Emerge (ASX:EM1) to expand into new locations with VAS business’ acquisition

November 13, 2022 07:00 AM AEDT | By Sonal Goyal

Emerge (ASX:EM1) to expand into new locations with VAS business’ acquisition — Image source: © Scyther5 | Megapixl.com

Details of the purchase agreement

Emerge Gaming entered into a binding purchase agreement to buy VAS business for a consideration of AU$650,000. Seventy five percent of the payment will be made in cash, and 25% will be paid in performance-based deferred consideration shares.

The deferred consideration shares will be issued to Australian Content Management after the VAS business reports over AU$660,00 of audited revenue from the existing partnership agreements.

After the completion of the transaction, the existing CEO of Mobimedia, Todd Emanuelli, will become the CEO of Emerge Gaming’s subsidiary company, StreamPlay Studio Pacific Pty Ltd. The new subsidiary will be incorporated to manage the VAS business.

The rationale behind the acquisition

The acquisition of the VAS business would expand Emerge’s MNO partnerships into Indian Ocean territories and countries. The transaction is expected to expand the company’s footprint outside of South Africa by taking advantage of the VAS business partnerships.

In addition to this, the transaction would generate new revenue streams for Emerge Gaming which would complement the existing streaming and gaming technology of the company, said Emerge.

What has been acquired by Emerge Gaming?

According to the ASX announcement, the acquired VAS business comprises software systems, all intellectual property, the website and its related contents, contact numbers, passwords, contact email addresses, data and any other asset linked with the VAS business.

All arrangements and contracts which are related to the operations of the VAS business, for example, partnership agreements with MNOs.

The acquired business includes all product content, mobile billing, media marketing technology platforms and mJams music.

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