Why Digital Ally Shares Are Soaring Today

Author: Akanksha Bakshi | June 02, 2023 11:17am

Kustom Entertainment, Inc., a wholly-owned subsidiary of Digital Ally Inc. (NASDAQ:DGLY), has entered into a merger agreement with SPAC Clover Leaf Capital Corp. (NASDAQ: CLOE).
The agreement is for a $125 million equity value for Kustom Entertainment, Inc, which includes TicketSmarter and Kustom 440. Digital Ally will remain an independent public company following the merger.
The transaction is expected to create a publicly traded entity focused on live events and concert production to accompany TicketSmarter's ability to offer primary and secondary ticketing options.
Also Read: Digital Ally Clocks 25% Decline In Q1 Revenues On Weakness In Entertainment Segment
The proposed business combination is estimated to generate about $18.1 million in gross proceeds from the cash held in trust by Clover Leaf Capital, giving the combined company an indicated initial pro forma equity value of roughly $222.2 million.
The combined firm will be named Kustom Entertainment and overseen by Stanton E. Ross, the current CEO of Digital Ally.
Furthermore, Digital Ally will deliver to its shareholders 15% of the shares gained in Kustom Entertainment immediately following the merger's closure, with the remainder to be distributed after a six-month lock-up period.
Price Action: DGLY shares are trading higher by 17.8% at $4.68 on the last check Friday.