Australian business technology solutions leader Data#3 Limited (ASX: DTL) is pleased to announce that it has secured an option to acquire a minority shareholding in WiFi analytics company Discovery Technology Pty Ltd (“Discovery”), with the ability to extend this investment into a controlling position by June 2015 and full ownership by June 2017.
Commenting on the proposed investment, Data#3 Managing Director, Mr John Grant, said “We are delighted to have secured an option to acquire a stake in the rapidly growing WiFi sector and to do it with a solution that’s built for the cloud and capitalises on demand for consumption based investment”.
“Industry analyst Gartner recently reported that, with almost 70% of adults in Australia now owning WiFi enabled mobile devices, 86% of them looking for local information on their device as they move about and 88% taking action as a result, the opportunities that are emerging to respond to these behaviours and to enhance their experiences through their WiFi connectivity have never been greater.
“This move aligns with two elements of our strategy – to be a leader in the cloud marketplace and a participant in the applications sector particularly where it influences our customers’ downstream investment in infrastructure and managed services,” he said.
Discovery’s co-founder and shareholder, Brendan Williams commented “Over the last two years we’ve made significant headway in developing and taking our WiFi analytics solution to market, but this is a new venture for us and having Data#3 as a strategic investor will strengthen the relationship we have with Cisco and provide us with the financial support, guidance and stewardship a typical “start-up” technology requires to deliver the outcomes we see are possible.”
Discovery has been delivering technology and software solutions and providing technical support to SMB, corporate and government clients since 1997. In 2013 the company launched an analytics, location and customer communication software product, the Discovery Connected Customer-xperience (“CCX”). CCX is software deployed over WiFi networks to enable WiFi network owners to create value and potentially monetise their WiFi network infrastructure through customer analytics and location aware monitoring and communication combined with delivery of numerous media and business applications.
The first CCX customers were commissioned in the second half of 2013 and Discovery has continued to develop and evolve the CCX platform to provide one portal for all forms of analytics, location and communication within a WiFi enabled environment. The CCX platform is today operational in numerous venues including shopping centres, retail premises, universities, gaming, outdoor locations and hospitality, and has the potential to further expand to any WiFi enabled site or space.
Data#3’s relationship with Discovery commenced in mid-2013 as a reseller of the CCX solution. Data#3 will retain this reselling relationship on an arm’s length basis and manage it separately from the investment to ensure the integrity of Discovery’s relationship with other resellers of the solution.
Subject to finalisation of due diligence and approval to exercise the option by the Data#3 board, it is expected that completion will occur in July 2014. Data#3 intends to fund the investment anticipated to be in the range of $2.5 million from surplus cashflow and will have the right to nominate one director to the board of Discovery. Full transaction details will be provided on completion.