By Lisa Thompson
Inuvo’s (INUV) management has long stated that it would seek buyers of the company once it hit a size to be of interest, which it deemed to be at a $100 million revenue run rate. On the cusp of reporting that it has reached that run rate, the company has announced plans to be acquired. Today Inuvo announced that it has entered into a definitive agreement to be acquired by privately held ConversionPoint Technologies, Inc. for cash-and-stock valued at approximately $2.22 per share or $75.7 million, well above its market price of $0.41 per share. Inuvo shareholders will receive $0.45 per share in cash, and stock valued at an estimated $1.77 per share, or approximately $75.5 million in total consideration. ConversionPoint plans to file a Form S-4 with the SEC to register the shares of common stock to be issued in the acquisition and intends to file listing applications for its stock with the NASDAQ Capital Market and the Toronto Stock Exchange. We believe the current plan is for INUV stock to stop trading under that ticker and for the reserved ticker CPTI to start trading the following day. ConversionPoint Technologies was recently valued at $146 million in a $15 million private company round.
ConversionPoint describes itself as an eCommerce technology company changing how brands, advertisers, and agencies connect with, acquire, and retain customers. Powered by AI-enabled media optimization, CRM, and robust post-purchase platforms that automate product delivery and remarketing, ConversionPoint offers proprietary technologies to increase conversions, lifetime customer value, and return on ad spend. ConversionPoint focuses on the non-Amazon channels, including Walmart.com, Shopify.com, and BigCommerce.com. Management has identified a number of specific near-term opportunities by combining with Inuvo, including upselling Inuvo’s high-margin AI powered IntentKey media to ConversionPoint’s existing enterprise customers and online retail partners, as well as integrating ValidClick and creating a new traffic acquisition source for them.
The deal is expected to close in Q1 of 2019, is subject to customary and other closing conditions, including a requirement that ConversionPoint raises a minimum of $36 million of gross proceeds from the issuance of equity and/or debt, a portion of which will be used to fund the cash portion of the acquisition transaction. The two companies will hold a conference call on Wednesday to provide further information. We will issue a full report after that call.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $30,000 annually for these services. Full Disclaimer HERE.
By Lisa Thompson