Pixel Interactive Media Ltd (AIM: PIXL), Asia’s leading online advertising sales network, is delighted to announce the completion of its acquisition of Easy Growth Limited (“Easy Growth”) and its wholly foreign owned subsidiary in China,. These companies will derive substantially all the economic benefits of the business operations of Share Freedom Wireless Co. Ltd (“Freedom”).
Acquisition highlights:
- Provides exposure to the fast growing Chinese online advertising and marketing industry and access to Easy Growth’s strong customer base
- Acquisition will be immediately earnings enhancing for the Group
- Adds industry renowned affiliate marketing business model to Pixel’s current service offering
- Acquisition enables cross-selling of products across Asian markets and clients
- The total consideration will be calculated at up to five times Easy Growth’s profit after tax for the year to 31 December 2007
As previously announced on 8 March 2007, completion of the deal was subject to certain technical conditions which have now been satisfied, including the set up of the wholly foreign owned entity (“WFOE”), and the transfer of employees, key assets and technology to Pixel.
Freedom operates an online marketing affiliate network in China which currently has over 1400 registered publishers. Freedom is based in Beijing, China, employs 16 people, and will offer Pixel entry to the Chinese online advertising market, which currently has an estimated value of over US$1.2billion.
As previously stated, the acquisition will immediately have a positive impact on Pixel’s earnings, as well as enhancing the Group’s service offering with the addition of the affiliate marketing business model.
The total consideration of the transaction will be calculated at up to five times Easy Growth’s consolidated profit after tax for the year to 31 December 2007. An initial payment of US$1.9million will be paid in stages throughout 2007, subject to performance milestones, and the remaining balance will be paid on performance for the year ended 31 December 2007. This will be paid up to 30 per cent in cash and at least 70 per cent in new ordinary shares.
Kevin Huang, CEO of Pixel, commenting on the agreement said: “We are delighted to have completed the transaction slightly ahead of schedule and we welcome the China team in joining Pixel. The acquisition has clear strategic importance as it marks our entrance into the Chinese market, as well as adding an internationally recognised online marketing business model to the services that we offer.”