IRVINE, Calif. — WM Technology Inc., a leading technology and software infrastructure provider to the cannabis industry, has received a non-binding proposal, dated December 17, 2024, from Douglas Francis, a founder, chief executive officer, and chairman of the board of directors of WM Technology, and Justin Hartfield, a founder and stockholder of WM Technology, to purchase all of the outstanding common stock (Class A and Class V) of WM Technology not already beneficially owned by Francis and Hartfield. Francis and Hartfield currently beneficially own approximately 32 percent of the outstanding shares of WM Technology’s common stock.
Francis and Hartfield offered $1.70 per share.
The WM Technology board has formed a special committee consisting of disinterested and independent directors to consider the proposal. The special committee has retained Evercore Group LLC. as its independent financial advisor and Allen Overy Shearman Sterling US LLP as its independent legal advisor to assist it in considering the proposal.
The special committee is committed to acting in the best interests of WM Technology and all its stockholders. There can be no assurance that any definitive agreement will be executed, or that the proposed transaction or any other transaction will be approved or consummated. WM Technology does not intend to comment on or disclose further developments regarding the special committee’s consideration of the Proposal unless and until it deems further disclosure is appropriate or required.
No action is required by WM Technology’s stockholders at this time.
The proposal
December 17, 2024
Board of Directors
WM Technology, Inc.
41 Discovery
Irvine, California 92618
Dear Members of the Board of Directors:
We are pleased to submit this non-binding proposal to acquire all of the outstanding shares of common stock (Class A and Class V) of WM Technology, Inc. (“WM” or the “Company”) that we do not currently own (the “Transaction”) for $1.70 per share in cash (the “Offer Price”).
We firmly believe that our proposed Transaction is in the best interests of WM stockholders as well as all WM stakeholders, including its employees, clients, and end-users. Our proposal presents the Company’s public stockholders with a value-maximizing alternative to WM’s current strategic trajectory and an opportunity to de-risk their investment.
As Co-Founders and WM’s largest stockholders, we are deeply passionate about the Company and the licensed cannabis industry. When we first decided to take the Company public, there was an expectation that the tailwinds emerging in 2020-2021 across the licensed cannabis end-markets, coupled with the support of institutional public equity investors gained with a Nasdaq listing, would allow WM to capitalize on growth opportunities in an accelerated manner and create sustainable long-term stockholder value. Today, however, WM is facing significant headwinds, with licensed end-markets continuing to decline from the peak volumes achieved at the time of the Company’s deSPAC transaction in 2021. Further, the continued consolidation of cannabis retailers and brands among large multi-state operators, coupled with the increased entry of traditional technology providers into cannabis, are creating significant risks for WM’s current business model as a public company. Our proposal would provide public stockholders with immediate liquidity and certainty of value at a significant premium to current trading levels.
We have summarized the proposed terms of the Transaction below:
Offer Price
We are prepared to offer $1.70 per share in cash for all of the outstanding shares of common stock (Class A and Class V) of the Company that we do not currently own. This offer represents a substantial premium to relevant trading metrics, including:
- 39% premium to the closing price as of December 17, 2024,
- 52% premium to the implied Enterprise Value as of December 17, 2024,
- 65% premium to the volume-weighted average price (VWAP) in the last year.
Financing
As part of the Transaction, we would plan to roll 100% of our current equity interests in the Company, which account for approximately 32% of common shares outstanding. Since we filed an amendment to our Schedule 13D, we have engaged in discussions with financing sources who have spent significant time with us to understand WM and validate our thesis. We have received proposals from these potential financing partners and are highly confident in securing the debt and equity financing required for our proposal based on these conversations.
As we plan to secure fully-committed financing prior to signing a definitive agreement, the Transaction would not be contingent on financing.
Confirmatory Due Diligence
We have spent significant time and resources reviewing the publicly-available information on the Company as well as the diligence materials provided by the Company in preparing our offer, and will make further commitments of time and resources in order to consummate the Transaction expeditiously. Given our history with WM and the work that we have completed with our financing sources, we anticipate that their remaining confirmatory due diligence will be limited in scope and can be completed quickly.
Transaction Process
Our proposal will be conditioned upon (a) the approval by a Special Committee of the Board (after consulting with its advisors, provided the Special Committee is comprised of disinterested directors that are fully independent and empowered to consider our proposal) and, on the Special Committee’s recommendation, the full Board and (b) a fully-informed approval of the holders of a majority of the shares of the Company’s stock that will not be rolled into the Transaction.
If another potential buyer of the Company should submit a competing proposal, we would be willing to engage in discussions with such buyer in our capacity as stockholders of the Company. However, we have no intention to vote our stock in favor of any alternative or competing sale, merger or similar transaction involving the Company. Further, we think a competing proposal is highly unlikely now or in the future given the magnitude of the tax receivable agreement (TRA) payment that would be due in such a transaction, which is estimated to be over $100 million at our Offer Price.
We currently intend to remain stockholders of the Company if a potential transaction cannot be completed under the terms envisioned by our proposal.
Definitive Agreement
We anticipate that the definitive merger agreement, which will be negotiated on mutually-acceptable terms, will contain customary terms and conditions for transactions of similar size and nature. We expect to be in a position to execute a definitive agreement in 3-4 weeks.
Disclosure
In accordance with our legal obligations, we will promptly file an amendment to our Schedule 13D, including a copy of this letter.
Advisors
To assist us in consummating the proposed Transaction, we have engaged Jefferies LLC (“Jefferies”) as financial advisor, and Cadwalader, Wickersham & Taft LLP (“Cadwalader”) as legal counsel.
Our proposal is a non-binding expression of interest only and does not constitute an offer to purchase the Company or any securities or assets of the Company that is subject to binding acceptance. We reserve the right to withdraw or modify our proposal at any time. No legal obligation with respect to our proposal or any other transaction shall arise unless and until we have executed definitive transaction documentation with the Company.
We would welcome the opportunity to engage with you to further explain the merits of our proposal and work with the Board and Special Committee to explore a Transaction. To the extent you have any questions with regard to our proposal, please feel free to contact our advisors at Jefferies and Cadwalader.
Sincerely,
Doug Francis and Justin Hartfield
Co-Founders of WM Technology Inc.
About WM Technology
Founded in 2008, WM Technology operates Weedmaps, a leading cannabis marketplace for consumers, as well as a broad set of eCommerce and compliance software solutions for cannabis businesses and brands in U.S. state-legal markets. WM Technology holds a strong belief in the power of cannabis and the importance of enabling safe, legal access to consumers worldwide.
The Company is committed to advocating for full U.S. legalization, industry-wide social equity, and continued education about the plant through key partnerships and cannabis subject matter experts.
