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Newzulu To Capitalise On Global Demand For Mobile App Development

Media company Newzulu (ASX:NWZ) is acquiring a mobile applications and solutions developer that could generate higher levels of earnings for its mobile division.

Octiplex has delivered mobile apps to major media companies and brands across the U.S., Europe and South America.

The acquisition will establish Newzulu Mobile as a world leader in mobile app development for the media and advertising industry, leveraging Newzulu's global sales and operations infrastructure.

It will also grant the company access to Octiplex's extensive software library which allows rapid design, development and delivery of iOS and Android apps.

Newzulu will integrate the technical development resources of Octiplex - including its software engineering team - and reduce its previously outsourced mobile development costs.

Newzulu's business plan includes significant global expansion of Newzulu Mobile's operations, including sales to existing and prospective clients and partners worldwide.

Octiplex is part of the Apple Consultant Network and is an Apple Authorised Training Center.

Alexander Hartman, executive chairman, said:

"Mobile is key to the future of the media and advertising industries and Newzulu's acquisition of Octiplex positions Newzulu Mobile to capitalise on the huge global market for mobile application development.

"The acquisition of Octiplex presents significant synergistic benefits and strategic expansion opportunities for Newzulu. Newzulu Mobile will significantly increase its mobile software engineering capabilities and the depth of its relationship with both Apple and Google through the acquisition of Octiplex."

Newzulu is a media company that provides coverage, content, and technology to broadcasters, news agencies, publishers, and brands around the world.

Consideration for the Acquisition

Consideration for the Acquisition is up to €725,000 (approximately A$1,055,000), to be settled as cash payment of €362,500 and fully paid ordinary shares in Newzulu up to the value of €362,500.

The number of shares to be issued will be calculated based upon:

- The volume weighted average price of shares over the five days preceding the completion date of the Acquisition; and
- The average exchange rate over the five days preceding the completion date of the acquisition as quoted by the company's foreign exchange financial institution.

The shares will be subject to a 12 month voluntary escrow period.
The acquisition is conditional upon the satisfaction of the following conditions:

- Newzulu successfully completing a capital raising of at least A$1,459,000;
- Octiplex founder Damien Gosset remaining with the company group following completion of the acquisition;
- The company obtaining all necessary shareholder, regulatory and third party approvals in relation to the acquisition.

Gosset will be appointed a senior vice president of Newzulu Mobile.

Newzulu is in the process of preparing a notice of meeting to refresh the company's 15% capacity and to seek approval to issue the shares for the acquisition. It is anticipated that the general meeting will be held by the first week of August 2015.

Recent Activity

Last month, the company entered a strategic partnership and content syndication agreement with ddp images, a German independent multimedia content agency, and Alamy, the world's largest online photo agency for stock, video and live news.

It also entered into a software license and reseller agreement live video solutions provider, LiveU to expand the addressable market and technical capabilities of the Newzulu Live mobile video streaming platform for publishers, broadcasters and brands.

The company's Newzulu Prime platform, which applies the Newzulu Platform for the benefit of commercial clients, advertising agencies and brands, signed its first clients in Europe.

In addition, the company has entered into video syndication agreements with leading Spanish newsgathering agency, Wikono and U.S. media distribution company, Shami Media Group. This is expected to increase sales of Newzulu editorial content in the U.S. and Spanish markets.

Analysis

Acquiring Octiplex establishes Newzulu Mobile as a world leader in mobile app development for the media and advertising industry.

This positions the company on the global market for mobile application development.

It also reduces its previously outsourced mobile development costs.

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