Friday 27th September 2019
|Text too small?|
IkeGPS will raise up to $6.5 million at a small discount to buy US engineering software developer PLT for as much as US$3.4 million in cash and shares.
The US firm is profitable and will immediately add to Ike's earnings, but will also open up a chance of cross-selling the IKE Analyze product to a wider customer base, it said in a statement. PLT is forecast to generate a profit of US$300,000 on revenue of US$800,000 in calendar 2019.
Ike will pay US$2.5 million for the acquisition with a potential earn-out of up US$900,000 over a three year period, provided PLT's founder remains employed by Ike. The New Zealand firm will pay US$1.75 million in cash upfront and issue US$750,000 of shares at 60 cents apiece. The earn-outs will also be a 70/30 split between cash and shares, with the issue price at 60 cents.
"This acquisition allows us to bring their technology in-house and opens up a number of additional pathways for growth, including through marketing to a broader customer base and an enhanced product offering," Ike chief executive Glenn Milnes said.
Ike will fund the acquisition selling shares at 60 cents apiece, a small discount to the 64 cents they closed at yesterday. Of that, $5 million was raised overnight in a placement to investors, and another $1 million be sold in a retail offer to existing shareholders, with the ability to accept $500,000 over over-subscriptions.
The shares were unchanged when the market opened this morning.
The retail offer opens on Oct. 1 and closes on Oct. 17.
Ike this month said it may break even in the September quarter, with the IKE Analyze product driving revenue growth and wider margins. At the time, it said its cash and receivables should be $4.5-4.8 million at the end of September, in line with the $4.9 million held at the end of March.
No comments yet
NZ dollar stalls amid doubts on US-China trade deal
Tourist numbers perk up in August as Aussies more than offset declining Asian demand
Peters to unions: strikes not helpful; no word on Fair Pay Agreements
Oil and gas critical to global emissions reduction effort - BP
Ebos pays A$34m for medical devices businesses
House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements