Shares of Snipp Interactive (TSXV:SPN) are rising today after announcing the (U.S.) $8.5-million acquisition of Menlo Park, California-based Hip Digital Media.
The company’s management says that while the pickup offers growth, it brings little risk for investors.
“This acquisition supports our fundamental thesis that there is considerable opportunity for consolidation in the space, and we will continue to seek value-enhancing acquisitions like this one,” said CEO Atul Sabharwal. “This acquisition is expected to add to Snipp’s current margins, and could also contribute over $4-million of profitable revenue in the second half of 2015 and over $10-million in 2016. Further, nearly two-thirds of the consideration shares that are issuable as payment for this transaction are conditional on Hip meeting certain financial targets over the course of the next 12 months, thereby providing our shareholders with significant comfort and protection.”
Founded in 2007, Snipp provides multi-device brand loyalty and marketing programs to customers such as Smirnoff, Kingsford Charcoal, Kraft and Gerber. The company says its programs give brands valuable insight into the habits and preferences of its customers.
Snipp today also reported its Q1, 2015 results. The company generate revenue of $3.70-million, up 962% over the $349,082 topline it posted in the same period last year. The company did not include a profit and loss statement with the results.