SALT LAKE CITY & SHANNON, Ireland--(BUSINESS WIRE)--ZAGG Inc. announced today the acquisition of privately held iFrogz, Inc. for approximately $105 million.
"This transaction represents an exciting next step in ZAGG's evolution, and gives us scale within the rapidly growing protective cases and audio products markets by allowing us to immediately broaden our product line and drive the growth of our retail footprint," said Robert G. Pedersen II, co-founder, president and CEO of ZAGG. "iFrogz is highly complementary to ZAGG in terms of brand positioning, product lines and customer base. This acquisition is a natural extension of our strategy to build complementary brands and increase overall market share by growing product lines and expanding distribution."
iFrogz designs, manufactures and distributes protective cases, headphones and earbuds, and other accessories for smartphones, tablets and mobile devices under the iFrogzTM and EarPollutionTM brands. The Company has built a reputation for selling high quality, fashionable products geared toward a youthful demographic at affordable price points. iFrogz products are sold worldwide through leading retailers such as AT&T, Best Buy and Walmart. The Company is based in Logan, Utah.
Scott Huskinson, president and co-founder of iFrogz, said, "We are excited to become part of the ZAGG team. iFrogz and ZAGG share similar cultures and a passion for designing innovative and functional products that enhance the mobile device experience of millions of consumers worldwide. Together, we plan to leverage our combined resources to expand our market share."
Under the terms of the definitive agreement, ZAGG acquired all of the outstanding stock of iFrogz for $50 million of cash, 4.4 million restricted shares of ZAGG common stock, and assumed approximately $5.0 million of outstanding debt. The cash portion of the purchase price, as well as certain closing fees and expenses, will be financed through a new senior credit facility led by Cerberus Business Finance and PNC Bank.
Going forward, iFrogz will operate as a wholly-owned subsidiary of ZAGG led by Mr. Huskinson and will continue to be based in Logan, Utah. In 2010, iFrogz generated $40.9 million of revenue, and for 2011, is expected to generate over $60 million of revenue with operating margins in line with ZAGG's previously disclosed guidance. ZAGG expects the acquisition to be immediately accretive on an earnings per share basis, excluding one-time transaction-related expenses. ZAGG will provide updated consolidated guidance on its second quarter earnings call.