The Citadel Group Ltd (ASX: CGL) share price has been a strong performer on the Australian share market on Monday.
The shares of the software and services company specialising in information and data management finished the day over 6% higher at $8.21.
At one stage they were up as much as 9.5% at $8.45.
Why did the Citadel Group share price rocket higher today?
This morning Citadel announced the acquisition of Gruden Pty Ltd from IncentiaPay for $1.65 million.
According to the release, management believes the acquisition of Gruden, a government software-as-a-service business, further strengthens its platform capabilities and provides new government panel arrangements.
Gruden has developed and supports scalable software-as-a-service platforms, predominately in the eProcurement space, used by key government agencies across Australia.
Although it is just small acquisition, Citadel's CEO believes it will be a valuable one.
Darren Stanley said: "The acquisition of Gruden provides Citadel with valuable new SaaS platform capabilities and panel arrangements that we will leverage into new areas of government and private industry as we continue to execute on our strategy of managing information in complex environments."
The transaction was funded from the company's available cash and will be immediately earnings accretive.
In addition to this, the company revealed that it has been experiencing strong demand for its key product offering – Citadel-IX.
So far in FY 2019 the company has experienced a growing number of Citadel-IX users.
The good news is that it expects this trend to continue in the coming months as demand builds for the leading enterprise information management product.
Should you invest?
Although its shares are up 31% since the start of the year, at 20x earnings I don't believe it is too late to invest in this exciting tech company.
Given the importance of information management and the growing amount of data being created, I believe the company is likely to benefit from increasing demand for its software and services for the foreseeable future.
This could make it worth considering alongside fellow small cap tech shares ELMO Software Ltd (ASX: ELO) and Bravura Solutions Ltd (ASX: BVS).
