Zagg buys smartphone accessories maker

Reuters News
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Posted: Jun 22, 2011 2:18 PM
Zagg buys smartphone accessories maker

By Nadia Damouni

NEW YORK (Reuters) - ZAGG Inc announced on Tuesday that it has bought privately held mobile device accessories company iFrogz Inc for about $105 million.

ZAGG, which manufactures accessories for hand-held devices, bought all of the outstanding stock of iFrogz for $50 million in cash, 4.4 million restricted shares of ZAGG common stock, and assumed about $5 million of outstanding debt.

iFrogz will operate as a wholly owned subsidiary of ZAGG, led by its current president and co-founder Scott Huskinson.

ZAGG, which counts AT&T, Best Buy Co Inc, Navarre Corp as its clients, will add Wal-Mart Stores Inc, DAS, Wynit Inc, 7-Eleven, Tessco Technologies Inc and Micro Center to its portfolio through the acquisition.

In 2010 iFrogz generated nearly $41 million of revenue, and is expected to generate over $60 million of revenue in 2011.

ZAGG expects the acquisition to be immediately accretive on an earnings per share basis, excluding one-time transaction related expenses.

The cash portion of the purchase price, as well as certain closing fees and expenses, are being financed through a new senior credit facility led by Cerberus Business Finance and PNC Bank.

This is ZAGG's first acquisition since going public four years ago, ZAGG Chief Executive Robert G. Pedersen II told Reuters. He said he did not see ZAGG making other acquisitions in the near term.

The transaction closed on Tuesday, Pedersen said.

Shares of Salt Lake City, Utah-based ZAGG closed up 48 cents, or 3.98 percent, on Tuesday at $12.60.

(Additional reporting by Rachana Khanzode in Bangalore; editing by Carol Bishopric and Don Sebastian)