Shanghai-based enterprise mobile marketing solutions provider Dodoca Information Technology has announced it plans to acquire Hangzhou-based mobile marketing solutions provider Weiba Information Technology for RMB 80 mln.
Of the acquisition cost, Dodoca will pay RMB 21.63 mln in cash. It will raise the remainder by issuing 4.17 mln shares to Weiba's current shareholders at RMB 14 per share.
Weiba provides enterprise marketing services on Chinese internet and mobile services firm Tencent's (0700.HK) WeChat mobile messaging app. In 2013 and 2014, Weiba generated revenues of RMB 7.6 mln and RMB 26 mln, respectively, and net profits of RMB 3.1 mln and RMB 11 mln. Weiba aims to generate revenues of no less than RMB 30 mln, 45 mln, and 67.5 mln in 2015, 2016, and 2017, respectively, with net profit of no less than RMB 8 mln, RMB 12 mln, and RMB 16 mln in the same three years.
Additionally, Dodoca plans to make a non-public issuing to designated partners to raise no more than RMB 163 mln. The funds raised will be used to cover the costs involved in the Weiba acquisition, replenish working capital, open up new markets and R&D.
Editor's Note: For more information on this topic, please see "WeChat Marketing Firm Dodoca Raises Additional RMB 15 Mln," MD 9/03/14 and "WeChat Marketing Company Weiba Acquires Rival," MD 7/05/14 issues.