Paltalk, Inc. has announced a definitive agreement to acquire Newtek Technology Solutions, Inc. for $4 million in cash and 4 million shares of preferred stock. This acquisition aims to enhance Paltalk’s capabilities in dedicated server hosting, cloud services, and managed security, significantly expanding its customer base across the U.S. government and intelligence sectors. The deal is expected to close in late 2024 or early 2025, subject to stockholder and regulatory approvals.
Newtek Technology Solutions is recognized for its expertise in providing end-to-end cybersecurity and technology solutions for enterprise and commercial clients. The acquisition will enable Paltalk to leverage NTS’s established market presence and technological expertise, particularly in light of the growing demand for cloud infrastructure and cybersecurity services. This strategic move aligns with Paltalk’s goal of increasing its revenue and optimizing future growth opportunities.
The transaction also involves a divestiture requirement for Paltalk, which must sell its applications, including Paltalk, Camfrog, and Tinychat, as a condition for completing the acquisition. This step is necessary to comply with regulatory obligations following Newtek’s transition to a financial holding company. Once finalized, the acquisition will result in approximately 30.3% equity interest for Newtek in Paltalk, enhancing collaboration and resource sharing between the two companies.
Paltalk’s management is confident that this acquisition will provide significant value to its stockholders and improve its market positioning in the cloud and cybersecurity sectors. With the addition of NTS’s team, Paltalk anticipates creating a robust platform for growth and innovation, while continuing to meet the cybersecurity needs of its diverse clientele. The acquisition represents a pivotal step in Paltalk’s transformation and expansion strategy, aiming to secure its place in an increasingly competitive technology landscape.
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