Fobi AI (TSX-V:FOBI, OTCQB:FOBIF) Inc, which provides real-time data analytics through artificial intelligence, revealed that it has struck a share purchase agreement (SPA) with Portugal-based Passworks to acquire all its issued and outstanding shares for €400,000 (US$458,684) in an all-share deal.
Passworks is a leading European digital wallet and mobile marketing company with international clients such as luxury fashion house Hugo Boss, coupon giant Catalina Marketing Corporation and media giant Wunderman Thompson UK.
In a statement, Fobi founder CEO Rob Anson said: "The acquisition of Passworks, our fourth wallet pass acquisition in the past year, will further position us as a global wallet pass leader and gives us access to a number of key Tier 1 customers which will help drive immediate revenue and strengthen our brand."
READ: Fobi agrees to acquire leading European digital wallet and mobile marketing company Passworks
The company said the aggregate purchase price for the target shares will be €400,000 (US$458,684), payable by the issuance of that number of common shares of the company as is equal to a fraction, the numerator of which is the Canadian dollar equivalent of €400,000, calculated using the Bank of Canada daily exchange rate on the last business day before the date of the closing of the transaction, and the denominator of which is the greater of the 10 trading day volume-weighted average price (VWAP), and the lowest price permissible under the policies of the TSX Venture Exchange.
In addition to the initial payment shares, subject to standard regulatory approval at the time of issuance, on the achievement of certain revenue targets before the first anniversary of the closing date, Fobi has agreed to pay the vendor an additional €100,000 (US$114,675), in common shares of the company.
All consideration shares will be subject to a hold period of four months and one day from the date of issuance. They are subject to a contractual escrow, whereby, 20% of the consideration share will be released on the applicable date of issuance, 20% will be released three months from the applicable date of issuance, 30% will be released six months from the applicable date of issuance, and 30% will be released nine months from the date of issuance.
On the closing date, the company will lend the vendor the aggregate amount of €230,000 (US$263,762) in cash, for the vendor to use for the sole purpose of acquiring full interest and title to the target shares prior to the closing of the transaction.
Fobi said the parties to the SPA are not non-arm's length parties and there are no finder's fees payable.
Naturally, the closing of the transaction is subject to the approval of the TSXV.
The mobile wallet market, including payments, is tipped to grow to US$7.6 trillion in 2027 from US$1.04 trillion in 2019, representing a compound annual growth rate of 28.2%, according to a report by Allied Market Research.
“With the acquisition of Passworks, Fobi will increase its share of the large and growing global wallet pass market,” noted the company.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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