Electronics design software company Altium (ASX:ALU) has moved to secure a slice of the growing cloud services market, announcing its intention to acquire local cloud application development company Morfik Technology.
The deal will see Altium exchange 13.3 million fully paid ordinary shares, or some 14.9 per cent of its outstanding shares, for 100 per cent of Morfik’s outstanding shares.
With Altium’s shares are currently trading at $0.25 the deal is worth approximately $3.325 million.
Under the deal Morfik’s entire staff will join Altium all Morfik’s IP and other assets, which are located in Sydney, Hobart, and Kiev in Ukraine will be transferred to Altium.
Morfik’s CEO, Aram Mirkazemi, will join Altium’s executive team as chief of engineering and will be responsible for helping define research and development strategy and directing product development.
According to an Altium statement to the ASX on the transaction, Altium has been using Morfik's technology and development tools for a number of years in the development of its own Web-based infrastructure.
“The reason that Altium is moving to acquire Morfik is to bolster Altium’s engineering team and technological capabilities in the Web application domain, and accelerate the development of this platform for Altium’s customers,” the ASX statement reads.
“When developed, this will also let electronics designers develop their own ecosystems of intelligent, connected devices, running their own cloud-based applications. These ‘device ecosystems’ will provide the next generation of experiences for their customers.”
Altium said it also intended to continue Morfik's existing business model, for existing Morfik customers, which is based on selling software tools and subscriptions for building web-based applications.
“Historically, Morfik has focused on building cloud applications that serve conventional personal computers,” the statement reads. “This focus will now expand to include the more application-specific devices created by electronics designers that will be part of the next generation of the Internet.”
The news follows the announcement in late August that Altium had been hit hard by the global downturn, recording a loss after income tax of $US10.4 million for the year to 30 June 2010. The result follows a $US8.39 million loss in the 2009 financial year.