NQ Mobile To Sell 5.88% Stake In FL Mobile; Sees Q1 Revenue To Exceed Prior View

(RTTNews) - NQ Mobile Inc. (NQ), a provider of mobile Internet services, announced Friday that it agreed to sell a minority interest in its wholly owned subsidiary, FL Mobile. The company announced the updated revenue guidance for its first quarter ended March 31, 2014. In addition, the company also announced its initial outlook for the second quarter of 2014.

Specifically, NQ Mobile has signed a definitive agreement to sell up to 5.88% of FL Mobile, or up to a total of $25 million, consisting of $15 million to Bison Mobile Limited, a division of Bison Capital Co Ltd and $10 million from other investors, at a pre-money valuation of $400 million dollars or post-money valuation of $425 million. The funds will be used to further expand and enhance the FL Mobile business, brand and content. The investment has a redemption right if FL Mobile does not complete a qualified IPO within 12 months after the investment is completed.

In addition, the company said it now expects first quarter 2014 net revenues to exceed the previously announced revenue guidance range of $75 million - $76 million, an increase of over 125% over the prior year comparable period. Analysts polled by Thomson Reuters expect the company to report revenues of $75.27 million for the first-quarter. Analysts' estimates typically exclude special items.

The company today also provided its initial net revenue outlook for its second quarter 2014. It expects net revenues for the second quarter 2014 to be between $83 million and $84 million, compared with $41.4 million in the second quarter 2013. Analysts expect the company to report revenues of $78.88 million for the second-quarter.