Ike chief executive Glenn Milnes. Photo / File
IkeGPS will raise up to $6.5 million at a small discount to buy US engineering software developer PLT for as much as US$3.4m ($5.4m) in cash and shares.
The US firm is profitable and will immediately add to Ike's earnings, but will also open up a chance of cross-selling the
IKE Analyze product to a wider customer base, it said in a statement. PLT is forecast to generate a profit of US$300,000 on revenue of US$800,000 in calendar 2019.
Ike will pay US$2.5m for the acquisition with a potential earn-out of up US$900,000 over a three year period, provided PLT's founder remains employed by Ike. The New Zealand firm will pay US$1.75m in cash upfront and issue US$750,000 of shares at 60 cents apiece. The earn-outs will also be a 70/30 split between cash and shares, with the issue price at 60 cents.
"This acquisition allows us to bring their technology in-house and opens up a number of additional pathways for growth, including through marketing to a broader customer base and an enhanced product offering," Ike chief executive Glenn Milnes said.
Ike will fund the acquisition selling shares at 60 cents apiece, a small discount to the 64 cents they closed at yesterday. Of that, $5m was raised overnight in a placement to investors, and another $1m be sold in a retail offer to existing shareholders, with the ability to accept $500,000 over over-subscriptions.
