of preferred stock, subject to adjustments.
2) Newtek is entitled to receive up to $5,000,000 based on the achievement of certain cumulative average Adjusted EBITDA thresholds for the 2025 and 2026 fiscal years.
3) The acquisition is expected to close in Q4 2024 or Q1 2025, subject to Paltalk stockholders’ approval, regulatory approvals, and other customary closing conditions.
4) Paltalk must effectuate the sale of its “Paltalk”, “Camfrog”, and “Tinychat” applications and related assets and liabilities as a condition to closing the acquisition (the “Divestiture Transaction”).
5) Following the acquisition, Paltalk will appoint one representative nominated by Newtek to its board of directors and expects approximately 50 NTS employees to join Paltalk.
6) Paltalk plans to change its name to “Intelligent Protection Management Corp.” and its ticker symbol to “IPM” after the acquisition closes
The acquisition is expected to have an immediate and meaningful impact on Paltalk’s revenue, as NTS’ 2023 revenue was approximately three times greater than Paltalk’s
Paltalk’s management believes the acquisition will provide enhanced opportunities for future growth and optimization in the cloud infrastructure and cybersecurity sectors
The Paltalk Board has unanimously approved the acquisition agreement and related transactions, and Paltalk intends to file preliminary and definitive proxy statements with the SEC in connection with the proposed transactions
Investors and stockholders are urged to read the proxy statements when they become available, as they will contain important information about the proposed transactions.
Link: https://www.globenewswire.com/news-release/2024/08/12/2928466/0/en/Paltalk-Inc-Enters-Into-an-Agreement-to-Acquire-Newtek-Technology-Solutions-Inc-From-NewtekOne-Inc.html