Augme Technologies, Inc., a company that provides strategic services and mobile technology to consumer and healthcare brands, has announced that it has completed the acquisition of essentially all of the assets and the business of Hipcricket Inc., a leader in mobile marketing and advertising based near Seattle, Washington.
The purchase price, amounting to $44.5 million, was comprised of $3 million in cash, a $1 million promissory note, $2 million to be paid to Hipcricket option holders, which amount Augme may pay at its discretion in either Augme common stock or cash, and $38.5 million in Augme’s common stock. Also, the transaction calls for a twelve-month earn-out payment to Hipcricket employees and shareholders that is valued up to $27.5 million, which may be paid out in cash or Augme’s common stock at Augme’s dicretion provided that the transaction remains a tax-free organization. Augme anticipates retaining all of the employees at Hipcricket, and the current team at Hipcricket will continue to service Hipcricket’s customers.
Earlier on this summer, Hipcricket reached an industry-leading milestone by hosting its 130,000th campaign. The company had managed over 30,000 campaigns in 2011 by utilizing a broad range of mobile communications platforms, which include SMS, MMS, CRM, mobile-social programs, mobile coupons, QR codes, branded applications, mobile web, and various other platforms for clients such as Macy’s, MillerCoors, Nestle, KFC, and Clear Channel.
The activity pace for Hipcricket has steadily increased since the company powered its very first campaign back in 2004. Hipcricket developed and executed 17,000 campaigns in the first half of 2010 and nearly doubled that number for the first half of 2011. This year, the company is recording double-digit percentage month-over-month growth in the number of campaigns that are processed each month. Hipcricket’s Mobile Advertising Network has been used by companies in more than 15 industries, with a main focus on quick-service restaurants (QSR), travel, retail, technology, and consumer packaged goods (CPG).
Augme believes that, as a result of the acquisition of Hipcricket, it can count itself as the preeminent leader in end-to-end mobile marketing solutions for consumer brands, agencies, and pharmaceutical/health and media companies. The combined companies’ client roster includes more than 300 total clients, which include: ten of the world’s top twenty pharmaceutical companies, six of the biggest media companies in the world, four of the biggest advertising agencies in the world, three of the leading quick service restaurant groups in the world, and one of the largest food companies in the world.
“We believe that the acquisition of Hipcricket will allow Augme to provide the most powerful best-of-breed mobile marketing and advertising solutions to global brand name leaders, backed by strong intellectual property portfolios that include patented technology and software-as-a-service (‘SaaS’) technology platforms,” noted Paul Arena, Chief Executive Officer of Augme Technologies, Inc. “Additionally, Hipcricket’s revenues for the twelve months ended July 31, 2011approximated $9.4 million on which it earned a 67% gross profit margin.”
In recent months, Augme believes that is has significantly expanded and brought strength to the capabilities of its industry-leading management team. Paul Arena still remains Chief Executive Officer of Augme, while Hipcricket’s founder and Chief Executive Officer, Ivan Braiker, has been appointed as President and joins Augme’s Board of Directors. Jim Crawford has stepped down as director of the Company, but remains Augme’s Chief Information Officer. Eric Harber, President and Chief Operating Officer of Hipcricket, joins Augme’s management team as Chief Operating Officer. Phillip Rapp, who previously served as Chief Operating Officer of Augme, has become Executive Vice President of Strategic Planning. Succeeding Augme’s acquisition of JAGTAG last month, the former CEO of that company, Ed Jordan, was appointed Chief Financial Officer of Augme.
“This well-rounded senior management team has more than 200 years of combined experience in brand marketing, social media, Internet, telecommunications, advertising, customer relationship management technology and data analytics in a number of industries that are relevant to Augme’s strategic business objectives,” added Arena.
Ivan Braiker is an innovator in the field of integration of new and traditional media and harbors more than 30 years of executive management experience in broadcasting and media. Eric Harber is a veteran of mobile and software with a vast amount of experience in general management, strategy, M&A, product development, sales and marketing that has given him a reputation for driving revenue growth, building effective teams and managing change in dynamic environments for companies at their various stages of growth.
“As the mobile marketing industry matures, we believe companies that can provide a comprehensive array of effective mobile solutions built upon robust technology platforms and best-of-breed strategic services will become increasingly attractive partners for global, national and regional brand-name leaders,” continued Paul Arena. “By positioning itself to become the preeminent one-stop mobile marketing and advertising provider, we believe that Augme is ideally positioned to take advantage of these industry trends.”
“We expect the combined company to continue to innovate and deliver powerful mobile marketing tools and campaigns to all of its existing customers, including over 50 Fortune 500 and Global 500 companies, and to future customers seeking best-in-class solutions and results,” observed Mr. Braiker.
For more information on Augme Technologies, Inc. visit their company website at http://www.augme.com
Let us hear your thoughts below: