Benzinga | Dec 2, 2021 10:45AM EST

EXCLUSIVE: Glimpse Group To Snap Up Immersive Tech Firm Sector 5 Digital For ~$27M

Glimpse Group (NASDAQ:VRAR) is set to acquire 5 Digital (S5D), a leading immersive technology company. S5D helps companies transform their brands by creating innovative digital content.

The Glimpse Group, Inc is a diversified Virtual Reality (VR) and Augmented Reality (AR) software and services solutions provider.

What Happened: Glimpse will pay a total purchase price of $27 million with an initial payment of $8 million ($4 million cash and $4 million shares). The purchase price involves an earnout of $19 million or 70% of the total purchase price based on revenue growth milestones over three years.

Out of the total purchase price, up to $6 million or 22% is in cash, and $21 million or 78% is in shares, priced at the time of issuance over the next three years subject to earnout accomplishment.

Why It Matters: S5D looks to earn a revenue of over $4.0 million in CY21, up 33% year-on-year. S5D sees CY21 margins of 55%-60%.

The transaction looks to double Glimpse's pre-acquisition annual revenue, placing it on a $10 million annual revenue run rate trajectory.

It aims to solidify Glimpse's operating base, generate compelling go-to-market synergies, and deepen Glimpse's robust ecosystem of VR/AR companies and expertise.

S5D CEO Jeff Meisner will continue as its General Manager and join as Chief Revenue Officer. Meisner will also join Glimpse's board as a non-independent director.

Related: Glimpse Group Acquires Assets Of Australia-Based Auggd For Undisclosed Terms

Price Action: VRAR shares traded lower by 10.10% at $11.14 in the market session on the last check Thursday.

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