Following the announcement of a significant acquisition, shares of The Singing Machine Company, Inc. (NASDAQ: MICS) have seen a notable rise in the US stock market. As of the most recent pre-market session, MICS stock experienced a 5.32% increase, reaching a price of $1.98.
Table of Contents
Toggle- Strategic Acquisition
- Benefits And Financial Details Of The Transaction
- Expansion Into The Indian Market
Strategic Acquisition
Singing Machine (MICS) disclosed that it has finalized a definitive agreement to acquire SemiCab, Inc., a prominent artificial intelligence technology company specializing in optimizing freight for Fortune 1000 clients across the US and Indian markets. SemiCab's AI technology is designed to create a hyper-efficient trucking network, achieving utilization levels exceeding 90%, significantly higher than the industry standard of 65%.
This technology links thousands of stakeholders on a single network, formulating fully optimized transit routes that enhance cost efficiencies for both customers and shippers. The founder of SemiCab and its software development team bring over 30 years of expertise in developing sophisticated software solutions for the global freight and logistics market.
Benefits And Financial Details Of The Transaction
Singing Machine's decision to acquire SemiCab stems from the latter's innovative AI-powered technology and its impressive client base eager to expand existing partnerships. SemiCab's technology provides substantial cost savings and efficiencies, benefiting both carriers and Fortune 1000 clients.Singing Machine perceives this acquisition as a transformative step towards enhancing growth prospects, creating shareholder value, and scaling SemiCab into a formidable global entity in the logistics sector for the foreseeable future.
The acquisition is structured as an asset purchase/sale. Upon closing, Singing Machine will issue 952,710 shares of its common stock to SemiCab, equating to approximately 15% of the Company's issued and outstanding common stock as of June 11, 2024, and will assume around $2.6 million in liabilities as of March 31, 2024. Additionally, Singing Machine will grant SemiCab a 20% membership interest in its newly formed wholly-owned subsidiary, SemiCab Holdings, LLC.
Expansion Into The Indian Market
As part of the acquisition agreement, Singing Machine has also secured an option to acquire SMCB Solutions Private Limited, SemiCab's wholly-owned subsidiary based in Bangalore, India. This subsidiary caters to the technological needs of the combined businesses and serves India-based enterprise customers. The consideration for this segment of the transaction includes an additional 314,485 shares of Singing Machine's common stock.