mCloud Technologies Corp (CVE:MCLD) (OTCQB:MCLDF) announced it may acquire Australia-listed BuildingIQ (ASX:BIQ), a firm also in the smart buildings technology space, in a bid to expand mCloud's AssetCare solution.
BuildingIQ' currently connects over 1,350 commercial buildings worldwide and helps owners’ lower energy, increase efficiency and enhance tenant comfort.
mCloud said the deal would bring C$6.1 million in trailing 12-month revenues, give it a strong customer presence in Australia, and expand its business in Southeast Asia.
"Through BuildingIQ's 5i technology stack, we would be able to integrate new AI and IoT solutions into AssetCare, which would let us combine our respective energy savings technologies to target new large commercial spaces such as hospitals and bring new energy management tactics to enterprise multi-site building portfolios via capabilities such as automated measurement and verification (M&V)," said Russ McMeekin, mCloud's president and CEO.
"With BuildingIQ's home base in Australia, their operations would also provide us with an anchor to expand our business development activities for smart buildings to Southeast Asia, an excellent addition to our existing strategy to secure major oil and gas customers in the region," he added.
The proposed deal is expected to close on June 19 this year and McMeekin expects to bring cost synergies to BuildingIQ that would make the transaction cash accretive without impacting BuildingIQ's growth and "ability to continue serving customers".
The non-binding expression of interest (EOI) sees mCloud provide BuildingIQ with a working capital facility to support it this year and an offer to acquire 389 million CHESS Depositary Interests (CDIs) in BuildingIQ in exchange for 882,230 mCloud shares.
This equates to a price of A$0.0158 per CDI, or a 58% premium to BuildingIQ's last closing price on the ASX and mCloud's three-day volume-weighted average price stock price for the week of February 2 this year of C$6.27.
In addition, mCloud will provide BuildingIQ with a secured working capital loan of A$1.5 million on commercial terms on February 14, 2020.
Vancouver-based mCloud has over 100 blue-chip customers and more than 35,000 assets connected in thousands of locations worldwide.
On February 10, it said it had signed a contract to acquire technologies from Boston-based AirFusion Inc, a provider of visual inspection and monitoring technology powered by artificial intelligence.
Also, mCloud acquired from AirFusion, its subsidiary AirFusion GmbH, existing customer contacts, and technologies under development from its partner in Warsaw, Poland.
mCloud shares ticked up 1.61% in Toronto to C$6.30.
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