Brisio Innovations (BZI-CSE) March 18, '14 has entered into a non-binding letter of intent dated March 14, 2014, to acquire up to 100 per cent of the issued and outstanding securities of OakBranch Media Inc. and its underlying assets. OakBranch is an integrated media company with its main assets being the Good e-Reader website, a leading website specializing in e-reader, e-book and digital publishing news, which has over 230,000 unique visitors per month; and the Good e-Reader app store, which, with over 35,000 apps, 420,000 unique visitors and seven million page views per month, is the largest independent Android and BlackBerry alternative app store in Canada. OakBranch also operates its own video studio and YouTube channel, which receives over 320,000 views per month.Transaction structure
Under the terms of the LOI, Brisio will undertake the transaction on the following terms:
- In consideration for aggregate cash payments of $130,000 to be paid by Brisio to OakBranch upon the achievement of certain milestones by OakBranch to be determined by Brisio and specified in the definitive agreement to be entered into between Brisio and OakBranch with respect to the transaction, Brisio will acquire securities of OakBranch, of a class to be determined and specified in the definitive agreement, sufficient to give Brisio a 30-per-cent voting and equity interest in OakBranch.
- OakBranch will grant Brisio an option that will expire one year from the date of closing of the definitive agreement to acquire additional securities of OakBranch, of a class to be determined and specified in the definitive agreement, sufficient to give Brisio an additional 19.9-per-cent voting and equity interest in OakBranch, bringing Brisio's total interest in OakBranch to 49.9 per cent, exercisable upon: (i) the issuance by Brisio to OakBranch of 250,000 common shares of Brisio, and (ii) the payment of $75,000 by Brisio to OakBranch.
- OakBranch will cause each of the shareholders of OakBranch to grant Brisio a right of first refusal to acquire the remaining 50.1 per cent of the outstanding voting and equity interests of OakBranch from time to time from the OakBranch shareholders on terms to be specified in the definitive agreement.
Completion of the transaction is subject to a number of conditions, which will be further specified in the definitive agreement, including satisfactory completion of due diligence by Brisio on OakBranch and receipt of the approval of the Canadian Securities Exchange (CSE) for the transaction.
Paul Andreola, president and chief executive officer of Brisio, stated: "This transaction denotes another significant opportunity for Brisio to grow its scope of business by moving into the highly valued app store space. OakBranch has substantial reach, and a loyal and growing following, which we believe can be highly leveraged and of significant value to Brisio in the future, and can provide us with the opportunity to own a major stake in an established player in the lucrative app store market."
There has been a dramatic rise in the cost per installation for mobile applications developers over the last several years. This rising cost has increased the demand for new mobile app discovery systems. This demand is highlighted by some of the industry transactions of the last year. In February, 2014, Sungy Mobile acquired independent app store Getjar, and in July, 2013, Baidu purchased independent app store, 91 Wireless, for $1.9-billion. Based on information compiled by Moby Affiliates, over 2.5 billion mobile apps are downloaded per month from alternative app stores around the world. According to One Platform Foundation, "Submitting your app to alternative app stores will increase expected downloads for your app by more than 200 per cent in reference to Google Play only."
Michael Kozlowski, chief executive officer of OakBranch, stated: "We are excited to work with Brisio. There is a great deal of synergy between our two companies, and their assistance will help greatly in allowing OakBranch and Good e-Reader to execute on a number of exciting opportunities."
About OakBranch Media
Established in 2008, OakBranch owns and operates the Good e-Reader website and Web store, and the Good e-Reader app store. Good e-Reader is a leading provider of e-book, e-reader, tablet and Slate personal computer news. With tens of thousands of mobile apps available, the Good e-Reader app store is the largest of its kind in Canada. |
