The ReadyTech Holdings Ltd (ASX: RDY) share price will be one to watch on Wednesday.
This follows the release of an announcement after the market close on Tuesday.
What did ReadyTech announce?
This afternoon the education and workforce solutions software as a service (SaaS) company announced the successful completion of its $80 million acquisition of Open Office.
Open Office is a leading government and justice case management SaaS provider with strong customer bases in Australia, the United Kingdom, and Canada.
According to the release, the acquisition of Open Office involves an upfront consideration of $54 million and an earn out consideration of up to an additional $26 million. This will be funded from the proceeds of a capital raising in November and scrip.
The completion comes after shareholders voted overwhelmingly in favour of the acquisition at an extraordinary general meeting on Friday of last week.
The acquisition is anticipated to be low double-digit EPS accretive in FY 2021 on a pro-forma basis before synergies and excluding integration costs.
It will be business as usual for Open Office following the acquisition. ReadyTech advised that its experienced management are aligned with its vision, strategy and culture, and will be retained to further strengthen the expanded team.
Open Office’s Managing Director, Phillip Simone, will become ReadyTech’s Chief Executive of Government and Justice.
ReadyTech’s Co‐Founder and CEO, Marc Washbourne, commented: “We’re delighted to welcome the Open Office team to ReadyTech, and are excited by the growth potential we see for our expanded SaaS businesses. With growing revenues, strong margins, profitable operations and positive cashflows, ReadyTech is in a unique position to support our customers, build exciting careers for our people, and deliver sustainable growth in shareholder value.”
Mr Simone added: “Open Office has a strong foothold into all levels of government in Australia. This is an exciting new chapter for us, as ReadyTech’s proven capability will assist in driving deeper connections with an industry that has strong barriers to entry, leveraging the robust, long‐term relationships we already have with our customers.”