Vista renegotiates sale agreement with VCL
Vista renegotiates sale agreement with VCL, increases deferred consideration
By Sophie Boot
Dec. 22 (BusinessDesk) - Vista Group International, the cinema software and analytics firm, has renegotiated its agreement with Virtual Concepts (VCL) and increased its deferred consideration payment by up to $900,000.
Vista bought the remaining 43 percent stake of VCL, which owns Movio, a marketing data and campaign management platform for cinemas, in August 2014. As part of that agreement there was a deferred consideration calculation, anticipated at $5.9 million over two years.
The deferred consideration will now be calculated in a range of $6.3 million to $6.8 million over three years, the company said in a statement to the NZX.
The increase comes as part of Vista's renegotiation with VCL, which the company said it had done to account for delays in converting signed contacts, which has resulted in reported revenue running behind forecast.
The operating profit measure required by Vista has been reduced "to an achievable level based on current performance," the company said.
Other terms of the new agreement include the founders of VCL staying on for at least one further year, as the earn out has been extended to three years, and in the second and third years, revenue hurdles and a minimum profit return will have to be established before any earn out is paid.
In August, Vista said it boosted first-half profit 24 percent and expects to meet forecast sales of $61.5 million in calendar 2015. Those accounts include the restatement of its 2014 annual statements after it reassessed the goodwill value attached to VCL, increasing Vista's 2014 net profit to $7.95 million from the $3.73 million previously stated. However, the Movio analytics segment was running behind schedule in the release and commercialisation of its product.
The shares last traded at $5.79 and have climbed 53 percent this year. Vista raised $92 million in an initial public offering at a price of $2.35 last year.