In a disclosure filed after the stock market closed, Xurpas said it has signed an agreement to purchase 100% of Art of Click Pte. Ltd. (AOC) from its CEO Emmanuel Michel Jean Alix and private equity firm Wavemaker Partners.
Singapore-based Art of Click specializes in mobile media advertising and has created a proprietary, next generation ad optimization platform for advertisers. Xurpas acquires AOC for a sum of US$45 million and it says this acquisition will help lift its revenues and profits. This deal will also prove effective in accelerating development and expansion of its mobile consumer business.
Xurpas will pay for the acquisition using cash and the company’s shares in four tranches in the next three years. The first payment was made on Thursday, $2.79 million in cash and $14.82 million worth of Xurpas shares to Alix, $2.2 million in cash to AOC and $4.62 million worth of Xurpas shares to Wavemaker. The following tranches will be paid in Xurpas shares, it will apply for the listing of the shares with the Philippine Stock Exchange. Since deal partly involves Xurpas shares, the company said it also signed a subscription agreement for issuance of the shares to Alix and Wavemaker Partners.
The company said in a statement,
In the event the value of the Xurpas shares applied for listing based on the 30-day weighted average is lower than the value of the Xurpas shares on listing date, Xurpas shall pay (Mr. Alix) cash, and Wavemaker Xurpas shares, which will be subject to additional listing. This shall apply to the first and second tranche share payments and deferred purchase consideration payments.
Art of Click’s platform effectively supports both client brands and global and regional communication agencies in the development and execution of mobile strategies in markets such as South Korea, Japan, Hong Kong, Taiwan, Southeast Asia, North America, and Europe. Its revenue rose by 315% to S$2.3 million from the year before to S$15.4Mn in FY16 with a net profit of S$2.3 million.
Nix Nolledo, Chairman and CEO of Xurpas, excited about the acquisition, commented in a statement,
We are thrilled to find innovative companies exceedingly complementary with our business. We believe that Art of Click is a perfect match for our mobile consumer services, and that growth prospect excites us.
Founded in 2011, AOC’s widely successful mobile campaign platform is designed to maximize mobile app monetization. In contrast to traditional mobile advertising, which simply delivers impressions or views to advertisers without measuring whether those impressions and views translate into actual revenue.
Its action based performance advertising platform means advertisers only pay for users’ measurable actions, whether that means installing a game, signing up for a service, or making a purchase. This allows Art of Click to closely track how their advertising campaigns translate into actual revenue, ultimately resulting in lower customer acquisition cost and maximized customer lifetime value for its clients.
Raymond Racaza, President and COO of Xurpas, said,
Our main growth driver is largely mobile consumer services. Since our IPO, we have strategically invested in companies that will boost our content offering for the mobile subscriber. We love the fact that Art of Click has the capability to tremendously enhance this core business unit. Right now, we are developing revolutionary mobile consumer platforms that integrates our various investments. Our investment in Art of Click couldn’t have come at a more perfect time.