Digital Advertising Company System1 Gets SPAC Deal With Bill Foley: What Investors Should Know

A leading omnichannel customer acquisition platform announced a SPAC deal Tuesday with a well-known SPAC sponsor.

The SPAC Deal: System1 announced a SPAC merger with Trebia Acquisition Corp TREB. The SPAC is one of several launched by Bill Foley, who will join the board of directors upon closing of the merger.

The deal values System1 at an enterprise value of $1.4 billion.

Financing of $600 million for the SPAC merger includes an investment from Cannae Holdings Inc CNNE.

The deal is expected to close in the fourth quarter of 2021 with System1 trading under the ticker "SST" on the NYSE.

About System1: System1 provides an end-to-end responsive acquisition marketing platform (RAMP) for customers for its own products and advertising partners.

The company’s portfolio includes Mapquest, Info.com and Howstuffworks which get 27 million, 35 million and 10 million monthly visits, respectively. The company’s portfolio includes more than 40 digital properties that have over 120 million monthly visitors.

“System1 is differentiated in the digital marketing sector given its significant scale and diversification across the full spectrum of advertising verticals,” Foley said.

System1 also has over two million active subscribers, a service it plans on growing by acquiring customers through its existing businesses.

Related Link: Paysafe Goes Public Again In SPAC Deal: What Investors Should Know

Growth Ahead: Going public and the financing from the deal will help accelerate System1’s leading position as a privacy-centric digital marketer, provide capital to invest in its proprietary technology platform and help complete its acquisition of Protected.net, according to the company.

The U.S. digital advertising business was worth $150 billion in 2021 and is expected to grow to $278 billion in 2024, according to the company’s presentation.

Growth initiatives include expanding the company’s direct to advertiser business line and growing international revenue.

International revenue was $23 million in the first quarter of 2021, compared to $9 million in the prior year’s first quarter. International revenue was 12% of platform revenue in the first quarter of 2021 compared to 5% in the prior year’s first quarter.

Financials: System1 had revenue of $580 million in fiscal 2020. The company has projected revenue of $763 million in fiscal 2021 and $906 million in fiscal 2022. Compounded annual growth is estimated at 31% annually for System1 for fiscal 2018 to fiscal 2022.

System1 reported EBITDA of $80 million in fiscal 2020 and sees this figure growing to $120 million in fiscal 2021.

TREB Price Action: Shares are up 0.86% to $9.94 on Tuesday morning.