Digital marketing and consumer data management company Social Reality Inc SRAX were higher by as much as 28 percent premarket Monday in reaction to an M&A deal announcement before falling after the market open.
What Happened
Social Reality said early Monday morning it reached an agreement to sell a controlling interest in its health care and pharmaceutical digital advertising product line for $52.5 million to an affiliate of the private equity firm Halyard Capital. The business unit SRAXmd was launched in 2010 and works with ad agencies and brands to engage health care providers, consumers and patients.
Why It's Important
The transaction is consistent with the company's goal of leveraging proprietary technology to build and monetize verticals in direct advertising, SRAXmd CEO and Chairman Christopher Miglino said in a press release.
"This transaction gives us the benefit of the long-term growth we have been experiencing in MD, which we believe will be worth significantly more in the future while providing us the capital we need to grow our other verticals and to bring Big Token to market."
What's Next
The transaction is expected to close in early August and remains subject to customary closing conditions. Social Realty shares were trading down 8.89 percent to $5.10 at the time of publication Monday.
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