Franklin McLarty-led firm to lead public offering of vehicle protection plan merger

PayLink Direct and Olive.com, affiliated businesses and leaders in payment services and online vehicle protection plans, announced Wednesday (July 21) they will go public in a business combination with MDH Acquisition Corp., the Franklin McLarty-led special purpose acquisition corporation (SPAC) launched earlier this year.

A SPAC is a publicly-traded entity that makes investments to either bring private companies public or help scale private companies in a significant way with a certain degree of discretion and privacy.

The new public company, Olive.com, will be a combination of Olive.com’s digital vehicle protection plan platform and PayLink Direct’s payment services operation.

Vehicle protection plans cover mechanical failure of the vehicle after the manufacturer’s warranty has expired. Olive.com says its digital platform has created a wave of new consumer buyers to the vehicle protection plan market with over 59% of its customers being first time buyers.

PayLink Direct, founded in 2006 by CEO Rebecca Howard, has a 15-year track record of profitability and will become a division of Olive.com. The company continues to grow with over 345,000 new customers on the combined platform in 2020 and expects to have approximately 850,000 new customers by 2023.

Upon completion of the business combination, Howard will become CEO of the new public company and MDH’s McLarty will become its chairman. Upon the close of the proposed transaction, the combined company will be named Olive Ventures Holdings, Inc. and be called Olive.com. It will be listed on the New York Stock Exchange under the ticker symbol “OLV.”

The proposed transaction values Olive.com at an initial pro-forma enterprise value of approximately $960 million. Existing shareholders of PayLink Direct and Olive.com are expected to own approximately 74% of the equity of the new combined company following the consummation of the proposed business combination. The transaction, which has been unanimously approved by the Boards of Directors of PayLink Direct, Olive.com and MDH, is subject to approval by MDH’s stockholders and other customary closing conditions.

“We are excited about the next phase of our growth journey and could not have found a better suited partner for this public company journey than the exceptional MDH team,” Howard said. “We will continue our relentless focus on reaching consumers on their terms, and on serving vehicle owners and our valued business to business clients across the U.S. and Canada with our industry leading sales, marketing and payment solutions. We are growing our business by putting the needs of consumers first and empowering them to find affordable, transparent and user-friendly solutions for vehicle protection plans.”

“Earlier this year, we set out to find a profitable company in the U.S. Heartland that had unrecognized value, with room to grow, a world-class management team and leadership in a sector where MDH has deep expertise and relationships,” McLarty said. “We found each of these attributes in Olive.com.”

“Rebecca and her team have brought a highly differentiated offering to market and have already achieved tremendous success. The team has a significant addressable market and a material opportunity to more efficiently consolidate and service the space for years to come given the market megatrends. Olive.com operates in the automotive industry, an industry where my family has over 100 years of proven leadership experience, and we look forward to leveraging our knowledge and business expertise to support Olive.com’s continued growth. I’m honored to become chairman of this exciting growth company,” McLarty added.

MDH Acquisition Corp. went public on the New York Stock Exchange earlier this year. The initial IPO offered 27.6 million units at a price of $10.00 per unit, basically a $276 million launch. The stock trades under the symbol “MDH.”

Shares of MDH were trading in the $9.80-$9.85 range on Thursday. The company’s stock has traded between $9.60 and $9.90 per share since its IPO earlier this year.