Pivotal Self-Service Technologies Inc. acquired Phantom Fiber Corp. Thursday in a reverse takeover.
A reverse takeover, in which a private company goes public without filing a prospectus and undertaking a IPO, will allow
Toronto-based Phantom Fiber, the name by which the merged company will be known, to be listed on the NASDAQ Stock Market.
“”This is just an expeditious method for Phantom Fiber to get its listing,”” said Jeff Halloran, president and CEO of Phantom Fiber. “”We were debating with doing a traditional VC round or a public offering, and that takes its time and has its costs.””
The acquisition will allow Phantom Fiber, a developer of wireless technology and mobile devices, to tap the working capital of King City, Ont.-based Pivotal, a distributor and sales representative of electronic products, said Halloran.
In the order of about “”US$1.5 million to start,”” the money will “”expand our current contracts and our current contract base and help us further penetrate into other markets”” through acquisitions, he said.
Phantom Fiber serves primary industries like gaming, entertainment and security, but has focused recently on warehouse management systems and logistics, brokerage and financial applications, and the insurance sector, Halloran explained. One of its flagship technologies is called Smart Streaming, which helps clients constrained by bandwidth shortage problems.
Pivotal CEO John Simmonds describes as outstanding Phantom Fiber’s technology and thinks it will be lucrative over time. “”If (Halloran) can do what he says he’s going to do, and has the subscriber base that he’s aiming for, the business model is very exciting and this could be a billion-dollar company in the next few years. Halloran cannot divulge Phantom Fiber’s current annual revenues.
“”He certainly has suggested to me that in a relatively short time, within the next year or so, he should have certainly over 100,000 subscribers.””
Halloran said the company has only about eight customers that it can disclose at the moment, but each client tends to bring in a hundred operators or end users. “”We are in just about every country, as we have a global consumer product in the gaming sector and these clients have global reach.””
Pivotal’s purchase of Phantom Fiber will also allow Halloran to step up recruitment. He said about 12 people will be added mainly on the technical side but also in sales and marketing.
Phantom Fiber is ready to take advantage of the many opportunities in the growing mobile marketplace, such as the growth of iMode technology in Europe and wireless 911 requirements in the U.S., but Halloran cannot divulge its long-term plans yet.