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Quality Gold to Become a Publicly Traded Company Via Business Combination with Tastemaker Acquisition Corp.

The transaction will create a newly combined company named Quality Gold Holdings, Inc, which will be listed on Nasdaq under the ticker “QGLD.”

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(PRESS RELEASE) FAIRFIELD, OH — Quality Gold, Inc. and certain of its affiliates and subsidiaries (“Quality Gold” or the “Company”), a leading vertically integrated specialty logistics and jewelry distributor, and Tastemaker Acquisition Corp. (Nasdaq: TMKR), a publicly traded special purpose acquisition company led by co-Chief Executive Officers Dave Pace and Andy Pforzheimer, announced they have entered into a definitive agreement for a business combination that will result in Quality Gold becoming a public company. Upon closing of the transaction, the combined company will be named Quality Gold Holdings, Inc. and is expected to be listed on the Nasdaq under the ticker “QGLD.” The combined company will be led by Michael Langhammer, chief executive officer, and Jason Langhammer, chief operating officer.

Quality Gold is a leading, global, vertically integrated distributor with operations in the United States, Canada and India, supplying e-commerce platforms, independent jewelry retailers, both national and regional chains, and department stores. The Company has over 15,000 loyal retail partners, who rely on Quality Gold’s ability to supply over 165,000 products. Those retail partners have, on average, an approximate 17-year relationship with Quality Gold.

During its more than 40-year history, Quality Gold has developed a robust, efficient and tech-enabled infrastructure that has created a resilient operating model and deep competitive moat. The Company delivers exceptional value to its e-tail and retailer partners through proprietary sourcing, logistics, distribution, and drop shipping capabilities with no minimum order quantities. Quality Gold enjoys deep relationships with more than 400 strategic suppliers globally and has demonstrated significant efficiencies with ~78% of orders automated. The Company’s product offerings consist of approximately 165,000 SKUs across major categories, and along with its strategic supplier offerings, the Company maintains a robust product development pipeline. Quality Gold also has a proven track record of strategic M&A activity, successfully completing 12 add-on acquisitions since 2012 while maintaining consistent growth across economic cycles, outpacing the industry.

Key Investment Highlights

  • Leading jewelry distributor with consistent growth outpacing the industry
  • Vertically integrated, global business with significant barriers to entry
  • Premier tech-enabled logistics and fulfillment capabilities
  • Exceptional and consistent financial performance across economic cycles
  • Highly diversified across SKUs, product lines, customers, suppliers and sales channels
  • Impressive acquisition track record with 12 successful transactions closed since 2012
  • Leadership team with extensive industry experience
  • Significant near-term growth opportunities with existing and new partners

Highlights of the Proposed Transaction

  • Quality Gold, Inc. is a leading distributor to the jewelry market in the U.S. with a 40-year track record of profitable growth including record FY2022 performance with revenue of $534mm and adjusted EBITDA of $82mm (fiscal year ended March 31, 2022)
  • Quality Gold is a vertically integrated global business with significant barriers to entry; the company has generated consistent financial performance across economic cycles through significant diversification across SKUs, product lines, customers, suppliers and sales channels
  • The combined company enterprise valuation is expected to be $989 million; the combined company will continue to be led by Michael and Jason Langhammer and current senior management
  • Proceeds of the transaction, including the non-redeemed portion of the $279 million cash-in-trust of Tastemaker Acquisition Corp., are expected to strengthen Quality Gold’s strategic growth initiatives, including targeted M&A; Quality Gold successfully acquired and integrated 12 companies since 2012
  • The transaction does not have a minimum cash condition and is expected to close in the first quarter of 2023

Management Commentary

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“We are thrilled to partner with Dave, Andy and the rest of the best-in-class team at Tastemaker, who are seasoned operators and directors of listed companies, as we become a publicly traded company,” said Michael Langhammer. “With the overwhelming support of our loyal and expansive customer base, Quality Gold has built a premier distribution business with a proven track record of success spanning more than four decades. With the resources provided through the transaction and those that will be available to us as a public company, we will be able to continue to build out our product offerings, deepen our retailer relationships, and further fuel our robust acquisition strategy as the highly fragmented jewelry industry naturally consolidates.”

“We are excited to take this major step forward in becoming a publicly traded company,” said Jason Langhammer. “Our decision to go public is intended to supercharge Quality’s Gold’s growth as the premier jewelry logistics and distribution provider. We have built a business that is well diversified across products, suppliers and customers, has proven to be incredibly stable, and is poised for strong future growth. We look forward to propelling our profitable business to new heights in the public markets.”

“Quality Gold is uniquely positioned as a vertically integrated supplier with significant barriers to competitive entry, reinforced by its innovative technology-enabled logistics and distribution capabilities,” commented Dave Pace. “Michael, Jason and the rest of Quality Gold’s executive leadership team have unrivaled expertise in the jewelry industry and created a sustainable business model that has consistently generated increasing revenues and EBITDA across various economic cycles. Now, with access to the public markets, they are poised to build upon their already impressive industry-leading position.”

“Tastemaker was formed to identify an exceptional company with a significant competitive moat and trajectory for growth, and we believe we have found that in Quality Gold,” said Andy Pforzheimer. “The revenue and product diversification, consistent financial performance and track record of successful acquisitions offer an exciting platform for growth, and their 40-year history demonstrates that this is a real, profitable and sustainable business. We are thrilled to be a part of this exciting next chapter of growth for Quality Gold as it becomes a public company and continues to serve the jewelry industry and deliver value to all stakeholders.”

Transaction Overview

The transaction brings Quality Gold, a premier jewelry logistics and distribution provider, into the public markets to execute on its next phase of growth. Existing Quality Gold equityholders will retain ~94%1 of the combined company’s pro forma equity. The transaction implies a pro forma enterprise value for Quality Gold of $989 million. The Company will use the proceeds raised during the transaction for general corporate purposes and to enable continued strategic acquisitions.

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The Boards of Directors of Quality Gold and Tastemaker have unanimously approved the transaction. The transaction, which does not have a minimum cash condition, will require the approval of Tastemaker stockholders, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. It is expected to close in the first quarter of 2023.

Additional information about the proposed transaction, including a copy of the business combination agreement and an investor presentation, will be provided in a Current Report on Form 8-K to be filed by Tastemaker with the U.S. Securities and Exchange Commission and will be available on the Tastemaker and Quality Gold websites as well as at sec.gov.

A pre-recorded investor presentation will also be available on the Tastemaker and Quality Gold websites.

Advisors

Stifel is acting as financial advisor and Cowen and Craig-Hallum are acting as capital markets advisors to Tastemaker. RKCA is acting as financial advisor to Quality Gold. DLA Piper LLP (US) and Ellenoff Grossman and Schole are acting as legal advisors to Tastemaker. Frost Brown Todd LLC is acting as legal advisor to Quality Gold. Mintz is acting as legal advisor to Stifel, Cowen and Craig-Hallum. Grant Thornton is Quality Gold’s auditor, and Cohn Reznick provided accounting and tax advisory services to Tastemaker.

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