SITO did not take on any of Hipcricket’s debt as part of the deal, but it did give the seller 6,205,602 shares of SITO Mobile common stock valued at $2.4 million and $1.3 million in cash, for a total purchase price of $3.7 million.
“This transaction marks the successful culmination of a process we began over a year ago,” says SITO Mobile CEO Jerry Hug. “It now provides us with our most coveted asset within Hipcricket, and represents a major growth catalyst for SITO Mobile in many ways.”
The acquisition has to feel pretty good for SITO, which was previously outbid for Hipcricket after the company went up for auction following several years of net losses. Despite their company’s rocky recent financial history, Hipcricket did generate nearly $30 million in revenue over the past 30 months, making it an attractive purchase.
Hipcricket and SITO have an interesting history.
After filing losses from 2012 to 2014, Hipcricket allowed SITO to make a stalking horse bid for $4.5 million before going up for auction. During the auction period, however, Hipcricket filed for Chapter 11 bankruptcy and allowed ESW Capital LLC to outbid SITO this past May.
In the end, SITO got the portion of Hipcricket it wanted most, along with many of its employees for less than they initially bid for the whole company.