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Upland Software Announces Acquisition of Waterfall International and Raises 2017 Guidance

"Upland Mobile Messaging is now the industry leader in engaging prospects, customers, and communities with compelling mobile content at an enterprise scale," said Jack McDonald, Chairman and CEO of Upland Software. "This combination provides Upland with an unparalleled feature-set that delivers value and deep services expertise to organizations in retail, consumer packaged goods, media and entertainment, healthcare, government, and advocacy."

"We look forward to delivering continued value to Waterfall customers through our commitment to 100% customer success," said Jed Alpert, SVP/GM of Upland's Digital Engagement product family. "Upland Mobile Messaging is the leading end-to-end, enterprise-grade mobile messaging platform. Robust capabilities include smart campaigns, natural language-based messaging, and multi-channel communications across Facebook Messenger, Android RCS messaging, mobile wallet, and SMS/MMS."

The purchase price paid for Waterfall was $24.4 million in cash at closing, net of cash acquired, and a $1.5 million cash holdback payable in 18 months (subject to any indemnification claims). The foregoing excludes any potential future earn-out payments tied to additional performance-based goals. Upland expects the acquisition to generate annual revenue of approximately $9.0 million, subject to reductions for a deferred revenue discount as a result of GAAP purchase accounting. The acquisition is within Upland's target range of 5-8x pro forma Adjusted EBITDA and will be immediately accretive to Upland's Adjusted EBITDA per share.

Business Outlook

Upland today also announced that it has raised its full year 2017 guidance to reflect the Waterfall acquisition, raising revenue, recurring revenue, and Adjusted EBITDA guidance ranges. The increase in 2017 revenue guidance below is net of an estimated $0.6 million reduction for a deferred revenue discount as a result of GAAP purchase accounting and all guidance adjustments are prorated for an effective closing date of June 30, 2017.

For the full year ending December 31, 2017, Upland expects reported total revenue to be in the range of $91.2 to $95.2 million including recurring revenue in the range of $80.0 to $83.0 million, for growth in recurring revenue of 24% at the mid-point over the year ended December 31, 2016. For the full year ending December 31, 2017, Adjusted EBITDA is expected to be in the range of $28.0 to $31.0 million, for an Adjusted EBITDA margin of 32% at the mid-point, representing growth of 134% at the mid-point over the year-ended December 31, 2016.The transaction will be immediately accretive to Upland's Adjusted EBITDA per...


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