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IMImobile PLC ("IMImobile" or the “Company" or the “Group")
Acquisition of the trade and assets of Sumotext Corporation and
Trading Update
IMImobile, a cloud communications software and solutions
provider, is pleased to announce that it has agreed to acquire the
trade and assets of the Sumotext Corporation ("Sumotext"), an
established US based communications platform provider (“the
Acquisition”). The consideration, will be between $4.5 million and
$6 million, depending on EBITDA performance of the acquired
business during the first 12 months following the Acquisition.
Sumotext helps brands, agencies and non-profit organisations
communicate and complete commercial transactions with mobile
audiences via SMS and MMS. The Acquisition is therefore
complementary to both IMImobile’s product set and customer base.
Management believes that this strategic acquisition provides a
platform to launch IMImobile’s product offering to the enterprise
market in the US. As a result of the Acquisition the Company
expects to make significant investment in sales and marketing
expenses for the US market during the current year and that the
Acquisition will be earnings enhancing in the year ending 31 March
2019. Highlights: Acquisition
• Sumotext is an experienced business in the US communications
platform market and has various clients made up of a government
agency, travel companies, retailers, healthcare companies and other
brands, agencies and non-profit organisations.
• Sumotext’s customer and product portfolio is complementary to
existing IMImobile products and solutions, providing significant
cross-sell and up-sell opportunities.
• This Acquisition is aligned with pursuing IMImobile’s broader
strategic plan to enhance its position in the US market.
• The Acquisition is expected to enhance Group earnings during
the year ending 31 March 2019.
Trading update
• Trading for the six months ended 30 September 2017 in line
with directors’ expectations.
• Significant investment of approximately £0.5m in sales and
marketing activities in the second half of the current financial
year to take advantage of market opportunities for cloud messaging
product portfolio
• Current year revenue and gross profit expected to be above
market expectations.
Commenting on the Acquisition Jay Patel, Chief Executive Officer
of IMImobile said: "The acquisition of Sumotext strengthens our
position in the US communications software market. The Sumotext
team is experienced in selling and delivering business critical
communication solutions to a number of leading US brands. This
acquisition provides a strong platform for growth into the
enterprise market in North America.”
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Background to and reasons for the Acquisition Sumotext is an
established and leading provider of messaging solutions in the US,
based in Little Rock, Arkansas. The Acquisition enhances
IMImobile’s position in the US market and consolidates its
footprint within the region. The US market is competitive, and the
experienced team at Sumotext will provide valuable expertise as
well as an established customer base made up of a government
agency, travel companies, retailers, healthcare companies and other
leading brands, agencies and non-profit organisations. A key
attraction of the Acquisition for IMImobile was the experience and
skills of the founder of Sumotext, Tim Miller, who has agreed to
join the Group as a member of the senior management team, and will
maintain leadership of the Sumotext business. The Acquisition is
complementary to IMImobile’s product set, providing mobile
solutions that enable businesses to manage digital interactions
with their customers. As a result of the Acquisition we see many
opportunities for growth in the US region and we will work to use
the Sumotext business to penetrate the enterprise market, and
expect it to be earnings enhancing during the year to 31 March
2019. Trading update The Board is pleased to provide the following
trading update ahead of the Company’s interim results announcement
on 21 November 2017. The first half of the year has seen trading in
line with management expectations, with good overall organic gross
profit growth. The Board remains confident about the Group’s
prospects for the remainder of the year and expect underlying
revenue and gross profit to be ahead of expectations. We see many
opportunities for further growth, particularly in the enterprise
market in the US and UK. Following the Acquisition, in order to
capitalise on product leadership and market opportunities,
IMImobile intends to increase sales and marketing expenses in the
second half of the current financial year by approximately £0.5m,
the benefits of which we expect to be realised in the financial
year ending 31 March 2019. Prior to this planned investment
underlying EBITDA for the full year was expected to be in line with
expectations. This announcement contains inside information as
stipulated under the Market Abuse Regulations (EU) no. 596/2014
(“MAR”)
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For further information please contact: IMImobile PLC Jay Patel,
Chief Executive Officer Mike Jefferies, Chief Financial Officer
c/o Redleaf Communications Tel: +44 (0) 207 382 4769
Redleaf Communications - PR adviser Charlie Geller Alina
Haritonova
Tel: +44 (0) 207 382 4769 [email protected]
Investec Bank - Nominated Adviser and Joint Broker Henry Reast
Robert Baker
Tel: +44 (0) 207 597 5970
Whitman Howard - Joint Broker Ranald McGregor-Smith Francis
North
Tel: +44 (0) 207 659 1234
About IMImobile PLC IMImobile is a cloud communications software
and solutions provider that enables companies to use mobile and
digital technologies to communicate and engage with their
customers. Organisations that trust us to deliver smarter digital
customer engagement solutions include Vodafone, Telefonica, Aircel,
Capita, BT, BSNL, Ooredoo, MTN, France Telecom, Centrica, Pizza
Hut, Tata, the AA, the BBC, EE, Multichoice, Betfair and several
major financial institutions. IMImobile is headquartered in London
with offices in Hyderabad, Atlanta, Dubai and Johannesburg and has
over 950 employees worldwide. IMImobile PLC is quoted on the London
Stock Exchange's AIM market with the TIDM code IMO.