The target company provides a complete marketing package including digital signage and advertising content to a number of niche markets.
Tomizone offers an extensive suite of managed services, encompassing wi-fi and analytics, business cloud applications, VoIP, data redundancy and business security.
Potential to expand beyond New Zealand
The media company has the ability to expand its full suite of products into the Australian market.
Tomizone’s strategy is to integrate products and services to a growing client base.
In keeping with this plan, the company will look to introduce the product offering to existing and new clients in Australia in the short term via its digital signage sales division.
Positive underlying earnings impact in 2019
The company under consideration is expected to generate revenues of less than $1 million for the 2019 financial year.
Management expects that it will have a small positive impact on underlying earnings and cash flow in that year.
However, additional substantial value will occur for Tomizone by offering this service to its customers and by consolidating this business into its digital signage division.
The business includes an existing base of installed digital signs and a customer base of advertisers.
Increase in installed screen base
The company under consideration has a scalable business model and an increase in the installed screen base will lead to large additional revenue streams for Tomizone.
Payment for the transaction will be share-based and it is expected to involve an initial payment at the time of settlement based only on the value of the assets.
The transaction is subject to due diligence and any required shareholder or regulatory approvals.
It is anticipated that the transaction will settle within the current quarter as there are immediate opportunities that would add value to Tomizone in the short term.