Family-focused social media platform Tinybeans (ASX:TNY) is spending $11m to buy Red Tricycle, an American parenting website it has long admired.

Red Tricycle was founded in 2010 and provides ideas for family activities to its readers.

It made $5.3m in the last 12 months, has 2 million monthly active users and is profitable.

“We have admired Red Tricycle for some time and are delighted to acquire the business,” CEO Eddie Geller said.

“The transaction makes compelling strategic and financial sense and propels Tinybeans in terms of scale, technology and revenues.”

Tinybeans told shareholders the purchase would help it consolidate operations in the US since it would be transitioning its engineering capabilities to New York. Additionally, over 95 per cent of Tinybeans’ revenues and 85 per cent of its audience is in the US.

Since Tinybeans targets children up to age six and Red Tricycle’s demographic extends to age 13, this extends Tinybeans’ retention through the parenting journey.

Over $9m of the purchase will be in cash, and the remainder in Tinybeans shares.

Tinybeans shares fell 7 per cent this morning to just below $2 — the price it announced a share purchase plan at. But the company is still up over 400 per cent in 12 months. This time last year it sat at 37c.


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In other ASX corporate news today:

Logistics software provider Getswift (ASX:GSW) also announced an acquisition this morning. It will buy a majority stake in European information and communications tech firm Logo. The company said the purchase would position the new company as a one stop shop and help it work with larger enterprise clients. It will pay €5.5M ($9.1M), entirely funded with cash from its balance sheet.

This morning, Chinese tech company Botai Technology (ASX:BTK) suffered the fate of removal from the ASX. Botai was accused of multiple breaches of the ASX disclosure rules and has been uncontactable for five months even after being threatened with removal.