More Mobile Ad Deals: Augme Acquires Hipcricket for $44.5 Million

Factoring in Potential Earn-out of $27.5 Million, Deal Could Hit $72 Million

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Mobile marketing firm Augme Technologies agreed to acquire competitor Hipcricket for $44.5 million in cash and common stock. With a potential earn-out of $27.5 million, the deal could hit $72 million.

Just last month, Augme acquired quick-response (QR) code company Jagtag for $5.5 million, signaling it'll be an active party in the much-needed consolidation of mobile advertising, an industry flooded with small startups all looking to get into the same business.

To take a page from the early internet ad days of yore, think of Augme as an aQuantive of mobile: part agency services and many parts ad technology. Augme's existing technology, called Ad Life, sends out videos, text messages, coupons and the like for brands or agencies and then brings all the reporting and measurement together in one place. With Hipcricket, Augme gets a lot of that same complimentary technology as well as stronger text message services and means to better link to big brands' customer-response management tools or publishers' content systems. With Jagtag, Augme acquired better technology for QR codes, a way for consumers to scan images with their phone cameras to get more information on their devices.

Admittedly a much, much larger entity than Augme is today, aQuantive was, of course, acquired by Microsoft in 2007 for nearly $6 billion. But considering digital behemoths Google and Apple have made major mobile ad acquisitions already, it is not unlikely that a company such as Augme could see a similar fate. Augme is a public company with $2.8 million in revenue for fiscal year 2011. Revenue for fiscal 2012 is expected to spike to $16 million, according to public statements.

With Hipcricket, Augme will also get new clients such as Macy's , NBC, MillerCoors and Nestle if both companies' boards approve the deal later this month. The acquisition will also add a handful of North American offices and 55 in headcount to its existing 70.

While Augme is not aggressively scouting its next deal, the company keeping an eye out for more complementary mobile technology out there, said Augme CEO Paul Arena.

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