Mr. Sean Dollinger reports
NAMASTE ACQUIRES FINDIFY, A LEADING A.I. AND MACHINE LEARNING COMPANY, TO INCREASE CONVERSION RATES, AVERAGE ORDER VALUE, RETENTION AND REFERRALS
On May 1, 2018, Namaste Technologies Inc. executed a definitive agreement to acquire all of the issued and outstanding shares of Findify AB, for a purchase price of $12-million (U.S.) in a combination of cash and common shares of the company. Findify is a global leader in artificial intelligence powered e-commerce personalization, delivering solutions such as personalized search, recommendations and advanced data analytics. Among its customers are Nine West, PLV Shoes and Rocketdog.
Management expects the integration of Findify's proprietary technology to increase monetization and propel revenue growth in both cannabis and hardware sales. In addition to anticipated growth in Namaste's core business, the company will allocate resources to expand on Findify's existing platform and expects this to result in increased earnings before interest, taxes, depreciation and amortization by the end of 2019. Namaste also anticipates accelerating patient growth through its wholly owned subsidiary and Canada's first fully compliant on-line patient portal, NamasteMD Inc. By implementing Findify's technology in applications of patient acquisition, conversion rates, order value and customer retention, the company expects to reach 50,000 medical cannabis patients by the end of 2018 and up to 100,000 by the end of 2019.
Findify's platform, which is used by leading e-commerce websites, including Namaste, uses proprietary real-time machine learning algorithms to build unique user profiles, and deliver a personalized experience for each user. The platform continuously learns from user behavior to automatically improve search results, recommendations and product landing pages, displaying the most relevant products at any given time. It identifies product trends and, in combination with an analysis of unique customer behaviour, ranks products in a way to optimize revenue, conversion rates and average order value. Based on the Bank of Canada's exchange rate on May 1, 2018, Findify's annual 2017 revenue was $503,170 and its first quarter 2018 revenue was $198,211.
Key terms of the acquisition
Namaste will acquire all issued and outstanding shares of Findify in exchange for:
- $2-million (U.S.) in cash to be paid upon the closing date of the transaction;
$10-million (U.S.) to be paid in common shares of Namaste at a mutually agreed price of $1.80 per common share.
Key designated employees of Findify will be remaining with the company after the completion of the acquisition.
The acquisition of Findify brings an incredible amount of value to the company in applications related to the on-line retail of medical cannabis. Namaste recognizes this as a unique opportunity to offer medical cannabis patients an even more personalized experience. The acquisition of Findify will reinforce Namaste's goal of becoming the global leader in cannabis technology solutions by further expanding its innovative e-commerce platform and enhancing the user experience for cannabis patients globally.
In addition, the acquisition of Findify creates a new revenue stream for the company in the field of artificial intelligence and data analytics. Namaste will continue to operate and expand on Findify's existing platform and client portfolio. Namaste anticipates rapid expansion of its technology licensing business.
Meni Morim, founder and chief executive officer of Findify, comments: "The Findify team is very excited to join the Namaste family and take part in revolutionizing the on-line cannabis domain. The team brings years of experience, having built a unique machine learning platform that leverages user behavior, to deliver a personalized e-commerce experience across touch points, with a focus on search and discovery. We believe that Namaste's strong positioning in the market will enable us to take advantage of this technology in the best possible way, and deliver immediate value to customers and shareholders -- by buildings the world's first fully integrated AI platform for cannabis.
"Having built a relationship with Namaste as a client over the past two years, we found that we share many of the same core values, work ethic and passion for building products that people love. We're confident that the merging of our teams will enable us to continue innovating in this fast-paced, growing industry."
Laurens Feenstra, director of Namaste, an AI expert, and product manager for Google Waymo, comments: "I am super excited for the talented team of Findify to join Namaste! Their leading machine learning models have already made Namaste much better at recommending the right products to our customers. And, even more importantly, we are thrilled to apply their deep AI expertise to cannabis. There are approximately 800 identified strains of cannabis each with hundreds of active ingredients, meaning each plant works differently for each person. Understanding which plant works for whom will be key in helping cannabis benefit everyone."
Sean Dollinger, president and chief executive officer of Namaste, comments: "We're very pleased to announce the acquisition of Findify. This is a very exciting opportunity for Namaste to forge new ground in the cannabis industry by introducing what we believe to be the most innovative technology for on-site personalization. Moving forward we believe global cannabis patients will demand a more customized on-line experience, as products and services in the cannabis industry continue to grow exponentially. Having worked with Findify as a client, we have witnessed excellent results through the implementation of their technology and believe strongly in the quality of their management team. Based on the success we have seen in the utilization of similar technology in other industries, we are extremely excited and optimistic to become the first company to introduce this incredible technology into the cannabis market and further enhance the on-line experience for cannabis patients.
"Our vision for the company in becoming a global leader in medical cannabis technology is evident from the addition of our new board members coming from Google and SpaceX, industry leaders in the areas of machine learning and AI that chose to join Namaste's team. Furthermore, this acquisition represents a major milestone for Namaste in solidifying itself as one of the most innovative technology companies in the cannabis industry."
About Findify AB
Findify is a leader in e-commerce machine learning applications, with over 1,200 customers in more than 60 countries around the world. Findify has developed a unique machine learning core that leverages user behaviour to personalize on-line experiences in real time. Findify's machine learning technology has been proven to deliver up to 27-per-cent uplift in conversion rate, and up to 30-per-cent uplift in revenue per user.
About Namaste Technologies Inc.
Namaste is the largest on-line retailer for medical cannabis delivery systems globally. Namaste distributes vaporizers and smoking accessories through 24 e-commerce sites in 20 countries and with distribution hubs located around the world. Namaste has majority market share in Europe and Australia, with operations in the U.K., Canada and Germany and has opened new supply channels into emerging markets including Brazil, Mexico and Chile. Namaste, through its acquisition of Cannmart Inc., a Canadian based late-stage applicant for a medical cannabis sales licence (under the ACMPR program) is pursuing a new revenue vertical in on-line retail of medical cannabis in the Canadian market. Namaste intends to leverage its existing database of Canadian medical cannabis consumers, along with its expertise in e-commerce to create an on-line marketplace for medical cannabis patients, offering a larger variety of product and a better user experience.
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