Xigem Technologies (CSE:XIGM, OTCQB:XIGMF) Corporation said it has signed a binding letter of intent (LOI) to acquire the assets of business intelligence company Cylix Data Group in an all-stock deal valued at about C$32.4 million.
Cylix, which has been operating for nearly three decades, has generated average annual revenues in excess of C$1.7 million and earnings before interest, taxes, and amortization (EBITDA) of over C$800,000.
“The acquisition of Cylix will be transformative for Xigem, both in scale and in the growth opportunities it creates,” Xigem Technologies (CSE:XIGM, OTCQB:XIGMF) CEO Brian Kalish said in a statement.
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“We are pleased to continue to execute our strategy of adding innovative technologies to our portfolio through a combination of research, development and acquisition,” Kalish added.
The company noted that Cylix, following the integration of Xigem's iAgent CRM platform and FOOi payment app, will compile comprehensive customer information to assist in allocating resources while also mitigating fraud risk in payment transactions.
The C$32.4 million purchase price will be satisfied by the issuance of 64.7 million Xigem units at a deemed price of $0.50 per purchaser unit, with each purchaser unit comprised of one common share of the company and 1/7 of one common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share of Xigem at a price of $0.60 for a period of 24 months.
Xigem also said it will appoint a nominee of Cylix to its board of directors, and will also appoint another nominee of Cylix as an observer to its board of directors.
It added that principals of Cylix will maintain an active role in the business and will provide a cash investment of $500,000 into Cylix upon closing of the transaction to fund the completion of the development of its next-generation technology.
The transaction is expected to close on or about November 30, 2021.
Xigem Technologies (CSE:XIGM, OTCQB:XIGMF) powers technology for the near trillion-dollar remote economy that businesses around the globe are embracing in a post-coronavirus pandemic economy. Its Software-as-a-Service (SaaS) technology platform, iAgent, provides organizations, businesses and consumers with the tools necessary to support remote working and learning.
Xigem's software improves the capacity, productivity, and overall remote operations for businesses, consumers and other organizations.
Contact Sean at sean@proactiveinvestors.com