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iClick Interactive Asia Group Limited ("iClick" or the "Company") (NASDAQ:ICLK), a leading enterprise and marketing cloud platform in China that empowers worldwide brands with full-stack consumer lifecycle solutions, today announced the execution of a definitive agreement (the "Agreement") to sell its demand side marketing solutions business in mainland China to SiAct Inc. at a consideration of RMB1 million or equivalents in US dollars (the "Disposal").
The Disposal aligns with the Company's ongoing strategic scale-down of lower-margin and higher-risk businesses in its marketing solutions segment, and the Company's strategy of optimizing its operations and realigning its business focus to meet market trends. The uncertainties around the macro-economic conditions since the COVID-19 pandemic led to a broad-based slowdown in the advertising market in mainland China. In addition, the uncertainty in macro-economic environment with ongoing influences on market sentiment, advertising spending and promotional activities affect the profitability and cash flows of this cash intensive business segment. The Disposal will enable the Company to concentrate resources on its service offerings with higher margins, greater operational efficiency and flexibility, and balanced risks. The Company believes the Disposal will generate greater and lasting shareholder value, and the Company will continue to explore strategic opportunities for broader business growth. After the Disposal, the Company will continue to operate its supply side marketing solutions in mainland China, as well as marketing solutions and enterprise solutions business in Hong Kong and overseas.
To support the ongoing business operation of the disposed business, prior to the closing of the Disposal, the Company shall provide a loan to the disposed business in a principal amount of RMB20 million with a term of six months (which may be extended by the disposed business for up to 12 months) to support their ongoing business operations during the transition period. The loan would be secured by the accounts receivables of the disposed business. In addition, the Company has agreed to repay the outstanding principal of the loans previously extended by three banks to the disposed business, totaling approximately US$35.0 million, within six months following the execution of the Agreement.
For more details of the Disposal, please refer to Exhibit 99.2 of the current report on Form 6-K dated September 11, 2024 for the complete text of the Agreement.
Posted In: ICLK
