Pryor Cashman Represents Paltalk in Merger With SNAP; Combined Company Will Deliver “Next Wave” Live Video Platform
On September 14, 2016, it was announced that A.V.M. Software, Inc. (d/b/a Paltalk) – one of the world's largest collections of video-based communities – would merge with Snap Interactive, Inc. (“SNAP”) as part of a strategy to become the leading platform connecting global users with common interest categories and online dating via real-time video and chat technology.
The merger – which closed on October 7, 2016 – was structured as a tax-free stock-for-stock transaction. As part of the deal, Paltalk merged into a wholly-owned subsidiary of SNAP, with former Paltalk shareholders owning a majority of SNAP's outstanding common stock on a fully-diluted basis.
Paltalk/SNAP Merger Will Yield "Next Wave" Video Chat Platform
Transaction highlights include:
- a combined user database of over 250 million registered users;
- greater scale and diversification, with eight products and combined annual revenues estimated at approximately $30 million;
- a global video communication network of social apps spanning chat and dating;
- pioneering products in the rapidly-evolving sphere of live video;
- a vast, international database ripe for cross-selling opportunities;
- a “next wave,” disruptive product incorporating online dating and real-time video;
- a public vehicle with potential to execute additional acquisitions of companies in the $4 billion interactive dating industry; and
- IP licensing opportunities related to Paltalk’s 25 issued patents, which have generated tens of millions of dollars of licensing revenue.
In a recent statement, Paltalk’s current CEO remarked, “Paltalk has had a successful track record of M&A, with strategic acquisitions underlying four of the company's key products: Camfrog, Tinychat, Firetalk and Vumber, as well as IP acquisitions. As we look ahead to the merger with SNAP, the increased scale and liquidity of the combined company will enable it to grow organically and potentially through further acquisitions.” Pryor Cashman advised Paltalk on many of these previous acquisitions, as well.
The Pryor Cashman Team
Representing Paltalk in this deal were Pryor Cashman Partners Eric Woldenberg and Eric Hellige, along with Counsel Michael Campoli and Associate Sarah Walton - all of whom are members of the firm's nationally-recognized Corporate Group.
Additionally, Partner Edward Rayner - Chair of the firm's Executive Compensation, ERISA + Employee Benefits Group - and Counsel Matthew Young negotiated the employment agreements on behalf of Paltalk, and structured the compensation arrangements for optimal tax treatment.
More About Pryor Cashman's M&A Practice
To learn more about the firm’s work in mergers and acquisitions, please visit our M&A practice page.
