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Plus SMS Holdings has agreed to buy mobile phone content provider Content Technology Mexico in a deal that will give the company its first sales revenue.
Under the agreement, Plus SMS would buy all stock in Content Technology Mexico (CTM) for US$1.2 million in cash and 10 million Plus SMS shares at 20c each over a two-year period.
Chairman George Brooks said: "It's important in that it does provide revenue but more importantly it allows Plus SMS to, particularly in the South American markets, offer a range of content management opportunities and that's a reasonably undeveloped market in that part of the world."
CTM was expected to earn US$800,000 revenue and US$350,000 profit during the 2006 financial year.
The cash payment would depend upon satisfactory audited results for the year, while the shares were payable provided CTM achieved 50 per cent sales growth in both 2007 and 2008, and key managers remained.
Plus SMS shares closed up 1.1c yesterday at 18.9c a share.
Chief executive Christopher Tiensch said the acquisition was a vital part of the Plus SMS strategy.
"With the addition of CTM, Plus SMS will now be able to focus on three key business areas that interrelate beneficially - mobile content management, global routing of messaging through our operational hub and providing international vanity codes for regional and global messaging campaigns."
Plus SMS plans to enable firms to run global text-message campaigns and competitions using single codes, while Mexico City-based CTM makes interactive content and provides services for mobile phone operator Telefonica Movistar.
"By combining key assets and capabilities of CTM ... with Plus SMS's messaging hub, we will be able to quickly expand into Latin America, where the rapidly growing market represents a significant opportunity for us," Tiensch said.
The acquisition was expected to be completed by the end of the year.
