Livelenz, a Bedford-based company that analyzes data for fast food restaurants, has been sold to Mobivity Holding Corp. for less than $1 million in stock in a bid to grow with the larger company.
Chandler, Arizona-based Mobivity, whose shares trade over-the-counter in the U.S., said in a regulatory filing that in January it paid 1.015 million of its shares for all the stock of Livelenz. Mobivity shares at the time were trading for about 70 US cents, each, which values the deal at the time at about C$950,000.
Livelenz had previously received two equity investments from Innovacorp totaling $1.4 million, and the provincial innovation agency is now a shareholder in Mobivity as a result of the acquisition. Those shares are subject to an 18-month lockup.
Livelenz and Mobivity initially met because they are both partners with Epson, the Japanese manufacturer that dominates the market for receipt printers for fast-food and casual dining restaurants.
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Founded in the Annapolis Valley in 2010, Livelenz understood that receipt printers revealed a wealth of data about a restaurant’s business that could be used to reduce waste and increase sales. The company partnered with Epson to exploit the Japanese company’s dominance in the point-of-sales market in the sector.
Two years ago, Mobivity bought SmartReceipt, Inc., a similar company that offers coupons and special offers through receipts for such companies as Subway, Baskin-Robbins and Dairy Queen. Now Mobivity is offering both this technology and that of Livelenz.
“It was a good deal for both parties in that we’re both in the same space,” said Livelenz’s former CEO Jon McGinley in an interview Monday. “They are an Epson partner and we are an Epson partner and the technology alignment made sense.”
Since Mobivity trades publicly, there are limits to what it can say about its future plans (Chief Financial Officer Christopher J. Meinerz declined to discuss them Monday). But it’s obvious the company is planning to grow its new Halifax operations.
McGinley, who has a background in marketing, has joined Mobivity as Vice-President of Marketing. He is one of about five employees at the Bedford office.
Last week, as reported in the Chronicle-Herald, Nova Scotia Business Inc. announced payroll rebates for Mobivity, under which it will create as many as 40 new jobs, in which case it would pay out $5.8 million in salaries over the five-year period.
The Arizona company offers Livelenz a far larger reach than it would have had independently. Its clients include Subway, Sonic, Jamba Juice, Chick-fil-A, and Baskin-Robbins.
Mobivity recently reported that in 2015 it lost US$3.9 million (a mild improvement from the 2014 loss of US$4.1 million). Its sales meanwhile rose 15 percent to US$4.6 million.
The company’s shares were quoted on Bloomberg Monday at 63 US cents, down 40 percent in the past year.
“We are well-positioned for expansion in 2016, and we are now beginning to realize the revenue growth from all of the groundwork laid in 2015,” Mobivity CEO Dennis Becker said in its results statement. “we are engaged in discussions with a number of new brands, and we see 2016 as a year that will continue to bring great opportunities."
Disclaimer: Innovacorp is a client of Entrevestor.
