ServTech acquires VR developer

22/01/2019 - 12:36

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Osborne Park-based ServTech Global Holdings has acquired an Italy-based virtual reality and augmented reality software developer in an all-script deal worth around $5.9 million up-front, as the company seeks to turn around its struggling performance.

ServTech acquires VR developer
8K S.r.l (to be renamed Vection) is a virtual reality and augmented reality software developer.

Osborne Park-based ServTech Global Holdings has acquired an Italy-based virtual reality and augmented reality software developer in an all-script deal worth around $5.9 million up-front, as the company seeks to turn around its struggling performance.

Under the deal, Servtech will issue 8K S.r.l around 293 million shares at a price of 2 cents each. 

Subject to shareholder approval, the business management software developer will issue up to 150 million more shares in three equal tranches if performance targets are met.  

The milestones are ServTech achieving earnings before interest, tax, depreciation and amortisation of $500,000 within two years of the settlement, revenue of $1.5 million within two years of the settlement, and a share price of at least 3 cents within three years of the settlement.

ServTech’s revenue last calendar year was $800,000, while 8K S.r.l’s was $1.08 million during the same period.

8K S.r.l’s revenue has grown six-fold from $157,000 since it was founded in 2015.

The company will also rename 8K S.r.l to Vection.

ServTech chairman Bert Mondello said the board identified 8K S.r.l as financially accretive and an ideal strategic fit to expand into mature markets.

"Vection is an established software development company, with proven, proprietary, software technology solutions, adopted by a tier-1 customer base such as Lamborghini and Ferretti," he said.

Servtech's share price has fallen about 92 per cent since it debuted on the ASX in 2017.

Shares in the company first traded at approximately 21 cents each in March 2017, while at 12.30pm AEDT today they were up 6.7 per cent on yesterday's close to trade at 1.6 cents each.

Servtech also announced a $2 million share placement to fund the continued operations of 8K S.r.l and its own ongoing commercial activities.

Under the placement, the company will issue approximately 111.1 million shares at 1.8 cents each.

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