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mCloud agrees Kanepi acquisition
Posted on Friday, 26 June 2020 14:35
Toronto-listed asset management technology provider mCloud has signed on the dotted line to purchase Kanepi, an Australia-headquartered provider of visualisation and analytics software.
Under the terms of the transaction, the buyer, via a newly-incorporated subsidiary, will pay AUD 5.00 million (USD 3.43 million) in cash and will also issue stock worth AUD 7.00 million as consideration.
The deal will also have an earn-out component of AUD 2.00 million, in two segments, which will be subject to Kanepi achieving revenue of AUD 10.00 million in the 12 months following closing or AUD 14.00 million in the 24 months after completion.
This gives the transaction a maximum possible valuation of AUD 14.00 million.
Under the agreement, 50.0 per cent of each earn-out payment will be in cash, with the balance in stock.
Completion remains subject to regulatory approvals, among other conditions.
mCloud believes the deal will supplement the group’s existing customer base while accelerating the growth of its AssetCare cloud platform into new asset classes.
Kanepi’s core technology will be integrated into AssetCare upon completion.
It also hopes to strengthen its presence in multiple process industries, such as upstream and midstream oil and gas, offshore floating production storage and offloading, liquefied natural gas and mining facilities, while simultaneously strengthening the group’s customer base.
According to Zephyr, the M&A database published by Bureau van Dijk, mCloud has been involved in two acquisitions since the beginning of this year; in January it bought Atlanta-headquartered industrial facility design and management software developer Construction Systems Associates for USD 3.50 million.
In February, the firm signed an expression of interest to pick up BuildingIQ, a Californian provider of online energy management technology for commercial building operators.
Under the terms of the transaction, it was to issue stock as consideration, valuing the takeover at around AUD 6.22 million.
Completion is subject to regulatory and shareholder approvals.
© Zephus Ltd