Recently, Appen Limited revealed its plans to fully purchase Figure Eight Technologies for almost AU$340 million.
The AI and machine learning-based company, which is listed on the Australian Securities Exchange (ASX), is set to raise AU$285m by offering a new Appen share at AU$21.50 in a bid to finance the acquisition.
The purchase of Figure Eight Technologies will include an advance payment of about AU$250 million.
Appen intends to issue 13.3 million shares.
Upon completing the placement, Appen revealed its intention to roll out a non-underwritten share acquisition plan to its existing qualified shareholders.
After the advance payment is done, in accordance with the laid out terms, Figure Eight Technologies is expected to receive an earn-out consideration, which will be approximately AU$86 to 114 million.
The amount is expected to be paid in March 2020 and will be based on the FY19 revenue of Figure Eight.
Headquartered in San Francisco, Figure Eight focuses on machine learning, particularly revolving around the transformation of unstructured audio, video, text, and image into artificial intelligence (AI) training data.
Mark Brayan, the chief executive officer of Appen said that purchase of Figure Eight is expected to help his firm to continue capitalizing on the opportunities made available by artificial intelligence (AI), through integrating both enterprises.
Appen told its shareholders: “The combined business puts Appen in a strong position to deliver the increasing volume, quality, and speed requirements for high-quality training data.”
Brayan said that most of Appen’s operations are based on product development for leading technology companies.
“We’re a company that’s contributing to artificial intelligence through the subset of natural-language processing on the global stage, with nine out of 10 of the major technology companies around the world using our service,” said Brayan at the time.
“We improve, or enhance machine learning; speech systems — the likes of Siri and Cortana — are only as good as the data that they’re fed.”
Both companies revealed that all through 2019, Figure Eight will mainly function independently as an Appen division in a bid to make sure that it maintains its focus on customer delivery and product development.
Once 2019 ends, Figure Eight will then be wholly absorbed into Appen’s operations.
Both companies are anticipated to generate a combined revenue of approximately AU$405.8 million per year.
The deal between the two companies will be completed early in the coming month.
Back in November 2017, Appen purchased another California-based company, Leapforce, for 80 million dollars.
Leapforce is known for specializing in “search relevance”.
Since its inception, Appen has received several recognitions including, FlexJobs Top 100 Company to Watch for Remote Jobs, the winner of Deloitte 2018 Asia Pacific Technology Fast 500, Common Sense Advisory’s biggest language service provider in the Asia Pacific region and the winner of Deloitte 2017 Asia Pacific Technology Fast 500 among others.
The company has offices in various parts of the world including China, Australia, the United Kingdom, the USA, and the Philippines.