Cirralto (ASX:CRO) share price lifts on Greenshoots acquisition

What does Cirralto’s latest acquisition means for the company, here’s a look…

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The Cirralto Ltd (ASX: CRO) share price has jumped straight out of the starting blocks on Tuesday morning. This follows the announcement of Cirralto entering an agreement to acquire eCommerce software company, Greenshoots Technology.

At the time of writing, the Cirralto share price is exchanging hands for 6.6 cents a share, up 3.13%. Despite the gain today, shares in the company have slumped 12.3% over the past month.

Let’s run through the details of the Greenshoots acquisition.

eCommerce offering bolstered with Greenshoots

Investors are bidding up the Cirralto share price in early trade after its latest announcement. Already, after only one hour of trade, more than twice the daily average volume has been traded.

According to the release, the company has executed a binding share sale agreement to acquire Greenshoots Technology. The acquiree is a software house that specialises in online retailing technology, providing a white-labelled e-Commerce platform to small and medium-sized businesses.

In the announcement, Cirralto explained that Greenshoots’ intellectual property completes its retail solutions capabilities. After integrating its offerings, the company can focus on eCommerce payments and consumer pay-later services. This is in a bid to capture a greater portion of the estimated $50 billion Australian eCommerce opportunity.

Furthermore, once integrated into Cirralto’s Spenda ecosystem, Greenshoots will be rebranded as Spenda eCommerce — offering Spenda payment services to its customers natively. If the Cirralto share price is anything to go by, investors appear optimistic for this development.

The transaction is on a 100% all-scrip basis, with Cirralto paying an upfront consideration of $1.5 million. Additionally, a further $3.6 million will be contingent on product delivery and revenue milestones being achieved.

Importantly, the acquisition will add a plethora of eCommerce functionality. This includes multi-channel sales and fulfilment management; integration services and workflows with freight providers and 3PLs; and access to global markets.

CEO commentary

Commenting on the acquisition, Cirralto CEO Mr Adrian Floate stated:

The acquisition of Greenshoots into the Cirralto product portfolio will enable us to immediately service businesses looking for an integrated, powerful eCommerce solution.

Unlike other eCommerce providers, the integration behind the Greenshoots solution means we can essentially ‘plugin and play’ the service with our existing Spenda solution. The benefit to customers is huge, not only are they able to sell online, take payment and transact smoothly, but the capabilities of Greenshoots IP mean we are able to push out our inside sales feature and delivery partnership channels at an accelerated pace.

Cirralto share price snapshot

The past 12 months have been a rollercoaster ride for shareholders. The Cirralto share price has been as low as 2.9 cents a share and as high as 21 cents a share.

Fortunately, shareholders have enjoyed a 78% gain over the past year. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) returned 25.4% during the same period.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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