NexTech AR Solutions Corp. (NTAR:CSE; NEXCF:OTCQB) announced in a news release it signed a letter of intent (LOI) to purchase an e-commerce business for $2 million, making it the company's fourth acquisition to date in 2019.
The transaction reflects NexTech's ongoing execution of its strategy to grow via the acquisition of revenue-generating e-commerce companies with industry-leading positions. The current target of NexTech generated $1.6 million in revenue and yielded an EBITDA of $600,000 in 2018.
To buy the e-commerce company, NexTech will pay $1 million in cash and $1 million in stock, the latter priced at US$0.58 or CA$0.77.
The closing of the deal is expected to follow the due diligence process, now in process, which should take about four weeks.
Closing would "push our AR-enabled e-commerce division to a trailing 12-month run rate of $6.5 million in consolidated revenue and $1.5 million in EBITDA," NexTech CEO Evan Gappelberg said in the release. From that division this year, "we are projecting to grow the revenue to $9.3 million, generating $5 million in gross profits and over $2 million in EBITDA."
Gappelberg added, "Since going public on October 31, 2018, we have been focused on revenue and cash flow from eCommerce acquisitions as well as launching our AR SaaS platform around our three verticals, AR eCommerce, AR university, and AR live streaming. While our AR eCommerce SaaS platform has launched with many customer wins, we're excited to be launching our AR university platform and AR live streaming both within the next 120 days, which are also expected to be very strong engines of growth in 2019."
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