J2 Global (JCOM) to Separate Into Two Leading Publicly Traded Companies

April 19, 2021 4:00 PM EDT

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J2 Global, Inc. (NASDAQ: JCOM), a leading internet information and services company, today announced its plan to separate the company into two independent publicly traded companies – J2 Global and Consensus – through a spin-off of at least 80.1% of the outstanding shares of Consensus common stock to J2 shareholders. The separation is expected to be completed in the third quarter of 2021. Upon completion of the transaction, shareholders will own two category-leading independent public companies, each well positioned for long-term success and superior value creation. J2 will host a live audio webcast and conference call led by members of the management team to discuss the transaction on April 20, 2021, at 8:30 a.m. Eastern Time (details below).

J2 Global

J2 will continue its strategy of building a leading internet platform focused on key verticals, including technology & gaming, shopping, health, cybersecurity and SMB. J2 provides trusted content and applications; has a leading programmatic acquisition system; and an established track record of growth. Pro forma for the transaction, J2 is expected to have revenue of between $1.297-$1.334 billion in 2021 (per prior guidance) and a run-rate Adjusted EBITDA margin of approximately 35%1. At the closing of the transaction, J2 is expected to have moderate leverage, providing the financial flexibility to support its growth with organic investment and M&A.

Consensus

Consensus intends to leverage its position as a leading provider of secure data exchange, focused primarily on the healthcare sector, to create an end-to-end solution addressing healthcare interoperability. The business will primarily comprise the Cloud Fax business that is currently part of the Cloud Services division of the company. The Cloud Fax business that Consensus will own is embedded in the healthcare ecosystem and is well positioned to capitalize on the large and growing market opportunity to provide interoperability among disparate systems and workflows, thereby increasing worker productivity, reducing costs, and delivering better patient care. Pro forma for the transaction, Consensus is expected to have revenue of between $333-$342 million in 2021 (per prior guidance) and a run-rate Adjusted EBITDA margin of approximately 55%1. Its financial strategy will be to deploy its strong free cash flow in support of its organic investment plans and de-levering.

Vivek Shah will remain Chief Executive Officer of J2, while Scott Turicchi, J2’s current President & Chief Financial Officer, will become the Chief Executive Officer of Consensus.

Vivek Shah stated: “This is an exciting day for J2’s employees, shareholders, customers, and other key stakeholders. This transaction will create two leading independent public companies. With distinct management teams, capital structures, and strategic focus, each company should be very well positioned to create enduring value. I am also very pleased that Scott Turicchi, my long-term partner at J2, will become the CEO of Consensus at the closing of the transaction.”

Scott Turicchi stated: “Today marks an important milestone that underscores the value we are creating in our Cloud Fax business. In recent years, we have seen an acceleration in growth and opportunity for our secure data exchange business, which is now positioned to be a leader in the race to address healthcare interoperability. Along with my colleagues at Consensus, I am excited for this next chapter and look forward to our future success.”

Transaction Details

J2 intends to distribute at least 80.1% of the outstanding Consensus shares to J2 shareholders on a pro rata basis in a distribution intended to be tax-free to J2 and its shareholders. At the time of the spin-off, J2 intends to retain up to a 19.9% interest in Consensus and divest that interest over time in a tax-efficient manner.

Completion of the spin-off will not require a shareholder vote but will be subject to customary closing conditions, including final approval by J2’s Board of Directors, receipt of a private letter ruling from the Internal Revenue Service addressing certain aspects of the spin-off, a tax opinion, and the effectiveness of a Form 10 registration statement with the U.S. Securities and Exchange Commission. No assurances can be made that the transaction will occur, regarding the form that the transaction may take or the specific terms or timing of the spin-off.

Advisors

Citi is acting as exclusive financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to J2.

Webcast and Conference Call

J2 will host a live audio webcast and conference call led by members of the management team to discuss the transaction on April 20, 2021, at 8:30 a.m. Eastern Time. Members of the public, the press, the financial community, stockholders and other interested parties are invited to join via webcast at www.j2global.com or via telephone by dialing (844) 985-2014 (U.S.) or (973) 528-0116 (International). In addition, the call will be available by webcast, accessible through the J2’s Investor Relations page at http://investor.j2global.com/. The webcast will be archived for playback on that same site. Questions for the conference call will be taken via email at investor@j2.com and can be sent any time prior to or during the Webcast. Materials presented during the call will be posted on the Company's web site at www.j2global.com and furnished as an exhibit to the Company’s 8-K filed with the Securities and Exchange Commission pursuant to Regulation FD in connection with J2's announcement.



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