Xigem Technologies (CSE:XIGM, OTCQB:XIGMF) Corporation, a tech provider for the remote economy, revealed that it has signed a definitive asset purchase agreement with 2747524 Ontario Inc, operating as Cylix Data Group (CDG), a business intelligence firm, for its previously announced acquisition of the assets of CDG, for around C$32.35 million.
The Toronto-based technology company signed the definitive agreement on January 7, 2022. “Formal closing of the transaction is expected to occur by or around January 21, 2022,” said the company.
Cylix Data is a business-to-business intelligence technology company which has software that boosts efficiency and productivity for executives by giving them information at their fingertips to help key decision-making and risk-management. The proprietary database of over 74 million data points has been pulled from both third-party vendors and internally originated sources.
READ: Xigem Technologies eyeing completion of Cylix Data Group acquisition before the year-end
"We are very pleased to have executed the definitive asset purchase agreement as we near the completion of this vital acquisition. We expect Cylix to deliver significant value to both our shareholders and our customers," Xigem co-founder and CEO Brian Kalish said in a statement.
"The integration of Cylix with our existing technologies will create a powerful platform capable of providing businesses with comprehensive customer information that can be a source of competitive advantage."
Xigem plans to operate Cylix as a stand-alone business unit, with Cylix later becoming the unifying platform supporting the company's other core technologies. The integrated offering will provide users of Xigem's iAgent software-as-a-service (SaaS) based CRM platform and its FOOi payment platform with “instant access” to information about current and potential customers and business partners, said Xigem.
“The information can be used to assist in allocating resources while also mitigating fraud risk in payment transactions,” said the company.
Once integrated, Xigem's new technology is expected to create a robust platform to capitalize on the Big Data market, it added. The global market for Big Data was estimated at US$70.5 billion in 2020, and is projected to touch US$243.4 billion by 2027, spurred by the pandemic, according to Research and Markets.
Transaction details
Following the agreement, the company has agreed to purchase all the assets of CDG for C$32.35 million, consistent with the binding letter of intent executed on October 29, 2021. The company will issue 64.70 million units at a price of $0.50 per unit, with each unit comprised of one share and one-seventh of one common share purchase warrant.
Meanwhile, each warrant entitles the holder to acquire one additional common share at a price of $0.60 for a period of 24 months. The securities issued under the transaction are subject to contractual restrictions on trading, such that 50% may not be traded until six months after the closing, and the remaining 50% may not be traded until 12 months after the closing.
Before closing the deal, the recipients of the units, comprised of the shareholders of CDG, will strike support and voting agreements with Xigem, following which the recipients will agree to vote any shares that they then hold in favour of any matter put forth to the shareholders of Xigem by its then-current board for a period of two years, subject to early termination in certain circumstances.
In addition, on closing Xigem and an entity controlled by one of the principals of CDG will enter into a management agreement, under which the manager will fund $500,000 towards completion and commercialization of the next generation Cylix technology; fund additional development costs associated with Cylix; and substantially manage the operations of the Cylix business on behalf of Xigem.
The company will appoint a nominee of CDG to its board of directors and may also appoint an observer.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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