NetDragon Websoft Inc, a Chinese online gaming and mobile app developer, has acquired the mobile solutions business of Cherrypicks for up to an aggregate consideration of US$30.5 million.
Under what it calls the “sales and purchasing agreement”, Cherrypicks will continue to focus on the research and development and provision of mobile solutions to customers, while Cherrypicks Alpha, which focuses on the research and development of online-to-offline (O2O) mobile marketing, shopping and commerce product platforms, is excluded in this transaction.
The final amount of such consideration will be subject to the operating profitability performance in 2014 and will be paid out in a combination of up to US$26 million of cash and US$4.5 million worth of shares of NetDragon, subject further to vesting conditions.
In addition, NetDragon will inject an additional US$4 million for the expansion of Cherrypicks’ existing technological development as well as extension into new markets.
Cherrypicks will remain headquartered in Hong Kong upon completion of the deal and operate under the brands of Cherrypicks and Cherrypicks Alpha.
Liu Dejian, chairman and executive director of NetDragon, said: “Cherrypicks’ corporate culture of innovation and pursuit of excellence is in perfect alignment with NetDragon’s mission of striving to provide the best mobile solutions for our customers, both in China and in the global markets.
“We believe this strategic acquisition will open up tremendous opportunities for both NetDragon and Cherrypicks in providing disruptive, world-class mobile products and solutions for our users globally in various segments, including enterprise software, mobile community, mobile commerce and mobile education.”
Jason Chiu, CEO of Cherrypicks, said: “We are devoted to fostering the best win-win reciprocity and synergy between Cherrypicks and NetDragon, complementing each other in extending our presence in China and global mobile markets.
“Undoubtedly reaffirming years of research and development achievements of Cherrypicks, the deal also brings in new capital for Cherrypicks to enhance its research and development capabilities which will expand its business diversification.”
He said Cherrypicks would benefit from gaining convenient entries into the Mainland China market via the merger, facilitating to move further in business internationalisation as well as gradual realisation of its goal as the global leader in mobile marketing, shopping and commerce solutions.
The management team at Cherrypicks remains unchanged under the deal.