- SONM shares rallied over 10% on news of a $17.5M subscription agreement with AJP Holding Company
- The transaction will allow the company to expand into semi-rugged products and industrial 5G markets
- Sonim can build on existing relationships with Tier One mobile carries in the US
Shares of Sonim Technologies (NASDAQ: SONM) rallied over 10% this morning after news that the specialist provider of ultra-rugged mobile devices, accessories and solutions gas entered into a subscription agreement with AJP Holding Company.
The terms of the agreement involve the company purchasing a total of 20.8M shares totalling a price of $17.5M on $0.84 per share. Should the transaction reach completion following shareholder approval, AJP will own 52% of Sonim’s post-transaction outstanding capital stock, based on an estimated 19.3M shares outstanding prior to the transaction.
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The transaction with AJP will allow the company to expand from its core market in ultra-rugged mobile devices into what the company has called ‘semi-rugged’ and industrial 5G markets. The new endeavor is expected to drive revenue growth, increase operational efficiency, and accelerate product development at a lower cost, all whilst broadening the market horizons for Sonim.
Somin already have ‘deep’ relationships with all of the Tier One mobile carriers in North America, providing the company with an outstanding launching point on which to bring a wider array of 5G ‘semi-rugged' products.
Peter Luim, CEO, outlines his promising outlook for Somin:
“We believe Sonim can become the top middle market rugged and industrial device provider in North America, offering a wider range of 5G smartphones, feature phones, mobile hotspots and other industrial communications equipment that incorporate our rugged heritage. Our expanded ODM relationships will at the same time help us accelerate new products, reduce development and manufacturing cost and maximize the value of Sonim's highly regarded brand.”