West Australian mining company Intercept Minerals is transforming itself into a technology firm, acquiring US online streaming business xTV for $12.5 million. Intercept placed its shares in a trading halt on Monday ahead of the announcement, which saw it agree to purchase 100 per cent of Silicon Valley firm mppAPPS Inc, known as xTV. xTV is a data streaming service which combines a user’s videos, social media and news services into a multi-screen platform, known as Media-as-a-Service. Intercept said the move marked a “significant change in the nature and scale of the company’s main business activity”. It said it also planned to change its company name to xTV Limited. xTV was started in 2011 by chief executive Joe Ward, whose vision is to “deliver any organisation the capability lower the cost of content development and increase the consumption of their media” through real-time data streaming, Intercept told investors. xTV received funding in 2012 from Microsoft for services, development and co-marketing investment and has contracts with Microsoft, Intel and IT service provider UST Global. In the terms of the acquisition, Intercept said it paid a $50,000 exclusivity fee for a two-month period to negotiate the acquisition. It also said it had received shareholder commitments to raise $350,000 to pay for the exclusivity fee, due diligence and transaction costs. It will also prepare to raise an additional $3 million in capital in October through a prospectus to help develop the xTV product. Fellow West-Australian tech company Applabs, which purchased 5 per cent of xTV in June, said it intended to support the offer from Intercept. Applabs said it would subscribe to 25 million Intercept shares for a consideration of $50,000, in line with its strategy to invest in companies that have “expressed an interest in exploring and evaluating new business opportunities,” it said. Intercept retains three mining tenements, one of which it recently signed a farm-in agreement with Rio Tinto to reduce its interest from 100 per cent to 75 per cent. A general meeting will be held on September 29 to give shareholders the opportunity to approve the xTV acquisition.
IZM Price at posting:
0.4¢ Sentiment: Buy Disclosure: Held
