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Subject: TNM

Upland Software Announces Largest Acquisition to Date, Raises Guidance


AUSTIN, Texas, Oct. 3, 2018 /PRNewswire/ -- Upland Software, Inc. (Nasdaq: UPLD), a leader in cloud-based Enterprise Work Management software, today announced it has acquired Rant & Rave, a leading provider of cloud-based customer engagement solutions.  Rant & Rave's voice of customer (VoC) and voice of employee (VoE) applications enable users to capture, analyze, and act on real-time customer and employee feedback across multiple channels including Short Message Service (SMS), mobile, email, web, and social media.  Rant & Rave is used by over 100 leading European and international brands to proactively communicate with and gather fast feedback from their customers. The acquisition, Upland's largest to date, adds approximately $21.0 million in annualized revenues and will be immediately accretive to Upland's Adjusted EBITDA per share.

Rant & Rave's VoC and VoE solutions will be new offerings on the Upland Mobile Messaging (UMM) platform, the leading mobile engagement platform in the United States for managing, executing, and analyzing personalized mobile messaging campaigns at scale. The UMM platform, with powerful functionality in SMS, Multimedia Messaging Service (MMS), Rich Communication Services (RCS), mobile wallet, and text-to-call, has powered over one million mobile messaging campaigns for more than 350 enterprise customers in healthcare, government, nonprofit and advocacy, consumer brands, media & entertainment, business services, restaurants, and retail.

"Rant & Rave broadens our product portfolio, adds an established sales channel for Upland messaging solutions in Europe, and enables Upland to drive sales of Rant & Rave solutions in the United States," said Jack McDonald, chairman and CEO of Upland Software. "Moreover, the transaction is immediately and meaningfully accretive to Adjusted EBITDA per share and takes Upland to a $168 million annualized revenue run rate," he added. "As this transaction demonstrates, our acquisition pipeline is robust, and we are actively pursuing additional opportunities."

"We are thrilled to welcome Rant & Rave, its innovative technology, and loyal customers to Upland," said Jed Alpert, SVP of Digital Engagement Solutions at Upland Software. "Combined with the Upland Mobile Messaging platform, we look forward to expanding Rant & Rave into the United States, and delivering additional value to their existing customers."

The purchase price paid for Rant & Rave was $58.5 million in cash at closing, net of cash acquired, and a $6.5 million cash holdback payable in 12 months (subject to indemnification claims). Upland expects the acquisition to generate annual revenue of approximately $21.0 million, of which $20.5 million is recurring, subject to reductions for a deferred revenue discount as a result of GAAP purchase accounting, estimated at $0.5 million for the remainder of 2018. The acquisition is within Upland's target range of 5-8x pro forma Adjusted EBITDA and will generate at least $9.5 million in Adjusted EBITDA annually once fully integrated. The acquisition will be immediately accretive to Upland's Adjusted EBITDA per share.

In connection with the acquisition of Rant & Rave, Upland amended and expanded its credit facility from $258.7 million to $358.9 million. Specifically, $63.0 million of new term debt was drawn, taking Upland's gross debt outstanding from $160.9 million to $223.9 million with debt, net of cash on hand, now at approximately $209 million at a new lower maximum interest rate of LIBOR + 400 basis points (currently at approximately 6.2%). Further details regarding the transaction can be obtained in the Form 8-K filed on October 3, 2018.

Business Outlook

Upland today also announced that it has raised its full year 2018 guidance to reflect the Rant & Rave acquisition, raising revenue, recurring revenue, and Adjusted EBITDA guidance ranges.  The increase in 2018 revenue guidance below is net of an estimated $0.5 million reduction for a deferred revenue discount as a result of GAAP purchase accounting and all guidance adjustments are prorated for an effective closing date of October 1, 2018. 

For the full year ending December 31, 2018, Upland expects reported total revenue to be between $144.4 and $147.4 million, including subscription and support revenue between $131.7 and $133.7 million, for growth in recurring revenue of 55% at the mid-point over the year ended December 31, 2017.  Adjusted EBITDA is expected to be between $50.9 and $52.3 million, representing growth of 70% at the mid-point over the year ended December 31, 2017.  The transaction will be immediately accretive to Upland's Adjusted EBITDA per share. 

About Upland Software

Upland Software (Nasdaq: UPLD) is a leading provider of cloud-based Enterprise Work Management software. Our family of applications enables users to manage their projects, professional workforce and IT investments; automate document-intensive business processes; and effectively engage with their customers, prospects and community via the web and mobile technologies. With more than 4,000 customers and over 450,000 users around the world, Upland Software solutions help customers run their operations smoothly, adapt to change quickly, and achieve better results every day. To learn more, visit www.uplandsoftware.com.

About Rant & Rave

Rant & Rave provides customer engagement solutions with a difference. Headquartered in the UK, half of the FTSE rely on the Rant & Rave platform to proactively communicate with and gather fast feedback from their customers. Rant & Rave is also the only customer engagement vendor in the UK to be ISO 27001 accredited, the international standard that describes best practice for an Information Security Management System. To learn more, visit www.rantandrave.com.

GP Bullhound acted as exclusive financial advisor to Rant & Rave.

Notes & Forward-looking Statements

Annualized revenues exclude the impact of deferred revenue discount associated with GAAP purchase accounting. This release contains forward-looking statements, which are subject to substantial risks, uncertainties and assumptions. Accordingly, you should not place undue reliance on these forward-looking statements. Forward-looking statements include any statement that does not directly relate to any historical or current fact and often include words such as "target," "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: our financial performance and our ability to achieve, sustain or increase profitability or predict financial results; our ability to attract and retain customers; our ability to deliver high-quality customer service; lack of demand growth for enterprise work management applications; our ability to effectively manage our growth; our ability to consummate and integrate acquisitions and mergers; our ability to maintain our senior management and key personnel; our ability to maintain and expand our direct sales organization; the performance of our resellers; our ability to adapt to changing market conditions and competition; our ability to successfully enter new markets and manage our international expansion; fluctuations in currency exchange rates; the operation and reliability of our third-party data centers and other service providers; and factors that could affect our business and financial results identified in Upland's filings with the Securities and Exchange Commission (the "SEC"), including Upland's most recent annual report on Form 10-K filed with the SEC. Additional information will also be set forth in Upland's future quarterly reports on Forms 10-Q, annual reports on Form 10-K, and other filings that Upland makes with the SEC. The forward-looking statements herein represent Upland's views as of the date of this press release and these views could change. However, while Upland may elect to update these forward-looking statements at some point in the future, Upland specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the views of Upland as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures including Adjusted EBITDA.

We use non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, such as our revenues excluding the impact for foreign currency fluctuations or our operating performance excluding not only non-cash charges, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. Non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and they are used by our institutional investors and the analyst community to help them analyze the health of our business. 

Upland defines Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus net income (loss) from discontinued operations, depreciation and amortization expense, interest expense, net, other expense (income), net, provision for income taxes, stock-based compensation expense, acquisition-related expenses, non-recurring litigation costs, and purchase accounting adjustments for deferred revenue.

For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please see Upland's earnings press releases filed on Forms 8-K with the SEC and on the Investor Relations section of Upland's website at investor.uplandsoftware.com.  We are unable to reconcile any forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

Media Contact:

Christina Turner

1.833.UPLAND1 (Press 4 for Media Relations)

[email protected]

Upland Software, Inc. (PRNewsfoto/Upland Software, Inc.)

SOURCE Upland Software, Inc.


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