Connexa Sports Technologies Inc. (CNXA) revealed on Thursday its definitive plans to buy a 70% stake in Yuanyu Enterprise Management Co., Limited, also known as YYEM. The deal is valued at $56 million. Concurrently, Connexa's shares on Nasdaq saw a boost of approximately 13 percent during pre-market trading.
The agreement also mandates a change in control of Connexa. This includes divesting the Slinger Bag enterprise to a freshly formed entity. YYEM, based in Hong Kong, specializes in the budding industry of love and marriage solutions. This unique field benefits from exclusive intellectual property rights owned by YYEM. The company's matchmaker AI application, capable of integrating with Big Data models and larger AI models, stands out. Furthermore, YYEM holds the ownership of six metaverse-related technologies and nine AI matchmaking patents.
The transaction will progress in two phases. Initially, a 20% stake will be bought for $16.5 million in cash. The remaining 50% share will be finalized on the closing date via the issue of common stock. Following the deal, Connexa's control will change as a new board of directors takes over. Slinger Bag Americas will subsequently be carved off to a newly launched entity.
Connexa's CEO, Mike Ballardie, remarked positively on the deal. Acknowledging the potential of YYEM's business sector and their growth plans, which include expanding organically in Asia and implementing an aggressive international licensing program, he expressed confidence that this venture would offer Connexa's existing shareholders an opportunity to share in YYEM's success.
