TV2U strengthens intellectual property portfolio with Talico deal

TV2U International ASX Talico IP revenue
TV2U anticipates that its acquisition of Talico's IP portfolio will bring in near-term revenues and as such no longer needs to undertake a planned $2.5 million capital raising.

TV2U International (ASX: TV2) has completed its previously announced acquisition of Talico Technologies’ intellectual property (IP) portfolio with the deal expected to bring in new short-term revenues for the company.

Following on from an initial deal made in January, the internet TV enabler today announced it has signed a definitive agreement with Talico which includes the acquisition of its Internet of Things (IoT) and over-the-top (OTT) IP, along with all IoT-focused commercial projects currently undertaken by Talico.

In the original announcement, TV2U said completion of the deal was subject to the company raising at least $2.5 million in additional funds to ramp up TV2U’s sales and marketing initiatives to pull through revenue from both existing and new customers.

But in today’s update, the company today said the Talico IP deal is set to have a positive material impact – so much so that this $2.5 million capital raise is no longer required.

“TV2U expects Talico commercial projects to generate revenues in a shorter time frame, which will sustain the company and its marketing and sales efforts without the need for that capital raise,” it stated.

Talico technology

UK-based Talico is a technology incubator and developer boasting major clients including Toshiba, investment bank Barclays, market research firm AC Nielsen and insurance company Chubb.

TV2U believes its acquisition of all of Talico’s digital analytics, video and IoT IP would enable it to maximise opportunities and grow revenues from its existing and future OTT/internet protocol television (IPTV) deployments, as well as become a technology enabler of choice for IoT players.

The company described this acquisition as adding “new spokes to TV2U’s existing wheel” without the need to “reinvent the wheel” by bolstering the company’s incremental revenue generating capabilities without incurring additional research and development costs or overhead outlays.

“TV2U’s foothold in the OTT/IPTV market and the capability of our iVAN-X platform, have created the opportunity to package this technology for other vertical markets,” TV2U chairman Phil McKeiver said.

“The agreement with Talico will help us to expand our product suite with additional cloud-based functionality and leading-edge digital analytics that can be customised for different markets and customer needs, opening up access to new sectors,” he added.

It should also be noted that Talico is privately owned by TV2U chief executive officer Nick Fitzgerald.

In the January announcement, TV2U said Talico would only receive consideration from the deal as and when real value emerges for TV2U from the commercialisation of the IP.

No upfront or cash consideration has been offered, with Talico instead having the potential to receive performance shares over time (once TV2U generates net profit).

Talico projects build momentum

Since the January announcement, Talico’s commercial projects have advanced ahead of project timelines and require ongoing technical support, which TV2U said it would provide.

This will effectively split TV2U’s business model between IoT consultancy and IoT/OTT platform delivery, as well as resell opportunities.

In addition, Talico’s existing partnership with Canadian company Alert Labs has expanded to include deployments in other regions in the future with a new project launch anticipated in the UK market later this year.

According to TV2U, Talico is also negotiating several new projects and strategic partnerships and TV2U is in talks with its existing customers to roll out IoT-powered solutions as an add-on to their existing OTT deployments.

Shares in TV2U were up 22% to $0.011 by midday.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.