Press release

Spark Unlocks Path to $50MM Adjusted EBITDA in 2020 as It Achieves Final Regulatory Step Necessary to Close Its Acquisition of Zoosk

Sponsored by Businesswire

Spark Networks SE (NYSE American: LOV) (“Spark”), a leading global
dating company, today announced that after a hearing before the
California Commissioner on June 17, 2019 (the “California Fairness
Hearing”), the California Department of Business Oversight issued a
permit to Spark to allow it to issue securities in exchange for the
outstanding securities of Zoosk, Inc. (“Zoosk”) in connection with
Spark’s previously announced proposed acquisition of Zoosk. The Zoosk
acquisition – expected to close on or around July 1st,
subject to the satisfaction of customary closing conditions – will make
Spark North America’s second-largest dating company. Based on the
identified synergies and the current financial trajectory of the two
companies, Spark expects to achieve over $50 million of Adjusted EBITDA
in 2020, or nearly $2 per share assuming Spark’s post-merger share
count. The California Fairness Hearing marks the second and last major
milestone in the successful completion of the Zoosk acquisition, a move
that will solidify Spark’s leadership position in the dating industry.

Spark’s focus has long been to create shareholder value through product
and operational excellence, cost efficiency, and market disruption, and
the acquisition of Zoosk will further support this multi-brand,
multi-geography strategy.

“Within the limits of applicable law, we have been working with Zoosk
for the past months to validate synergy opportunities via expense
reductions and marketing efficiencies, while exploring the opportunity
to quickly launch new products and further expand our platform’s reach
in 2020 and beyond. Both companies are eager to put the planning into
action,” said Jeronimo Folgueira, CEO of Spark. “We feel very confident
about our 2020 Adjusted EBITDA target of over $50 million given the
preparation that has been done to date, which we believe will deliver
substantial shareholder value,” Jeronimo added.

Steven McArthur, CEO of Zoosk, added: ‘’With Spark’s focus on cost
efficiency, a stable scalable platform, and a unified management and
strategy, Spark has an exciting period ahead to deliver shareholder

Rob O’Hare, the Chief Financial Officer of Spark, will move to San
Francisco post-closing to ensure a smooth transition, and will continue
to serve as the Company’s CFO while also leading the integration of
Zoosk. Additionally, Herbert Sablotny, Spark’s former Chief Strategy
Officer, will rejoin the Company to assist in the Zoosk integration
efforts, having previously supported the integrations of Attractive
World and Spark Networks, Inc. The Company is also delighted to have
secured the support of Yopeso, a trusted technology partner for both
established companies and startups, that will provide low-cost,
effective technology support to minimize integration risk.

Key members of the Zoosk team are also expected to remain with the
Company for a longer transition period to secure a smooth integration.
Additionally, at the time of this press release, the requisite Zoosk
stockholders have approved the transaction.


Networks SE
is a leading global dating company listed on the New
York Stock Exchange American under the ticker symbol “LOV”. The
Company’s widening portfolio of premium and freemium dating apps include EliteSingles,
, eDarling,
and SilverSingles,
among others. The planned acquisition of Zoosk
is expected to make Spark the second largest dating company in North
America upon closing. Spark believes that the acquisition will provide a
two-fold increase in scale, with monthly paying subscribers topping one
million globally.

Written requests should be directed to:
Spark Networks SE
Zoosk Acquisition
Kohlfurter Straße 41/43
Berlin 10999

Non-IFRS Financial Metrics

Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, share-based compensation, impairment of
intangibles, and non-recurring costs. Adjusted EBITDA is not a measure
defined by IFRS. The most directly comparable IFRS measure for Adjusted
EBITDA is net (loss)/profit for the relevant period. This measure is one
of the primary metrics by which Spark evaluates the performance of its
businesses, budget, and forecast and compensates management. Spark
believes this measure provides management and investors with a
consistent view, period to period, of the core earnings generated from
ongoing operations and excludes the impact of items that Spark does not
consider representative of its ongoing operating performance, including:
(i) non-cash items such as share-based compensation, asset impairments,
non-cash currency translation adjustments, (ii) one-time items that have
not occurred in the past two years and are not expected to recur in the
next two years, including severance, transaction advisory fees, and
integration costs, and (iii) discontinued operations. Adjusted EBITDA
should not be construed as a substitute for net loss (as determined in
accordance with IFRS) for the purpose of analyzing Spark’s operating
performance or financial position, as Adjusted EBITDA is not defined by

