NEW YORK--(BUSINESS WIRE)--FORM Holdings Corp. (NASDAQ:FH), a diversified holding company focused on acquiring and developing small to mid-market companies with growth potential, today announced that it has entered into a definitive agreement to acquire 100% of XpresSpa, the industry-leading luxury airport spa business. The transaction will be funded with common and preferred equity and warrants in FORM Holdings. In addition, XpresSpa’s indebtedness will remain outstanding following the closing of the transaction. The transaction structure maintains FORM Holdings' strong liquidity position and provides current XpresSpa equity holders an interest in the continued success of the business and FORM Holdings' portfolio of assets.
XpresSpa provides air travelers premium health and wellness services, as well as a branded line of exclusive luxury travel products and accessories at its 51 locations across 21 major airports. In 2016, XpresSpa anticipates generating over $40 million of revenue and approximately 20% store level margin contribution. XpresSpa has approximately three times as many domestic stores as its closest competitor and is expected to open several new locations through the remainder of 2016 and early 2017. XpresSpa anticipates increasing its number of total spa locations from 51 to more than 100 in the next few years.
"XpresSpa's dominant market share, enormous growth potential and its powerful brand present a compelling value proposition for us, and we are excited to work with CEO Ed Jankowski and his team,” said Andrew D. Perlman, Chief Executive Officer of FORM Holdings. "This acquisition fits with our strategy and mission to identify and acquire small to mid-sized companies that would benefit from additional capital, management expertise and the implementation of best practices across various components of their business. We believe that by working closely with these businesses, as well as the flexibility afforded by our holding company structure and access to capital, we will be able to realize value for our shareholders by accelerating XpresSpa's growth."
"We're thrilled to announce this transformative transaction with FORM Holdings," said Ed Jankowski, Chief Executive Officer of XpresSpa. "XpresSpa and its more than 750 employees have proudly revolutionized the airport experience for millions of travelers by providing wellness and relaxation offerings. We have experienced and continue to experience significant growth and momentum, and we look forward to leveraging FORM Holdings' resources to execute on opportunities that will enable us to further grow our business by delivering an exceptional experience to our customers."
Mr. Jankowski, who brings more than 30 years of retail experience, is expected to continue to lead the XpresSpa business as CEO after the transaction closes.
Mistral Equity Partners, the majority shareholder of XpresSpa, and other existing XpresSpa holders, will participate in a private placement into FORM Holdings common stock of $1.73 million, at $2.31 per share, which FORM Holdings will then invest in XpresSpa.
XpresSpa equity holders will receive 2.5 million shares of common stock in FORM Holdings, five-year warrants to purchase 2.5 million shares of FORM Holdings common stock, at an exercise price equal to $3.00 per share, and $23.75 million of FORM Holdings’ newly issued convertible preferred stock. The FORM Preferred Stock shall be initially convertible into an aggregate of 3.95 million shares of FORM Common Stock, which equals a $6.00 per share conversion price, and each holder of FORM Preferred Stock shall be entitled to vote on an as converted basis.
Andrew Heyer, CEO of Mistral and an experienced investor with expertise in the retail sector, is expected to join FORM Holdings' Board of Directors upon completion of the transaction. Mr. Heyer stated, "Spa offerings have become must-haves in the increasingly upscale airport retail space, and XpresSpa is the clear market leader. FORM Holdings' acquisition presents a unique opportunity for us to continue to participate in and guide XpresSpa's growth. We believe that FORM Holdings' acquisition of XpresSpa will create significant value."
The transaction, which has been approved by FORM Holdings' and XpresSpa's respective Board of Directors, is expected to close in the fourth quarter of 2016, subject to closing conditions and approval by the FORM Holdings’ stockholders.
About FORM Holdings Corp.
FORM Holdings Corp. (NASDAQ:FH) is a publicly held diversified holding company that specializes in identifying, investing in and developing companies with superior growth potential. FORM's current holdings include Group Mobile, FLI Charge, Infomedia and Intellectual Property Assets. Group Mobile is a provider of rugged, mobile and field-use computing products, serving customers worldwide. FLI Charge designs, develops, licenses, manufactures and markets wireless conductive power and charging solutions. Infomedia is a leading provider of customer relationship management and monetization technologies to mobile carriers and device manufacturers. FORM Holdings' Intellectual Property Division is engaged in the development and monetization of intellectual property. To learn more about Form Holdings Corp., visit:www.FormHoldings.com.
About XpresSpa
XpresSpa is the industry-leading luxury travel spa business, serving almost 1 million air travelers each year at its 51 locations across 21 major airports, including locations in Amsterdam's Schiphol and Dubai's International airports. XpresSpa offers travelers premium spa services, including massages, reflexology, stress and tension release, manicures, pedicures, facials and waxing. Its Xpress nail, massage and hair blow-out services are designed specifically for the busy traveling customer, with treatments completed in 30 minutes or less. In stores and online, XpresSpa also offers exclusive luxury travel products and accessories, including travel pillows, blankets, massagers, and personal, hair, nail and bath and body products. XpresSpa has over 750 employees, including talented teams of professionally licensed massage therapists, cosmetologists and nail technicians who are committed to providing exceptional customer experiences.
