TicketSmarter Owner Kustom Entertainment Strikes $112 Million Deal for TFL

Kustom Entertainment has agreed to acquire ticketing technology and distribution company TFL in a $112 million deal, but completion of the transaction hinges on the TicketSmarter owner securing substantial additional financing in the coming weeks.

The agreement calls for $89.6 million in cash and $22.4 million in Kustom stock, with Kustom also required to repay $35 million of TFL debt at closing. SEC filings say Kustom does not currently have sufficient cash on hand or other immediately available funds to complete the purchase and plans to raise additional capital, including through a public offering.

Either side can terminate the agreement if the acquisition has not closed by October 15, although that deadline automatically extends by 15 days if Kustom files an S-1 registration statement for the contemplated financing before then.

The combination would bring together two ticketing companies that already have a significant commercial relationship. TFL’s e-commerce technology currently powers TicketSmarter.com, the secondary ticket marketplace owned by Kustom.

TFL also brings a wider business-to-business distribution network, technology relationships with teams and venues and its consumer-facing Tickets For Less marketplace. Kustom said TFL generated more than $238 million in revenue during 2025.

“The acquisition of TFL will be a transformational milestone for Kustom Entertainment as we build a fully integrated, end-to-end live entertainment ecosystem,” Kustom CEO Stanton E. Ross said in a release announcing the deal.

Ross said TFL brings “profitable growth, robust cash flows, and market-leading technology” to Kustom and pointed to the opportunity to combine its ticketing infrastructure with Kustom’s live-event production business.

TFL Adds Distribution to Kustom’s Ticketing Business

The acquisition would continue a yearslong transition for Kustom from the diversified company formerly known as Digital Ally into a business centered primarily on ticketing and live entertainment.

Digital Ally acquired TicketSmarter and Goody Tickets for approximately $14.1 million in 2021. The company subsequently formed Kustom Entertainment and Kustom 440 to develop and produce live events, with plans announced in 2022 to combine those operations with TicketSmarter.

Digital Ally formally changed its corporate name to Kustom Entertainment in January. It completed the sale of its legacy video-solutions business in August, leaving the publicly traded company focused on entertainment operations including TicketSmarter and Kustom 440, which produces the annual Country Stampede music festival.

TFL, meanwhile, has expanded well beyond the Tickets For Less consumer marketplace founded in 2004.

Tickets For Less and Ticket Solutions consolidated under the TFL name in 2023, bringing its consumer resale operation together with a business that supplies ticket distribution, e-commerce technology and services to teams, venues and other rights holders. At the time, TFL said its technology powered websites for more than 300 companies.

Kustom said TFL’s inventory distribution network and TFLConnect technology will give the combined company greater reach across professional and collegiate sports. It expects to integrate TFL technology across its festival business as well, including opportunities involving distribution and pricing.

TFL founder and CEO Dan Rouen said becoming part of Kustom would give the business access to additional capital and a public-market platform to pursue further expansion.

TFL’s executive leadership is expected to remain with the company under long-term employment agreements following the acquisition. The sellers will also have the right to designate one person to join Kustom’s board after closing, according to the purchase agreement.

Deal Includes Public Offering and Performance Holdback

Kustom’s SEC filings provide more detail about how the considerably larger transaction is expected to be financed.

Along with the $89.6 million cash component and $22.4 million in Kustom shares, the company has agreed to repay $35 million of TFL indebtedness at closing. That debt repayment will not reduce the stated purchase price, meaning the transaction requires substantially more cash at closing than the $89.6 million cash consideration alone.

Part of the equity consideration is also performance-based. Kustom will hold back $11.2 million worth of shares, with the amount ultimately issued tied to TFL’s adjusted EBITDA between the closing date and December 31, 2027. The agreement sets a cumulative target EBITDA of approximately $20.87 million for purposes of that calculation.

That figure is a contractual performance threshold governing the holdback rather than standalone annual EBITDA guidance for TFL.

The agreement also lays out the financing process Kustom expects to use to complete the transaction. Kustom disclosed that it does not presently have sufficient cash or immediately available funds to pay the purchase price and intends to obtain the necessary financing through a public offering.

Completion of that offering is expected to require shareholder approval to increase the number of common shares Kustom is authorized to issue. Obtaining sufficient financing and the required corporate approvals are among the conditions that must be satisfied before the acquisition closes.

Those provisions are notable in light of the size of the transaction relative to Kustom’s current reported operations, but they also provide a roadmap for how management intends to capitalize the acquisition rather than requiring the company to fund the purchase from its existing balance sheet.

Kustom reported $830,193 in cash and cash equivalents as of June 30, although that figure predates the August completion of the sale of its former video-solutions operation. That sale subsequently brought Kustom $1.25 million in cash along with a $4.25 million secured promissory note, preferred stock and potential additional earnout consideration.

For the first six months of 2026, Kustom’s continuing entertainment operation reported $8.59 million in revenue, up nearly 70% from $5.06 million during the same period a year earlier. TicketSmarter transaction growth helped service and other revenue more than double to $5.61 million.

The $238 million of 2025 revenue attributed to TFL in the acquisition announcement therefore suggests the target could substantially increase Kustom’s reported scale. A direct comparison between the two figures is limited, however, because detailed TFL financial statements have not yet been made public and ticketing businesses can recognize different revenue streams on either a gross or net basis.

Kustom, for example, records revenue from tickets it owns and resells on a gross basis, while service revenue from TicketSmarter marketplace transactions is recorded net of amounts owed to ticket sellers.

Kustom said it expects the TFL acquisition to be immediately accretive to consolidated revenue, earnings and adjusted EBITDA, citing TFL’s history of profitability and cash generation.

The company responded to questions from TicketNews about the financing and broader strategy by saying it could not comment beyond information already made public.

The acquisition remains subject to financing, shareholder approval and other closing conditions. Under the purchase agreement, either party can terminate the deal if it has not closed by October 15, although that deadline automatically extends by 15 days if Kustom files a Form S-1 registration statement for its contemplated financing before that date.