Velti to acquire Air2Web, Casee

Mobile marketing and advertising provider Velti has signed a definitive agreement to acquire mCRM systems provider Air2Web. In addition, Velti has signed a definitive agreement to consummate the previously announced acquisition of the remaining interest in Chinese mobile ad network Casee. Through this acquisition, Air2Web's customers can now use Velti's mobile marketing platform and global capacities to increase the reach and overall effectiveness of their mobile marketing strategies. Air2Web's technology and data reach are complementary to Velti's mGage platform. Velti has signed an agreement to acquire the remaining equity ownership interest of Casee. In 2008, Velti acquired 33 percent of Casee, giving the company the ability to execute campaigns for global brands in China, and forming an important piece of Velti's global expansion strategy. Casee CEO Xin Ye will continue to lead Velti's efforts in China through Casee. Velti will pay consideration of approximately USD 19 million in cash for Air2Web and expects to keep in excess of USD 12 million of annualised revenue from the acquisition, the majority of which is derived from recurring platform licensing, usage and performance fees. Velti anticipates Air2Web will generate approximately USD 3 million in revenue and USD (1) million in Ebitda during the fourth quarter of this year and will become accretive to Ebitda in its first full quarter of consolidation post-acquisition.

Velti will pay up front consideration of approximately USD 8.4 million for the remaining interest in Casee, such consideration to be comprised of approximately USD 3.9 million in cash and, at Velti's discretion at close, USD 4.5 million in cash or common shares of Velti. In addition, based upon the financial performance of Casee, Velti may be required to pay total contingent consideration of up to USD 20.7 million. The contingent consideration is payable in two tranches, with the first tranche of up to approximately USD 7.6 million payable following determination of certain financial results of Casee for its fiscal year ending 31 March, 2012, and the second tranche payable following determination of certain financial results of Casee for its fiscal year ending March 31, 2013. To the extent any contingent consideration becomes payable, a minimum of 50 percent is payable in cash with the remainder payable in cash or common shares of Velti at Velti's discretion. Velti anticipates Casee will generate approximately USD 1.5 million in revenue and USD (0.5) million in Ebitda during the fourth calendar quarter of this year. Subject to certain customary closing conditions, Velti expects the acquisition to close in the fourth quarter and accordingly will consolidate a portion of Air2Web's quarterly results.