WILMINGTON, Del. - Onfolio Holdings Inc. (NASDAQ:ONFO, ONFOW), a company specializing in the acquisition and management of online businesses, confirmed the completion of its acquisition of a majority stake in Eastern Standard, LLC, a digital marketing service provider. The transaction, which was finalized this week, involved Onfolio purchasing 70% of Eastern Standard for $1.66 million. The deal was structured through the issuance of $410,000 of Series A Preferred Shares and two secured promissory notes totaling $1.25 million.
Eastern Standard, based in Philadelphia, offers services that include integrated branding and digital customer experiences. Their clientele has featured notable names such as Neil deGrasse Tyson and Cornell Law. In the fiscal year ending December 31, 2023, Eastern Standard reported revenues of around $4 million and an unaudited adjusted EBITDA of $630,000.
Onfolio's acquisition strategy did not require any upfront cash payment or the issuance of common shares. The company's Special Purpose Vehicles, Onfolio Agency SPV LLC and Onfolio Agency SPV 2, LLC, contributed $500,000 for a 20% interest in Eastern Standard. Onfolio's CEO, Dominic Wells, remarked on the importance of the Special Purpose Vehicle model and non-convertible Series A Preferred Shares in the firm's future acquisitions.
The acquisition aligns with Onfolio's investment criteria, which includes targeting businesses operating in sectors with long-term growth potential, stable cash flows, minimal risk of obsolescence, and capable management teams. Onfolio prides itself on identifying undervalued businesses where it can apply its expertise to enhance value.
An 8-K form detailing the transaction was filed with the Securities and Exchange Commission on the same day as the press release, October 22, 2024, and is publicly accessible on the SEC's website.
This news is based on a press release statement from Onfolio Holdings Inc. The information contains forward-looking statements subject to risks and uncertainties that could affect the company's actual results.
In other recent news, Onfolio Holdings Inc. has announced its asset purchase agreement to acquire a majority interest in the assets of Eastern Standard LLC, a provider of digital marketing services. This acquisition, expected to close in October, aligns with Onfolio's strategy to enhance its portfolio and expand client services. Eastern Standard reported approximately $4 million in revenue and $630,000 in adjusted EBITDA for the fiscal year that ended in December 2023.
In addition, Onfolio Holdings has been making strategic decisions, such as a reverse stock split approved during their Annual Meeting. The exchange ratio is set to range from 1-for-2 to 1-for-5, with the specific ratio and timing to be determined by the board of directors. This move aims to increase the per-share trading price of Onfolio Holdings' common stock.
Furthermore, the company has been actively expanding its portfolio through strategic acquisitions. It recently acquired a majority stake in DDS Rank, a digital marketing service provider for dentists, for $600,000. This acquisition is expected to double DDS Rank's revenue and EBITDA within the next two fiscal quarters. Onfolio Holdings also announced the acquisition of the business assets of First Page Strategy through its subsidiary, RevenueZen LLC, which is expected to result in significant cost savings and additional revenue. These are among the recent developments in Onfolio Holdings' strategic moves.
InvestingPro Insights
Onfolio Holdings Inc.'s recent acquisition of Eastern Standard aligns well with several key financial indicators and trends highlighted by InvestingPro. The company's revenue growth of 42.39% over the last twelve months and 31.8% in the most recent quarter suggests a strong trajectory that could be further bolstered by this strategic acquisition.
InvestingPro Tips point out that analysts anticipate sales growth in the current year, which is consistent with Onfolio's expansion strategy through acquisitions like Eastern Standard. The company's move to acquire a profitable business with $4 million in revenue and $630,000 in adjusted EBITDA could help address another InvestingPro Tip, which notes that Onfolio has not been profitable over the last twelve months.
The acquisition structure, which avoided upfront cash payments, appears prudent given another InvestingPro Tip indicating that Onfolio's short-term obligations exceed its liquid assets. This approach may help the company maintain financial flexibility while pursuing growth.
It's worth noting that Onfolio's stock has seen a significant 70.83% price increase over the last six months, according to InvestingPro Data. This upward trend could reflect market optimism about the company's acquisition-driven growth strategy.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Onfolio Holdings Inc., providing a deeper understanding of the company's financial health and market position.
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