Guess which ASX tech stock is rocketing 16% on takeover news

A pretty premium is being offered to acquire this little-known company.

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While the Aussie tech sector withers today, one little-known ASX tech stock is seeing its share price slingshot into new territory.

Trudging into the afternoon, information technology shares are on course to be the third worst-performing sector, following behind healthcare and communication services. The lack of optimism follows a similarly feeble stoush among US-listed tech giants overnight.

Still, none of that can hold back the Ansarada Group Ltd (ASX: AND) share price today.

What's sending this ASX tech stock flying?

Few companies on the Australian boards can lay claim to their shares soaring 177% in the space of eight or so months. For investors in the virtual data room and document management software provider known as Ansarada, it's a remarkable reality.

Now fetching $2.43 per share, the small-cap company is trading 15.7% higher than yesterday after entering into a scheme implementation deed.

According to the release, Ansarada has entered a deal to be acquired by Minneapolis-based Datasite. Like Ansarada, Datasite provides a cloud-based platform tailored for use by dealmakers through mergers and acquisitions, restructuring, financing, initial public offerings (IPO), and more.

As per the agreement, the deal offers shareholders of the ASX tech stock $2.50 cash per share, reflecting an equity value of $236.3 million.

After 'extensive and meaningful engagement', Datasite sees value in combining its offerings with Ansarada's Deals and Procure products. Meanwhile, ESG (environment, social, and governance), GRC (governance, risk, and compliance), and Board products are not of interest to Datasite.

However, Ansarada CEO and co-founder Sam Riley has raised his hand to acquire these remaining 'carve-out assets' for $500,000 to allow the takeover to proceed.

All Ansarada directors, excluding Sam Riley due to a conflict of interest, have recommended shareholders to vote in favour of the scheme.

The co-founder, Sam Riley, commented on the significant deal, stating:

As a co-founder of Ansarada I am very excited by the prospect of Ansarada and Datasite joining forces. The proposed transaction represents the culmination of almost 18 years of work to improve the deal management process. At this stage of our lifecycle, we see tremendous value in combining the Ansarada Deals and Procure products with Datasite.

Datasite is doing some M&A of its own

For some background, Datasite was acquired by private equity firm CapVest in 2020. Since then, the company has proactively consolidated the deal room market by acquiring Toronto-based Firmex in 2021 and London-based MergerLinks last year.

It seems the rationale for gobbling up Ansarada is to expand across Australia and New Zealand — a geography that accounted for 58% of the ASX tech stock's revenue in the last quarter.

Ansarada posted a revenue of $14.5 million in the second quarter, increasing 10% year-on-year. The company's customers include 87 of the ASX 100, trumpeting a total of 13,691 customers across its products.

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 positions in and has recommended Ansarada Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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