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Electric Guitar PLC (LSE:ELEG), a digital marketing and advertising company specializing in first-party data solutions, has announced the agreement to acquire Mymyne Limited, a developer of data-related software and provider of associated sales and marketing services. This acquisition, conducted via a share-for-share exchange, is intended to enhance Electric Guitar’s software capabilities while realizing efficiencies and cost reductions.
Mymyne’s Background
Mymyne, established in 2019, specializes in marketing technology with a focus on data-related software solutions and related services. Its products include a website for first-party data collection, a segmentation tool known as Situational Targeting, and Peprr, a tool for web traffic and site optimization. As of the end of February 2024, Mymyne reported revenue of £95,000, an operating loss of £60,000, and net liabilities of approximately £52,000. Mymyne’s team comprises one employee along with several consultants and contractors.
Acquisition Justification
Prior to Electric Guitar’s acquisition of 3radical Ltd on 3 May 2024, Mymyne had been providing essential sales and marketing services to 3radical. The integration of Mymyne into Electric Guitar aims to streamline sales and marketing functions, which had been previously outsourced. This integration is expected to produce operational efficiencies and cost savings compared to maintaining the outsourced contract.
Additionally, the acquisition incorporates Mymyne’s intellectual property, which includes data collection and analysis tools that might benefit Electric Guitar’s overall business strategy. However, the potential value of this IP has not been quantified in the acquisition’s purchase consideration.
Acquisition Terms
The consideration for the acquisition is set at approximately £154,000, payable in two stages through the issuance of up to 21,026,186 new ordinary shares. The initial tranche of 9,834,521 shares is valued around £72,000 and will be issued upon completion of the acquisition. The remaining shares, to be issued in a year, are contingent upon specific conditions related to company performance and IP revenue generation. If Electric Guitar’s share price exceeds 2.4p, the number of deferred shares will be adjusted accordingly.
Shareholding Changes
Following the acquisition and the issuance of the Initial Consideration Shares, John Hutchinson and John Regan will hold specific percentages of Electric Guitar’s expanded share capital. Regan's and Hutchinson’s shareholdings will be subject to lock-up periods and orderly market conditions.
Operational Update
Since acquiring 3radical, Electric Guitar has focused on enhancing sales and marketing efforts, including hiring a new Managing Director for 3radical and improving sales approaches. New international collaborations with Digital Alchemy and Sophus3 have been established, expanding market presence and product offerings. The company has also formed a joint venture with Exelia Technologies to develop AI-driven marketing solutions.
