In June, Snapchat publicized its first acquisition public.
Snapchat had acquired AddLive, a company that had the ability to power the technology behind its video chat feature. The deal terms were not announced.
But a leaked email exchange between Snapchat board member Michael Lynton and Snapchat’s executives reveals Snapchat paid $US30 million for Addlive (Live Foundry): $US10 million in cash and $US20 million in RSUs and employee incentives.
The leaked exchange is part of a massive Sony email hack.
“The short of it is that they do the backend for our video chat and we’re trying to buy them prior to launch,” a Snapchat employee explained the acquisition to Lynton in an email.
The majority of the payout went to the CEO, Kavan Seggie, who had four times more stock than the next nearest executive.
Here’s the relevant portion of the board-approved email, dated April 28, 2014:
Approval of Stock Purchase Agreement
Whereas, the Board of Directors (the “Board“) of Snapchat, Inc. (the “Company“) has reviewed the proposed Stock Purchase Agreement (the “Stock Purchase Agreement“), by and among the Company, LiveFoundry, Inc. (the “Target”), the stockholders of Target and Mr. Kavan Seggie as the stockholders’ agent, in substantially the form of Exhibit A hereto, pursuant to which the Company would acquire all the shares of Target and Target will become a wholly-owned subsidiary of the Company (the “Transaction“);
Whereas, the Board has discussed a proposal to acquire Target through the Transaction in exchange for an aggregate purchase price of approximately $US30,000,000, consisting of (a) an aggregate amount of $US10,000,000 cash that will be paid to the selling stockholders at the closing (the “Closing”) (less the cost of the Target’s transaction expenses, unrepaid indebtedness for borrowed money, and as may be subject to certain other adjustments more fully set forth in the Purchase Agreement) and (b) the issuance of a number of shares of common stock of the Company having an aggregate value equal to approximately $US20,000,000 (the consideration described in clauses (a) and (b), collectively, the “Purchase Price“);