TORONTO—Constellation Software Inc. and its subsidiary Lumine Group Inc. have announced they have entered into a binding agreement to acquire WideOrbit, which is a major supplier of ad management software to broadcast stations, networks and other media outlets in the U.S.
Constellation also announced plans to spin off its Lumine Group subsidiary. Once that transaction is completed, WideOrbit will become a wholly owned subsidiary within Lumine Group and operate as an autonomous business unit within the Lumine Group’s portfolio of companies.
“Today’s news marks the next step in Lumine Group’s journey towards building the world's leading network of communications & media software companies,” explained David Nyland, CEO of Lumine Group. “Since our inception, our focus has been on building a strong market share within the telecommunications industry, and today we proudly count industry-leading companies within our portfolio of companies. WideOrbit will accelerate Lumine Group’s expansion into the media space, bringing a wealth of domain knowledge, an experienced leadership team, and a customer ecosystem we look forward to continue serving. We are excited to dive deeper into the media space during this period of rapid innovation, and partner with WideOrbit to assist us in navigating the ecosystem and pursuing further acquisitions.”
“Lumine Group is the ideal partner to support WideOrbit’s continued growth ambitions,” added Eric Mathewson, founder and CEO of WideOrbit. “Our partnership with Lumine will build on our 23-year legacy and contribute to a stronger future for the company, our employees, and our valued clients. At a time when the media advertising landscape is evolving and generating more demand, the timing could not be more optimal. I look forward to what the future holds for WideOrbit and Lumine Group.”
The companies said that WideOrbit had an annual gross revenue in 2021 of about $167 million and that it employs approximately 450 employees.
The acquisition of WideOrbit is currently expected to close in Q1 2023, subject to the satisfaction of certain closing conditions.
Under the proposed deal, Constellation will remain the majority shareholder of Lumine Group and will distribute to the current Constellation shareholders, pro rata and by way of a dividend-in-kind, nominal value subordinate voting shares of Lumine Group, the company said.
The spin-off and listing are subject to the approval of the TSX Venture Exchange and acceptance of a final prospectus by the Canadian securities regulatory authorities.
The purchase of WideOrbit will be financed with funding from Constellation and a banking partner. Consideration for the purchase will be in the form of a cash payment plus the issuance to eligible WideOrbit shareholders of 13.83% of the shares of Lumine Group (on a fully diluted basis), Constellation said.
