dcsimg
RealTime IT News

Chell.com Gains Instant Legitimacy

Never say that the days of good ole ingenuity are dead.

Chell.com Ltd. found its way onto the Nasdaq Tuesday with its reverse acquisition of Toronto-based Networks North Inc..

Networks North paid $28.6 million in stock for Chell.com's ASP assets, investments and operating infrastructure. The name "Networks North" will be replaced by "Chell Merchant Capital Group," and the entire management team and staff will be succeeded by Chell.com's own management team and staff.

Peter Rona, Networks North president and chief executive officer, will be replaced after he buys out Chell.com. His successor: Cameron Chell, president and chief executive officer of Chell.com. Chell.com will also be the majority shareholder in the new

Sound confusing? At first glance, it looks like Networks North just paid Chell.com to take over its business. In essence, that's exactly what happened.

Networks North is a popular 15-year-old interactive television service located throughout the U.S. and Canada. If you've ever been to a sports bar featuring live trivia contests on the television, chances are its Networks North programming you're watching. The company also provides television programming for more than 200 hotels.

Taking a bricks-and-mortar company specializing in analog signal transmissions and molding it into a streamlined ASP juggernaut takes a lot of time, effort and money, resources Networks North didn't want to expend

Rona said his company has seen the potential in the ASP industry for a couple of years now, but didn't know where to start. That's where Chell and his team came in.

"Our companies have had similar goals, and we started to recognize that software, as well as applications, take a lot of effort to build up," Rona said. "We decided to leave it to the experts. You can see that the trend with a lot of brick-and-mortar companies is going from building its own infrastructure and server farms to getting an outside source to do it for them."

However, things didn't start smoothly between the companies. On April 3, Chell's intentions towards Networks North became clear when the Chell Merchant Capital Group bought out the largest outside shareholder. It was only until after talks began that Rona realized what the ASP had to offer.

"As we came together for talks, we recognized what we had with Chell," Rona said. "We recognized we had someone who was successful with other ASP companies, helping them achieve an amazing market cap in a relatively short time."

It's a pretty mature outlook for a company that's been around 14 years before Chell.com even launched its incubator service. It's like a teenager asking advice from a one-year-old, but that's why Rona and his shareholders sold the company in stock. They're banking on Chell to take their business to greater financial heights.

Networks North is now part of Chell's "strategy bank," which includes other hopefuls cMeRun Corp. and JAWS Technologies, Inc.. It's $28.6 million entry fee gives the company a big minority stake in all Chell.com ventures.

An integration team has been formed to determine the best fit for everyone involved in the new company. After the changeover is finalized Sept. 8, Rona expects to see his company's $25 million market cap to jump significantly once it's amalgamated into the Chell incubator. The new stock symbol on the Nasdaq exchange will then be announced.

"We believe this strategic transaction gives us the ability to transition into leading strategic aspects of the ASP industry," Rona said. "As a result, all the companies in our portfolio will have the opportunity to become market leaders in the ASP industry."

Chell



×
We have made updates to our Privacy Policy to reflect the implementation of the General Data Protection Regulation.