NEW YORK - Nixxy (NASDAQ:NIXX) has announced its intention to acquire a privately-held wholesale gifts business, marking a strategic move to expand its digital transformation efforts in traditional industries. The company signed a letter of intent, with the deal expected to be finalized alongside Nixxy's planned spin-off of CognoGroup, its remaining legacy assets from Recruiter.
The target, which remains unnamed pending due diligence, is projected to reach a Gross Merchandise Volume of $66 million and net revenues of $10 million for the year 2024. The acquisition is part of Nixxy's broader strategy to employ data and technology for revitalizing sectors that have yet to undergo significant technological disruption.
Nixxy is focused on acquiring businesses with stable operations and profitability that meet specific criteria, including net revenues of $10 million to $100 million and gross profit margins of 40% or higher. The company is leveraging its exclusive global licensing agreement with GoLogiq, Inc. to use the Radix AI platform, aiming to enhance small business operations through artificial intelligence.
With a goal to achieve an enterprise value of over $1 billion within the next 36 months, Nixxy is currently in advanced discussions with seven separate acquisition targets that align with its criteria. These initiatives are part of an operational transformation that Nixxy is undertaking to integrate advanced technology and data-driven insights into the operations of acquired businesses.
In addition to its acquisition strategy, Nixxy is building a strong leadership team with expertise in capital markets, mergers, acquisitions, and operational management, with key appointments to be announced in the coming weeks. The company is also updating its corporate website to better communicate its strategic direction and provide insights into its focus areas to shareholders and stakeholders.
This news comes with the disclaimer that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. The financial information regarding the target company is subject to due diligence, and investors are cautioned not to place undue reliance on this preliminary data.
The information in this article is based on a press release statement from Nixxy.
In other recent news, Nixxy, Inc. has revealed a strategic plan to acquire businesses in traditional markets, aiming for an enterprise value of over $1 billion within the next three years. The company's acquisition strategy focuses on businesses with net revenues of $10 million to $100 million and profit margins above 40%. To support this, Nixxy has secured a global exclusive licensing agreement with GoLogiq, Inc. for the Radix AI platform.
Rebranding from Recruiter.com Group, Inc., Nixxy has sold its website to Job Mobz, Inc. as part of its restructuring efforts. The company also repaid its outstanding senior debt by issuing 720,000 shares of common stock to a private investor. Furthermore, Nixxy amended its Asset Purchase Agreement with Job Mobz, introducing a non-refundable payment of $120,000 from Job Mobz, an interest compensation clause with a rate of 12.7%, and a penalty clause for non-completion by the deadline.
ZK International Group Co., Ltd. made an initial investment in Nixxy, acquiring 1,749,975 shares at $1.00 per share, with an option for an additional 2,000,000 shares at the same price. These developments are part of Nixxy's ongoing transition and restructuring efforts, which aim to optimize its services and deliver value to its stakeholders and investors.
InvestingPro Insights
As Nixxy (NASDAQ:NIXX) embarks on its ambitious acquisition strategy, InvestingPro data provides additional context to the company's financial position and market performance. Despite the company's plans for expansion, it's important to note that Nixxy's market capitalization stands at a modest $9.55 million, reflecting its current small-cap status.
InvestingPro Tips highlight that analysts anticipate sales growth for Nixxy in the current year, which aligns with the company's acquisition plans and projected revenue increases from target companies. This expectation of growth is particularly significant given that Nixxy's revenue for the last twelve months was only $0.72 million, with a substantial revenue decline of -93.81% over the same period.
The company's aggressive growth strategy comes at a time when its financial metrics show some challenges. InvestingPro data reveals that Nixxy is not currently profitable, with a negative gross profit margin of -13.43% and an operating income margin of -805.52% for the last twelve months. These figures underscore the importance of successful integration and operational improvements for the businesses Nixxy plans to acquire.
Interestingly, despite these financial hurdles, Nixxy's stock has shown strong performance recently. InvestingPro Tips indicate a high return over the last year, with price data showing a 51.92% increase over the past six months and an impressive 83.72% return over the last year. This market optimism may reflect investor confidence in Nixxy's transformation strategy and acquisition plans.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Nixxy, providing a deeper understanding of the company's financial health and market position as it pursues its ambitious growth plans.
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