White Reveals Value Of Intagio
On August 1, 2007, ITEX announced it
had acquired the trade exchange marketplace previously operated by
Intagio Corporation. The final purchase price was $3,137,000,
including certain accounts receivable.
In addition, the purchase agreement
encompassed a revenue based earn-out payment up to $150,000, based
on certain performance requirements. After assimilating the new
members and identifying overlapping accounts, ITEX summarized the
Total business membership of more
July cash revenue exclusively from
the new Intagio members of $125,000;
Additional monthly operational net
income estimated to be approximately $50,000, excluding member
overhead estimated to be $75,000 per month, including staffing
costs, office leases, and general costs related to the acquired
�We are pleased to see the current
metrics of this acquisition holding up very strongly,� declared ITEX
Chairman and CEO Steven White. �The numbers stated above are
reported net of estimated allowances for inactive accounts and
estimated reserves for uncollectible accounts.
�There are several valuation methods
we consider when determining acquisition price, including member
cost, cash flow, opportunity costs, future revenue and net income.
We place a high emphasis on operational income and cash flows from
operations, which are both expected to be positively impacted by
White continued, �The purchase price
for this acquisition was analyzed differently from the Business
Exchange (BXI) purchase two years ago. The primary difference is
that we do not share revenue with independently licensed offices.
Furthermore, we have the option to retain or resell the new offices
to existing or future franchisees, allowing us more opportunities to
capitalize on the transaction.