Mobile marketing service, Augme Technologies, today announced that it will be acquiring Hipcricket, a mobile marketing and advertising platform for $44.5 million — $6 million of which is in cash and $38.5 million in common stock. Hipcricket’s shareholders must approve the acquisition before it can be finalized, yet with the transaction also calling for a 12-month earn-out payment of an additional $27.5 million, it seems likely that the deal will be approved. Augme will take on all of Hipcricket’s 50-plus employees, but the mobile ad firm will continue to operate out of its offices in Kirkland, Washington.
We profiled Augme in June as an under-the-radar company on the rise in the mobile advertising space, when it released the latest version of its Ad Life platform. As we wrote at the time, “Ad Life, allows marketers, brands, and agencies to plan, create, test, deploy, and track mobile marketing programs — with the most noteworthy feature of Augme’s patented technology being the fact that it is able to reach targeted groups while remaining device-agnostic”.
Augme’s acquisition of Hipcricket follows hot on the heels of its acquisition of Jagtag for $5.5 million two weeks ago. As Jagtag specializes in bar codes and QR codes, and Hipcricket offers marketing solutions that touch on SMS, MMS, mobile websites, advertising networks, and branded applications, Augme is clearly firing on all cylinders in an attempt to round out its platform.
“We expect the complementary resources of Augme, JAGTAG and Hipcricket, when combined, will allow Augme to provide the most powerful best-of-breed mobile marketing solutions to global brand name leaders, backed by strong intellectual property portfolio, including patented technology and software-as-a-service, (“SaaS”) technology platforms”, Augme CEO Paul Arena said.
Augme has traded publicly on Over the Counter Bulletin Board since 2002. The company’s total revenue in 2011 was $2.8 million, but Augme management told me last month that it expects revenue to push $16 million in fiscal 2012 and will achieve positive cash flow the next year. Poised as the company is in a hot growth sector (Gartner expects mobile ad revenue to hit $3.3 billion by the end of 2011, more than double revenue in 2010 — and to hockey-stick to $20.6 billion by 2015), it wouldn’t be surprising to see the company continue to acquire attractive mobile solutions, adding pieces to its puzzle as it makes a play at becoming a leader in the mobile marketing space.