SITO Mobile Ltd. (OTCBB:SITO) To Purchase Assets From Hipcricket Inc

SITO Mobile Ltd. (OTCQB:SITO), a leading name in mobile engagement platform providers, said that it has signed a asset purchase deal with Hipcricket Inc., for $4.5 million in cash. As per the deal, it will acquire all of the assets of Hipcricket.

Hipcricket posted revenues of $26.7 million for the fiscal ended February 28, 2014. The mobile engagement and analytics firm has got twenty-one U.S. patents covering technology inventions.

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Full Acquisition

Jerry Hug, the CEO of SITO Mobile, said that if the transaction is approved, the company will transform into one of the largest company in the field of mobile advertising and marketing. Last year was a transformative year for SITO Mobile during which the company posted 27% YOY revenue growth. It entered into strategic financing plans with Fortress Investment Group. Also, it completed the acquisition of DoubleVision Networks in 2014. Hug said that the company is well poised for expansion and growth in 2015. The acquisition of Hipcricket is in line with the growth plans which will not bolster the company’s services but also enhance the revenue from the customer base.

Employees Retained

As per the agreement, SITO Mobile will retain all of the employees of Hipcricket. It will also provide support and services to existing clients of HIpcricket after the closing of the deal. Todd Wilson, the CEO and Chairman of Hipcricket, will be a part of SITO Mobile management team during the transition period of six to twelve months.

Bankruptcy Bailout

On January 20, 2015, Hipcricket submitted an appeal for relief in the Bankruptcy Court to facilitate the agreement. The transaction can complete only when the Bankruptcy Court accepts the petition of Hipcricket and gives its approval. The deal contains the preliminary “stalking-horse bid” in the auction process. It is subject to better and higher offers. Hipcricket has also received the debtor-in-possession financing from SITO Mobile to support its ongoing activities during the bankruptcy.

Technicals

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In the period of 2010-2012, a large and sharp correction took Sito Mobile Ltd (OTCBB:SITO) to the lows of $0.20 levels from the heights of $1.60, a huge depreciation. This correction was followed by a bounce back to $0.90 levels before the bears took control again. In the last few weeks though, the bears have failed to push the price below the 2012 low and the last weekly candle looks bullish enough. A successful break above $0.40-50 levels would enable the bulls to take the stock much higher in the coming days.

About the Author

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.

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