Minerals Corporation's (ASX: MSC) shares are set to gain as it taps into the rapidly growing cloud-based application sector with the acquisition of 100% of PRM Cloud Solutions, with consideration being scrip based with performance milestones.
PRM is a pioneer in Australia's rapidly emerging, cloud computing sector and has over six years of experience and key personnel in Melbourne, Brisbane, Perth and Austin, Texas.
PRM already holds a blue-chip client base including: Rio Tinto, McMahon, Downer EDI, Inpex, Seven West Media, The West Newspaper Group, Synergy, BGC, Exxon Mobil, Western Power and Serco.
There is a significant growth pipeline through a mobile business application roll-out.
The company provides both professional services and custom application development based on the Force.com platform.
Created by global technology leader Salesforce.com, the Force.com platform is used by over 100,000 companies worldwide and is considered one of the most trusteed and secure development platforms available today.
PRM has strong Salesforce.com credentials, holding every certification that the company offers including one of only three prestigious Technical Architect Certifications held in Australia.
PRM is also the creator of MiCloud.com, a unique cloud-based application targeting the resources sector's challenges and inefficiencies in workforce mobilisation and management. The application enables companies in the sector to manage the complex logistics of worksite deployment while controlling costs and maximising efficiency.
Additional applications have been developed by PRM and are ready for commercialisation and packaging as applications, which have the potential to lead to near-term revenues.
The upfront consideration for PRM will be 650,000,000 MSC shares, with an additional 350,000,000 shares subject to revenue based performance hurdles.
The transaction includes the appointment of PRM CEO, Leigh Kelson, to the board of MSC as chief executive officer.
Chapter's 1 & 2
The PRM transaction is subject to MSC shareholder approval, compliance with Chapter's 1 & 2 of the ASX Listing Rules and re-admission to the ASX, mutual due diligence and signing a formal share sale agreement with PRM Cloud's shareholders.
Minerals Corporation will also seek a name change to PRM Cloud Solutions.
Murray Ward, managing director of Minerals Corporation, said: "The Board of MSC believes that the acquisition of PRM is a great outcome for shareholders in what is an extremely difficult marketplace for exploration companies.
"Leigh and his team have a strong reputation in the Cloud application space and have a clear vision for driving the company forward.
We are especially excited about PRM's first mover advantage in launching the MiCloud product globally before the end of the year, by introducing it to multibillion dollar markets ripe for innovation."
MiCloud offers a totally integrated, cost saving and innovative solution to the resources industry, as the management and mobilisation of workforce is a significant cost to mining companies.
As part of the proposed acquisition, Murray Ward and executive director Dan Smith will each step down to the position of non-executive director following the company's re-admission to the ASX.
Placement and consolidation
Minerals Corporation is undertaking a placement through a Perth broker to raise around $625,000 by placing 250,000,000 shares at $0.0025 per share in two tranches.
The first tranche, totalling 164,000,000 shares, will be completed pursuant to the company's placement capacities under ASX Listing Rules 7.1 and 7.1A.
The remaining 86,000,000 shares will be issued subsequent to shareholder approval. Following completion of the initial capital raising MSC will have cash reserves of around $790,000.
The company will also undergo a capital consolidation after the acquisition of PRM and will then seek to raise additional capital of at least $2,500,000 through a re-compliance prospectus.
This would provide cash reserves in excess of $3 million.
Minerals Corporation has placed itself in a position to transform its focus on the rapidly expanding Australian cloud computing market was worth US$882.4 million in 2012 and is expected to reach US$3.33 billion in 2016.
The acquisition has the potential to place the company in a position to deliver near-term revenues.
Recent microcap stocks acquiring technology businesses have been market stars with the technology sector running hot on the Australian and U.S. markets.
With Minerals Corporation having a market cap. of around only $1 million, the company is expected to trade firmer at the opening of trade.
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