InfoSonics Corporation (NASDAQ:IFON)
InfoSonics Corporation (NASDAQ:IFON) shares gained 23.58% today after the company announced that it will be acquiring Cooltech – an Apple licensed partner. The market responded favorably to the acquisition news as IFON shares closed Tuesday at $0.49 but gapped up to open at $0.67, reached an inter-day high of $0.84, then retreated to close the day at $0.61. Volumes were over 20 times their 30-day, daily average.
Cooltech is a Miami-based company that owns OneClick, a chain of retail stores, and is an Apple authorized reseller under the Apple Premier Partner, APR (Apple Premium Reseller) and AAR MB (Apple Authorized Reseller Mono-Brand) programs; and Icon Networks, an authorized distributor to the OneClick stores and other resellers of Apple products and other high-profile consumer electronic brands.
Cooltech will become a wholly-owned subsidiary of InfoSonics Corporation (NASDAQ:IFON) in exchange for 62.5 million shares of IFON common stock. The merger has already been approved by the Special Committee of InfoSonics’ Board of Directors. However, it is still subject to approval by the Infosonic’s shareholders as well as customary closing conditions. Cooltech and Infosonics Corporation expect to close the transaction in the Q4 2017.
Joseph Ram, President and CEO of InfoSonics stated ” Cooltech has built an exceptional relationship with the largest company in the world, Apple, to aggressively expand in related markets to our existing business. We believe this merger represents an accretive opportunity for InfoSonics shareholders to participate in Cooltech’s growth and maximize the value of our NASDAQ-listed company with several synergies between our businesses.”
Cooltech has, simultaneously, signed an obligation to purchase 2.5 million shares of InfoSonics Corporation (NASDAQ:IFON) common stock at $0.40 per share in cash and warrants exercisable into 2.5 million additional shares of InfoSonics common stock with an exercise price of $0.484 per share (a 10% premium to the closing bid price of InfoSonics common stock on the NASDAQ Capital market on July 24, 2017). The approximately $1 million of proceeds from this private placement will be used by InfoSonics Corporation (NASDAQ:IFON) to cover costs associated with the merger.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.