Social Reality (SRAX) Stock Rallies on Investor Optimism Over the Sale of SRAXmd
Social Reality (NASDAQ:SRAX) is a mover and shaker out on the Street today, with investors sparking the stock on an almost 11% upturn. Why the excitement? The digital marketing and data management platform company announced this morning that it signed an asset purchase agreement on July 29, 2018 to sell a controlling interest in its healthcare and pharmaceutical digital advertising product line, SRAXmd, for total consideration of up to $52.5 million.
SRAX’s CEO and Chairman Christopher Miglino, stated, “SRAX’s long standing goal has been to leverage our proprietary technology to build and monetize distinct verticals in digital advertising. SRAXmd has consistently demonstrated great opportunity in healthcare and its abilities to operate in a stringent regulatory environment. This transaction gives us the benefit of the long-term growth we have been experiencing in MD, which we believe will be worth significantly more in the future while providing us the capital we need to grow our other verticals and to bring Big Token to market.”
Terms of the Transaction
On July 29, 2018 management signed an asset purchase agreement to sell all of the assets of the SRAXmd product line to an affiliate of private equity firm Halyard Capital for total consideration of up to $52.5 million. SRAX will receive $33.5 million in cash, $10 million in Class A membership units of Halyard MD, LLC, the parent of the entity acquiring the assets, and an earn-out of up to $9 million upon the buyer achieving certain gross profit thresholds by December 31, 2018. The transaction is expected to close on or about August 7, 2018, subject to customary closing conditions.