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Motopia mulls claim for underperforming M&A

Motopia mulls claim for underperforming M&A

Motopia (ASX:MOT) may seek a warranty claim to offset the cost of its $8m purchase of mConnect, after the benefits fell short of seller-provided forecasts

Mobile content and marketing company Motopia (ASX:MOT) may make a warranty claim on its mConnect acquisition, after the deal failed to pay off as expected.

The company, which acquired mConnect in March as it changed focus from healthcare to mobile content, said the financial performance from the acquisition had not met forecasts provided by the vendors.

A successful warranty claim would offset the price of the $8 million acquisition.

Reflecting the underperformance, Motopia maintained its guidance of an expected ebitda loss of nearly $1.1 million in calendar 2011.

But the company, which reported a net loss of $4 million for the December half last year, expects a change of fortunes in 2012.

The company is forecasting a positive ebitda of $5.3 million for the year. Revenue is likewise projected to grow to $13.2 million in 2012, from $5.6 million this calendar year.

Last month, Motopia revealed it expects to revenue of $3 million next year from its new mobile marketing platform alone.

MOT shares stayed flat on Monday at $0.051.

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