Transol (ASX:TNC) has acquired the 20% it did not already own of digital music distribution business Valleyarm Digital.
Under the arrangement, Transol has paid 30 million shares to the stakeholders and increased its loan to Valleyarm Digital from $300,000 to $400,000.
A further 10 million shares will be paid if Valleyarm achieves $500,000 profit in any twelve-month period over the next 18 months.
The new funds will go towards the development of the Valleyarm business, including the hiring of three new programmers to help load digital content onto Valleyarm servers.
The Valleyarm business supplies music to mobile and online stores in the Asia-Pacific region.
Transol said Valleyarm had signed over 50,000 tracks and is close to signing deals in Europe and the USA which will give it the ability to bring over 500,000 tracks to Asia-Pacific stores in the first two quarters of 2011.
Transol is the owner of mining company Liberty Mining International. But the company has decided to recapitalise its mining interests through an IPO, and focus on the digital music and content market.
As well as Valleyarm, the company also owns technology assets in the form of CLTNet, developer of a computerised system used by governments and businesses to conduct competency based theory testing.
“The digital music sector is expanding rapidly and with digital sales in to lucrative markets such as Japan and China being the next obvious steps for Valleyarm, we look forward to may successful years ahead with Transol,” a Valleyarm spokesperson said.
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