The ReadyTech Holdings Ltd (ASX: RDY) share price is marching higher today, up almost 3% at the time of writing.
The All Ordinaries Index (ASX: XAO) is in the green too, up a more subdued 0.48%.
ReadyTech, an SaaS business, is focused on providing cloud-based software to the education, employment and government sectors.
Below we take a look at the acquisition announcement that looks to be driving investor interest in the ASX tech share.
What acquisition was announced?
The ReadyTech share price is gaining after it reported it has acquired Open Windows Software Pty Ltd.
Open Windows provides source-to-contract management modules to private and government customers, with most of its customers in local and state government.
According to the release, ReadyTech will pay $4.8 million upfront for the acquisition. That consists of just over $4 million in cash from its cash reserves, with the remaining $768,000 to be paid in ReadyTech shares.
ReadyTech will also pay up to $9.5 million in deferred consideration, which it reports "will be structured into milestone earnouts over 4.5 years". That will be paid in a combination of shares and cash.
The acquisition was completed yesterday. The company expects it to deliver recurring revenue of $1.5 million in FY22.
Commenting on the acquisition, ReadyTech CEO Marc Washbourne said:
Open Windows has a strong reputation for its modular SaaS based approach, unique workflow process design, modern user interface, and ability to handle the complex requirements of multi-party contract management and procurement supply chains.
Open Windows further fortifies ReadyTech's product-market fit and is suitable to cross-sell to a broad range of our customer base. In particular, Open Windows' focus on local government makes it a highly strategic and compelling fit for our Government & Justice segment.
ReadyTech share price snapshot
At $3.66, the ReadyTech share price is up an impressive 80% since this time last year. By comparison, the All Ords has gained just over 9% in the last 12 months.
Over the past month, ReadyTech shares have lost around 8%.
