WINDSOR MILLS, MD - Connexa Sports Technologies Inc. (NASDAQ:CNXA) announced today, subject to shareholder approval, its plans to acquire a 70% interest in Yuanyu Enterprise Management Co., Limited (YYEM), a company specializing in matchmaking services. The acquisition is valued at $56 million and is part of Connexa's strategy to enhance shareholder value by expanding into the emerging love & marriage sector.
The deal will proceed in two stages. The initial 20% stake has been acquired for $16.5 million in cash, with the remaining 50% to be obtained through the issuance of common stock on the closing date. Following the transaction, Connexa will undergo a board restructuring and divest its Slinger Bag Americas business.
YYEM, established in November 2021 and based in Hong Kong, operates in the love & marriage market and holds numerous patents and technologies, including six related to the metaverse and nine AI matchmaking patents. These technologies have allowed YYEM to establish a significant presence in China, where it has partnered with a licensee to operate 200 Hand-in-Hand branded retail stores.
The company's unique business model combines online activities with retail operations, setting it apart from competitors. YYEM's retail stores are expected to increase to 1,000 in 2024 and to 10,000 within three years. This expansion is anticipated to grow the registered subscriber base to over 3 million in 2024.
In the fiscal year ending January 31, 2024, YYEM reported royalty revenues of approximately $1.9 million and has secured licensing agreements projected to generate over $70 million in the next three years. The agreements cover various regions, including the UK, Europe, South East Asia, and Sub-Saharan Africa.
Mike Ballardie, CEO of Connexa, expressed confidence in the acquisition, citing YYEM's growth opportunities and the potential for shareholder value enhancement. YYEM Chairman Mr. Zhou also welcomed the merger, envisioning YYEM as a global leader in the matchmaking industry.
Connexa Sports is a connected sports company focused on technological innovation in sports, while YYEM operates in the love & marriage sector with a focus on big data and matchmaking analyses. The proposed acquisition is set to be finalized following shareholder approval as detailed in a proxy statement to be filed with the SEC.
This news is based on a press release statement.
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