WILMINGTON, Del. - Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW), which specializes in acquiring and managing online businesses, has announced its plans to purchase a majority stake in DDS Rank, a digital marketing firm for dentists. The acquisition, valued at $600,000, is expected to be finalized early next week.
DDS Rank, operating under SEO Marketing Inc., offers services such as search engine optimization, paid advertising, and web design to dental practices. In 2023, the company reported revenue of around $310,000 and unaudited adjusted EBITDA of $190,000. Onfolio aims to double these figures within the next two fiscal quarters through enhanced marketing efforts and operational efficiencies.
Onfolio's CEO, Dominic Wells, stated that DDS Rank's "significant untapped potential" made it an attractive acquisition target, despite being smaller than other candidates in Onfolio's pipeline. He also revealed that the company plans to boost DDS Rank's annualized revenue to over $600,000 and EBITDA to above $400,000 within months.
The deal will be carried out without utilizing any of Onfolio's cash or common shares. Instead, Onfolio's Special Purpose Vehicle, Onfolio Agency SPV LLC, will contribute $200,000 in return for a 34% stake in DDS Rank. Onfolio itself will secure a 66% interest through $200,000 of Series A Preferred Shares and a secured promissory note of $200,000 due May 31, 2026. These securities will pay dividends and interest but won't convert into common shares.
Wells highlighted that the non-dilutive funding from the special purpose vehicle has positioned Onfolio to finalize the acquisition and others like it, with sufficient capital on hand. He also mentioned that another acquisition is anticipated later this month, moving the company towards profitability without additional equity capital.
DDS Rank primarily generates subscription-based recurring revenue, with about 91% of its revenue coming from such sources. The company is recognized for helping dental practices enhance online visibility and increase web traffic, leading to more patient appointments.
Onfolio Holdings focuses on acquiring businesses that operate in sectors with long-term growth potential, exhibit stable cash flows, and can be seamlessly integrated into its management structure or have strong existing management teams. The company prides itself on identifying and enhancing the value of businesses that have not been fully optimized by their previous owners.
The information for this article is based on a press release statement from Onfolio Holdings Inc.
In other recent news, Onfolio Holdings has made a significant move by acquiring the business assets of First Page Strategy through its subsidiary, RevenueZen. This strategic acquisition, involving a nominal upfront cash payment and a 36-month revenue sharing agreement, is expected to bring about substantial cost savings and additional revenue for Onfolio.
First Page Strategy, a B2B content marketing, SEO, and advertising consulting firm, reported approximately $190k in revenue for the first quarter of 2024, implying an annualized revenue run rate of $760k.
The acquisition is seen as a strategic move to consolidate work previously outsourced to competitors, thereby augmenting Onfolio's position in the online business management sector. The integration of First Page Strategy's expertise into RevenueZen's operations was emphasized by both Onfolio CEO Dominic Wells and RevenueZen CEO Rocky Pedden.
InvestingPro Insights
As Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW) embarks on its strategic acquisition of DDS Rank, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, Onfolio boasts a market capitalization of 5.39M USD, reflecting its position in the market. The company's revenue growth is notably robust, with a 71.87% increase over the last twelve months as of Q1 2024, and a quarterly revenue growth of 17.4% in Q1 2024, indicating a strong upward trajectory that could be further bolstered by the DDS Rank deal.
InvestingPro Tips highlight that Onfolio's stock generally trades with high price volatility, which investors should consider when evaluating the company's risk profile. Additionally, the company has demonstrated a strong return over the last three months, with a 115.51% price total return, showcasing the potential for significant investor gains. It's also worth noting that analysts predict Onfolio will be profitable this year, aligning with the company's own objectives following the DDS Rank acquisition.
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