Metropolis Transactive Holdings, holding company of the iAfrica.com portal, has announced two deals worth R40 million in its ongoing acquisition strategy.
The two separate deals will see the firms of Gibson Dax and Ornico join the Metropolis stable.
Metropolis says Gibson Dax is to form the basis of a property community. The company owns the "Real Estate Gazette", a CD-ROM-format publication aimed at the property community. The Gazette makes use of a large database of commercial, retail and industrial property stock information. Founders James Gibson and Jay Dax have both entered into restraint of trade agreements. The purchase consideration of R37,5 million will be settled by either cash or shares, and is subject to profit warrents over the next two years.
Ornico provides database services to the advertising market by way of a television and radio advertisment archive, which it maintains in digital format. The data is used for creative referencing and the planning of campaigns. It claims a 95% market share in its specialised field. It will be acquired for R4,2 million in cash and shares.
Metropolis says the addition of Ornico will allow it to provide a holistic advertising monitoring service. Its existing Adcheck division monitors the printed media on behalf of its clients, while Ornico focuses on the electronic media.
"The acquisitions are in line with our business development strategy of aggregating high value data companies within particular vertical markets. This strategy has been designed to build a critical mass of users within our vertical communities by providing have-to-have products and services to our customers," says Jason Xenopoulos, CEO of Metropolis. The company has a stated strategy revolving around the creation of niche business-to-business e-commerce communities. Once the communities are established, revenue will be derived on a commission basis as well as by advertising and services provision.
This strategy also saw the R10 million acquisition of Mosaic Marketing, a consultancy providing demographic and statistical information. A further cautionary announcement was also released.
Metropolis reported an operating loss of R1,8 million for the three months ended December. At the time of its listing in November it forecast a 1,6c per share loss for the 1999 year. The first profit is expected next year.
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