iClick Interactive Asia Group Limited (NASDAQ: ICLK) experienced a notable surge in its stock value following a significant strategic announcement. As of the latest session, ICLK shares rose by 9.74%, reaching $1.69. This uptick in stock price came in the wake of iClick Interactive’s announcement regarding the divestment of Tetris Media Limited, a primary entity within its enterprise solutions business in mainland China.
Share Purchase Agreement
In order to sell all of its equity investment in Tetris Media Limited, Optimix Media Asia Limited, a wholly-owned subsidiary of iClick Interactive, entered into a share purchase agreement with BeihaiOne Limited. This action is a component of iClick Interactive’s larger plan to improve profitability, restructure its business emphasis to better match market trends and SaaS sector demands, and optimize operations based on business unit performance.
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Operational And Financial Strategy
In spite of the divestiture, iClick Interactive will carry on with its marketing solutions business in mainland China, Hong Kong, and other countries, as well as its enterprise solutions company in Hong Kong. The difficult macroeconomic environment and fierce competition in the SaaS sector in mainland China, which have had a detrimental effect on segment margins and operational cash flows, were factors in the decision to sell Tetris Media Limited. The board of directors decided it was wise to sell Tetris and its subsidiaries because there were little prospects for expansion.
Apart from this divestiture, iClick Interactive is dedicated to continuous cost optimization endeavors that seek to augment the company’s capabilities and sustainability while fostering increased operational efficiency. It is anticipated that these actions would boost financial results and increase shareholder returns.
Valuation and Approval
To ensure the fairness of the transaction, iClick Interactive engaged an independent third-party valuer to assess the market value of Tetris Media Limited and its subsidiaries. The valuation resulted in a consideration of $80,000, deemed commensurate with the equity value of the entities. The board of directors, following the recommendation and approval of the audit committee, sanctioned the disposal, marking a pivotal step in iClick Interactive’s strategic realignment.
