Creative Realities has found lenders and therefore pulled the finances together to complete the acquisition of the digital signage deployment firm ConeXus World Global, turning ConeXus into a wholly-owned subsidiary of the Company.
To do the deal first announced in August, CRI got a $3.0 million accounts receivables financing facility with “a nationally-established lender” (as opposed to a guy with a toothpick in the back of a trattoria), and also closed on an additional $500,000 of secured promissory notes.
The attraction for CRI is showing a new side of the business that generates a decent amount of revenue and has a healthy list of clients, versus CRI (aka Wireless Ronin) which has a short client list and has a storied history of running in the red.
Here’s the release:
Creative Realities, Inc. (“Creative Realities”, “CRI”, or the “Company”) (OTCQB: CREX), a leading marketing technologies solutions provider, announced that it has completed the acquisition of ConeXus World Global, LLC (“ConeXus”). ConeXus is now a wholly-owned subsidiary of the Company.
ConeXus, a leading provider of digital signage installation and services, provides the Company a stellar client list of luxury brands, DOOH companies, advertising networks and global retailers with active installations in 40 countries. ConeXus generated approximately$4.5 million of revenue for the first nine months of 2015, representing a doubling over the year prior, and has the potential for significant continued expansion. Taken together with the revenue initiatives and cost reduction activities that CRI has been undertaking, this business combination creates a larger and more profitable enterprise in a high growth industry that is in the process of consolidating.
Alec Machiels, Chairman of the Company stated, “CRI and Conexus are a fantastic strategic fit. Conexus’ reputation, personnel and operational expertise in designing, installing and servicing high-end marketing technology solutions and complex audio-visual networks domestically and internationally is outstanding. Combined with CRI’s core competencies in the design of front-end omnichannel experiences, content solutions, and other capabilities, this will significantly enhance and further differentiate our end-to-end offerings in the marketplace. The board is also extremely pleased to be naming Rick as CEO of the combined company. He has over 20 years of experience in this field and significant public company experience.”
Rick Mills, the incoming Chief Executive Officer and Director of the Company added, “We are pleased to be joining forces with the Creative Realities team. This is about creating scale and a platform optimized for organic growth and acquisitions. As the growth of digital marketing continues to accelerate, we are well positioned to be the provider of the total solution.”
Simultaneous with closing of the ConeXus transaction, the Company entered into a $3.0 million accounts receivables financing facility with a nationally-established lender and also closed on an additional $500,000 of secured promissory notes.
The merger agreement was amended in part to reflect this and certain other conditions, and is filed with the SEC. The stock consideration payable in the transaction is equal to approximately 21.3% of the Company on a fully-diluted, as-converted basis, after the issuance of a combination of the Company’s common and preferred stock at a price (or conversion price) of $0.28 per share. This amount includes a holdback provision that could reduce the final stock consideration paid by the Company.