LONDON (Alliance News) - Mobile advertising platform Taptica International Ltd on Monday said it will accelerate the earn-out payments for AreaOne Ltd after AreaOne performed well under Taptica's ownership since the acquisition last year.
Taptica confirmed that it will be pay the total USD17 million for its acquisition of AreaOne. It already paid USD9.3 million in cash upon the closing of the transaction in September, as well as USD2 million through the issue of shares.
A further two deferred payments of USD1.5 million in shares were also to be made subject to the satisfaction of certain performance criteria on the first and second anniversaries of the closing of the transaction, along with two USD1 million cash payments.
Taptica said that as AreaOne has performed well since acquisition, it will pay the two USD1 million cash payments now rather than on the first and second anniversaries. It has also decided to pay the two USD1.5 million share payments in cash instead of through shares, and will pay an additional USD2 million in cash for the shares held in escrow after exercising its option to accelerate the earn-out payments.
Taptica said the integration of its and AreaOne's technologies completed ahead of schedule, creating a single solution that optimises marketing campaigns for advertisers across mobile and social media channels.
The acquisition has enabled Taptica to provide more services to its clients, as well as giving it an initial footprint in China, which Taptica said has had better-than-anticipated results.
As a result of the synergies gained, AreaOne is now expected to make a greater contribution to Taptica's profit than initially expected, the company added.
"We are pleased to see the better-than-expected performance of AreaOne and the success of its integration. This, combined with our previously-announced strong cash generation, leads the board of directors to believe that the exercise of this option, which accelerates the completion of the acquisition, represents good value for the company and is in the best interests of shareholders," Chairman Tim Weller said in a statement.
Shares in Taptica were trading up 5.7% at 76.60 pence on Monday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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