Spark’s Adjusted EBITDA expectation for the combined company in 2020
does not include certain charges and costs. The adjustments to EBITDA in
these periods are generally expected to be similar to the kinds of
charges and costs excluded from Adjusted EBITDA in prior quarters, such
as (i) non-cash items such as stock-based compensation, asset
impairments, non-cash currency translation adjustments related to an
inter-company loan and (ii) one-time items that have not occurred in the
past two years and are not expected to recur in the next two years. The
exclusion of these charges and costs in future periods will have a
significant impact on the combined company’s Adjusted EBITDA. Spark
Networks SE and Zoosk are not able to provide a reconciliation of this
non-IFRS financial guidance to the corresponding IFRS measure without
unreasonable effort because of the uncertainty and variability of the
nature and amount of these future charges and costs.

Forward Looking Statements:

This press release contains “forward-looking statements” as defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Exchange Act. All statements in this press release other than
statements of historical fact are forward-looking statements. These
forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause Spark Networks SE’s or
Zoosk Inc.’s or the combined company’s actual performance or
achievements to be materially different from those described in the
forward-looking statements. Forward-looking statements speak only as of
the date they are made, and Spark Networks SE assumes no duty to update
any forward-looking statements. We caution readers that a number of
important factors could cause actual results to differ materially from
those expressed in, or implied or projected by, such forward-looking
statements. Such forward-looking statements include, but are not limited
to, statements using forward-looking terminology such as “will” and
“expect,” statements about the benefits of the business combination to
the existing brand portfolio and our positioning in the online dating
market, statements about the size of combined company and the number of
monthly paying subscribers of the combined company, statements about the
ability to deliver increased scale, grow profitability and drive
meaningful margin expansion as a result of the planned completion of the
acquisition, and other statements that are not historical facts. The
following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: (i) the
possibility that the proposed transaction does not close when expected
or at all because certain conditions to closing are not satisfied on a
timely basis or at all; (ii) changes in Spark Networks SE’s share price
before closing, including as a result of the financial performance of
Spark Networks SE or Zoosk Inc. prior to closing, or more generally due
to broader stock market movements, and the performance of peer group
companies; (iii) the risk that the benefits from the transaction may not
be fully realized or may take longer to realize than expected, including
as a result of changes in general economic and market conditions,
interest and exchange rates, monetary policy, laws and regulations and
their enforcement, and the degree of competition in the geographic and
business areas in which Spark Networks SE and Zoosk Inc. operate; (iv)
the ability to promptly and effectively integrate the businesses of
Spark Networks SE and Zoosk Inc.; (v) diversion of management time on
merger-related issues; and (vi) other risks that are described in Spark
Networks SE’s public filings with the SEC. For more information, see the
risk factors described in Spark Networks SE’s Annual Report on Form 20-F
and other subsequent filings with the SEC.

Additional Information About the Acquisition and Where to Find It:

The parties intend that Spark Networks SE will issue Spark American
Depositary Shares representing Spark Ordinary Shares in the transaction
in reliance upon an exemption from registration provided by Section
3(a)(10) of the Securities Act of 1933, as amended Stockholders of Zoosk
are advised to read the important information about the transaction and
details about the fairness hearing, including a formal notice of the
hearing, that has been published and made available to Zoosk
stockholders in accordance with Section 25142 of the California
Corporations Code. The information statement, fairness hearing notice,
and other relevant materials (when they become publicly available) may
be obtained free of charge by contacting Spark Networks SE at
This communication does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities.