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Legacy Acquisition Corp. (LGC) to Combine with Blue Impact

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Legacy Acquisition Corp. (LGC) to Combine with Blue Impact

Aug 23, 2019 INTEL by Kristi Marvin

Legacy Acquisition Corp. (LGC), announced this morning that it has entered into a definitive share exchange agreement with the Blue Impact group business — a digital-first, global advertising and marketing services group (the “Blue Impact business”), a subsidiary of Blue Focus Intelligent Communications Group (“BFICG”),  LLC.

Headquartered in Mountain View, California, the Blue Impact business portfolio of assets consists of digital, media, social, creative and data analytic advertising and marketing assets and agencies that serve both global blue chip and digital-disruptor clients.

The Blue Impact business consists of:

  • Vision 7, headquartered in Canada, a fully integrated marketing communications platform consisting of owned, paid, earned and shared media services. Vision7 consists of several leading agencies including The Camps Collective, Citizen Relations (including The Colony Project), Cossette Communications, Eleven LLC, Gene Global, K72, The Narrative Group, and Vision7 Media (including Cossette Media, Impact Research, Jungle & Magnet).
  • We Are Social, headquartered in the United Kingdom, a global social creative agency specializing in shared media in 11 countries including Australia, China, the United Arab Emirates, France, Germany, Italy, Japan, Singapore, Spain, the United Kingdom and the United States.
  • Fuseproject, headquartered in San Francisco, a fully integrated product design agency with capabilities spanning strategy, branding, industrial design, user experience design, activations and environmental design.
  • Metta, headquartered in Hong Kong (HK), China, a large full-service marketing agency in HK.
  • Madhouse, headquartered in Shanghai, a leading mobile-focused paid media and performance platform in China. It is one of the major outbound providers for Chinese brands to market their products and services outside of China.

Post-closing, the Blue Impact business will be led by Brett Marchand as CEO, with Holly Zheng as Chairwoman of the post-acquisition Blue Impact Board. Holly Zheng is a board director of BFICG, the Chairwoman of the International Business Management Committee and the President of BFICG’s international business. Brett Marchand is currently the CEO of Vision7. He has more than 30 years of experience in marketing and advertising and has served in key roles within the Vision7 agencies for over fourteen years. He worked as a marketer at Procter & Gamble, Campbell Soup and Molson Coors before his move into advertising and marketing services. Darryl McCall, President and COO of Legacy, is expected to be a Blue Impact director. Richard White, a director of Legacy, is also expected to be a director of Blue Impact.

  • The Blue Impact business serves the high growth advertising and marketing service sub-sectors, particularly mobile, social and data/analytics
    • The Blue Impact business has posted 3-year revenue and Adjusted EBITDA growth of 18% and 29%, respectively. (Industry forecasters expect 15% 2018-2021 global CAGR.)
  • The Blue Impact business serves over 3,000 clients across North America, Europe and Asia-Pacific, with 2500+ employees.
  • 63% of revenues derived from digital marketing activities


Under the terms of the definitive share exchange agreement, at closing, the selling entity will receive 30 million shares of Class A common stock of Legacy, and Legacy would assume $40 million of net debt related to the Blue Impact business and $48 million of deferred acquisition purchase price obligations.

In addition, up to $222 million may be payable after the 2022 audit is complete in the form of an incentive-based earn-out tied to average profit growth of the Madhouse business over the three-year period ending December 31, 2022.


Earnout tied to the profitability of Blue Impact’s subsidiary, Madhouse. Total earnout is capped at $222.0 million and is payable in 2023 following the Fiscal 2022 audit.

Total earnout payment is payable at purchaser’s option in cash, stock, or combination thereof if Share Price is >$10.00.  If share price is not above $10.00, then dependent on available cash, the payment will be in cash or subordinated notes

  • Based on the average annual growth rate of Madhouse’s Adjusted EBITDA during the 3-year performance period of 2020, 2021, and 2022 (starting with the 2019 Adjusted EBITDA
    • <5% = no earnout payment
    • 15% = $100 million
    • > 25% = $222 million


  • No surrender of sponsor shares and warrants


  • Wells Fargo and GP Bullhound are serving as financial advisors to Legacy.
  • PJT Partners is advising the Blue Impact business.
  • Wells Fargo Securities, LLC, Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company are serving as capital markets advisors to Legacy.
  • DLA-Piper (US) LLP is serving as legal advisor to Legacy.
  • O’Melveny & Myers LLP and Greenberg Traurig LLP are serving as legal counsel for Blue Valor and BFICG.



Legacy and Blue Impact will host a joint investor conference call to discuss the proposed transaction on August 23, 2019 at 11 AM ET.

Interested parties may listen to the call via telephone by dialing

  • 1-877-407-0789 (Domestic)
  • 1-201-689-8562 (International).

A telephone replay will be available from 2:00 pm ET on Friday August 23, 2019 to 11:59 pm ET on Friday September 6, 2019 and can be accessed by dialing:

  • 1-844-512-2921 (Domestic) or 1-412-317-6671 (International)
  • pass code: 13693935

The conference call webcast and a related investor presentation with more detailed information regarding the proposed transaction will be available in the Investor Information section of the Legacy website at

Quick takes:  Blue Impact at first blush looks like an interesting company.  It’s a “marketing services company of the future” with an emphasis on digital advertising with a global footprint and backed by BFICG, which is rolling 100% of its equity. The growth look pretty good as well and there is a real incentive with the earnout based on three years EBITDA growth rate.  However, Legacy’s sponsors purchased warrants at $0.50 at their IPO, which means the Sponsors have 17,500,000 outstanding warrants and none are being forfeited in the transaction. If we include the public warrants, that means there will still be 47,500,000 warrants outstanding (the warrants are one warrant to purchase 1/2 share). That’s a substantial overhang. Plus, Legacy is still keeping the 7,500,000 founder shares.  It would have been preferable to see some of that trimmed back. As a result, while Blue Impact has some possibility as a public company, they may need to restructure this to make it palatable to investors.