TORONTO-ActiveCore Technologies Inc. announced it will spin out its wireless gaming business in a sale of about $1.75 million, a move the company said will allow it to focus on its wireless enterprise and software business. ActiveCore said it will retain partial ownership in the gaming business and will receive interest and principal payments over the next two years.
“Our decision to sell the games division substantially reduces the level of operational risk in the company while providing us with an ongoing stake in the mobile games market as revenues and profits in that market area grow over the next two years,” said Brian MacDonald, ActiveCore’s chairman and chief executive officer.
ActiveCore will essentially spin out its games division into a separate company. Under the complex transaction, ActiveCore will sell its games division to SilverBirch Studios Inc., which is owned by the founder of ActiveCore’s games division, Kevin Birch. The purchase price will be satisfied by a 12-percent convertible debenture for approximately $750,000 payable over two years plus a 2-percent royalty on all gross revenues to a cap of $1 million expiring in 5 years.
The “mobile games division has rapidly grown to become a leading, progressive developer of games and ring tones, and we feel that its Recess Games portal is the finest mobile content distribution platform in the industry. This acquisition is validation of our belief in the division, and we are very excited about this transaction,” Birch said.
ActiveCore sells wireless and mobile software to businesses, including the health care industry.
