InfoSonics Acquires Apple Partner Cooltech Holding

Wireless handset and tablet maker InfoSonics Corp. (NASDAQ:IFON) agreed to buy retail store operator Cooltech Holding Corp. in an all-stock transaction.

Per the deal, San Diego-based InfoSonics is acquiring the owner of OneClick, one of the few Apple Premium Reseller and Apple Authorized Reseller Mono-Brand partners in Latin America, for 62.5 million shares of IFON. Miami-based Cooltech also owns Icon Networks, an authorized distributor to the OneClick stores and other resellers of Apple products and other consumer electronics and accessories.

There are currently four OneClick stores in the United States and 16 more in the Americas, with plans to open more stores given Apple's (NASDAQ:AAPL) somewhat limited footprint south of the U.S. border.

A value of the transaction was not provided, but based upon the closing price of IFON on Tuesday ($0.494), the buyout price would be approximately $30.88 million.

In the latest reported quarter, ended March 31, 2017, InfoSonics posted net sales of $6.22 million and a net loss of $1.1 million, or eight cents per share, which as worse than the $9.4 million in sales and loss of $903,000, or six cents per share, in Q1 2016 .

When the transaction is complete, the holders of Cooltech will control about 85% of InfoSonics, with Cooltech becoming an wholly-owned subsidiary of InfoSonics, making this more of a reverse merger to bring Cooltech public than anything else. As part of the deal, three of InfoSonics four directors will resign and be replaced by Cooltech nominees.

Furthermore, Cooltech agreed to buy 2.5 million shares of InfoSonics common stock for 40 cents per share and warrants to buy another 2.5 million shares of IFON at an exercise price of 48.4 cents. InfoSonics intends to use the proceeds to pay for costs associated with the merger.

A special committee of InfoSonics' board of directors has approved the transaction, but still needs shareholder approval to move forward.
Wall Street has responded favorably to the deal, sending shares of IFON ahead 16.7% to 57.6 cents as of about 2 p.m. EDT, although that's well off the high from earlier in the session at 84 cents.