The Bigtincan Holdings Ltd (ASX: BTH) share price has edged lower this morning after announcing a key acquisition and placement of shares.
In early trade the sales enablement automation platform provider's shares have dropped 1.5% to 59 cents.
What did Bigtincan announce?
This morning Bigtincan announced that it has entered into a binding stock purchase agreement with Xinnovation, Inc. and its shareholders to acquire all of its issued stock.
Xinnovation is a Boston-based leader in sales enablement for financial services organisations and has created the next generation of technology for document automation. Management believes this adds key technology capabilities to the Bigtincan platform.
It will also add approximately $3 million to its Annualised Recurring Revenue (ARR) across 15 customers, which include Prudential, Mass Mutual, John Hancock, and State Street Global Advisors.
According to the release, Bigtincan has agreed to pay an up-front cash payment of US$4.5 million on the closing of the transaction, subject to adjustment for working capital, indebtedness, and transaction expenses.
A payment of US$0.5 million will also be due on or before the first anniversary of its closing, subject to set-off of any amounts owed by the sellers to Bigtincan.
Bigtincan will also issue shares with a value of US$2.5 million and an issue price equal to the 30-day VWAP of shares in Bigtincan immediately prior to the closing of the deal. Approximately 62.5% of the shares being issued will be subject to voluntary escrow restrictions for 12 months and be subject to forfeiture if the executive voluntarily leaves the employment of Bigtincan without good reason.
In order to fund the deal, Bigtincan has completed a $20 million institutional placement at 54 cents per share. This is a discount of 10% to its last close price. The remaining funds will be used for other acquisitions that meet Bigtincan's criteria, integration, and working capital purposes.
