NZX-listed Plexure has entered into a binding, conditional agreement to buy Australian transaction platform Task for A$120 million ($123m) in a cash and scrip deal.
Plexure shares rose 9.3 per cent to 59c (for a $103m market cap) in early trading following the news.
Task chief executive Daniel Houden will become Plexure's new CEO if the deal goes through - replacing Craig Herbison, who abruptly resigned on August 3, sending its stock into a slide. Plexure said at the time that Herbison had resigned to spend more time with his family and that "a search for a new chief executive will commence immediately."
The deal for Plexure to acquire privately-held Task will see a A$30m in cash payment, plus A$78.5m in new Plexure shares issued to the owners of Task at 60c per share - an 11 per cent premium on Plexure's Friday closing price of 54c (for a market cap of $94.2m).
If the transaction goes through, Task shareholders will have a 42.9 per cent stake in Plexure.
An NZX filing says Task had pro-forma revenue of NZ$14.0m and a pro-forma ebitda of NZ$2.4m for the year ended June 30, 2021.
The majority of Task's revenue is recurring and a growing proportion of this revenue is derived from clients in North America, the filing said. On its website, Task - founded in 2000 by Kym and Jennifer Houden - says its customers include Starbucks, SkyCity and Bakers Delight.
The deal is subject to Plexure raising up to A$20m prior to completion, plus a shareholder vote in favour of the raise
Plexure said the deal would provide cross-selling benefits, and help to diversify its revenue.
A recent Forsyth Barr research note estimated that Plexure earns half its revenue from its largest customer, McDonald's.
The US fast-food chain also has a 9.4 per cent cornerstone shareholding in Auckland-based Plexure.
"McDonald's has indicated that it is supportive of the transaction. As previously announced to the market, McDonald's has a top-up right in respect of share issues in order to maintain up to a 9.9% holding," the filing says.
In May, Plexure revealed it had swung to a $7.9m loss in the 12 months to March 31, 2021, amid challenging Covid-induced conditions.
The mobile marketing and loyalty firm increased its revenue by 15 per cent to $29.1m in the period. Its reoccurring revenue from licence and support fees increased by 14 per cent to $18.3m.
The company did not provide earnings guidance for the year ahead at the time of its May report. In a filing today, it said combined group revenue would be between $45m to $47m for FY2022, assuming the deal closed on October 1.
Plexure struggled to hire and retain qualified staff to support its growth ambitions throughout the year. Its staff headcount ended the year at 150 - compared to 163 at the end of its half-year, and well below its target of 190 staff, chairman Phil Norman said.