ConversionPoint to Acquire Inuvo for US$75.5 Million

Inuvo (NYSEA:INUV) announced on Monday (November 5) that it will be acquired by ConversionPoint Technologies in a cash-and-stock transaction valued at US$75.5 million in total consideration.

ConversionPoint, a privately held eCommerce technology company will acquire Inuvo, a provider of artificial intelligence (AI) technology, in a transaction valued at US$2.22 per share of Inuvo based on over 34 million shares. Shareholders of Inuvo will receive US$0.45 per share in cash valued at roughly US$1.77 per share in stock.

As part of the transaction, a new holding company called ConversionPoint Holdings will be created under which Inuvo and ConversionPoint are set to become wholly-owned subsidiaries.

It was noted that ConversionPoint intends to file listing applications for the stock at NASDAQ Capital Market as well the Toronto Stock Exchange.

Following the transaction, which is expected close in the first quarter of 2019 pending approval from shareholders, shareholders of Inuvo will have a 29 percent stake in ConversionPoint Holdings and total cash considerations of U$15.3 million.

Inuvo’s patented, AI-driven consumer behavior technology, was deemed s a key reason for ConversionPoint acquiring Inuvo. The technology from Inuvo banks on machine learning to reflect a human in associating ideas, emotions among other things.

Through the acquisition, the companies will offer a combined solution for retailers and brands an AI-powered e-commerce platform that would give deeper insight into consumer behavior for stronger return of investment and online sales.

Furthermore, the companies said that the AI-powered platform could potentially create a compelling eCommerce solution for non-Amazon (NASDAQ:AMZN) platforms like Shopify (TSX:SHOP) and Walmart (NYSE:WMT).

“Online retailers and brands have been searching for an end-to-end data driven technology to help provide accurate information they can use to acquire customers,” Robert Tallack, CEO of ConversionPoint, said in the release. “We believe that together our end-to-end, AI powered, eCommerce platform can offer those capabilities to the online retail channel and the direct channel that the market has been actively searching for.”

ConversionPoint Holdings will have a combined portfolio of 15 issued US patents with 12 patents pending approval.

“With our combined technologies, data sources and industry partners, we will be able to offer an even greater level of eCommerce transparency and sophistication across small, medium and large business segments,” Rich Howe, CEO of Inuvo, said in the release. “We see this combination allowing us to pursue a shared vision of providing more powerful solutions for eCommerce.”

The transaction includes several clauses, such as ConversionPoint having to raise a minimum of US$36 million to fund the cash portion of the acquisition transaction.

Following the announcement on Monday, shares of Inuvo were up 223.83 percent and closed the trading session at US$1.34. The stock had a trading volume of 22.17 million throughout the day, with the stock touching a high of US$1.55 and a low of US$0.81. Inuvo has a “Strong Buy” ranking on TradingView with 17 verticals in favor, seven in neutral and two against.

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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.