Atturra's Strategic Acquisition of ComActivity Enhances ERP Offering
ATTURRA LIMITED (ATA) Share Update January 2025 Thursday 2nd
Atturra Completes Acquisition of ComActivity, Expanding ERP Solutions
Atturra Limited (ASX: ATA), a prominent technology services company, has successfully acquired ComActivity, a leading provider of manufacturing software solutions, to bolster its ERP capabilities in the manufacturing sector across Australia and New Zealand.
Instant Summary:
- Atturra acquires ComActivity via its subsidiary Galaxy42 Group Pty Ltd.
- Acquisition cost: $9M upfront, potential $5.5M earn-out based on performance.
- Strengthens Atturra's ERP solutions in manufacturing with Infor M3 expertise.
- Adds 61 new clients to Atturra's portfolio in the manufacturing sector.
- Completes three acquisition opportunities identified in November 2024.
Acquisition Details
Atturra Limited, through its subsidiary Galaxy42 Group Pty Ltd, has completed the acquisition of Brooks Investment Partners Pty Ltd, known as ComActivity. This strategic move is part of Atturra's broader plan to enhance its enterprise resource planning (ERP) solutions, particularly in the manufacturing industry in Australia and New Zealand.
The acquisition cost includes an upfront payment of $9 million in cash, with an additional earn-out consideration of up to $5.5 million, contingent on ComActivity meeting specific EBITDA performance targets for FY25 and FY26. The total purchase price is based on a multiple of 6.95 times the forecasted EBITDA, with integration costs estimated at $320,000.
Strategic Importance
ComActivity is renowned for its innovative manufacturing solutions based on Infor's M3 product suite. This acquisition not only enhances Atturra's existing capabilities in Infor Pathway but also introduces new opportunities for digital transformation in the manufacturing sector. The addition of 61 new clients from ComActivity provides Atturra with significant cross-selling opportunities for its other services and products.
Leadership Insights
Stephen Kowal, CEO of Atturra, emphasized the strategic alignment of this acquisition with Atturra's focus on technology and industry specialization. He highlighted the importance of the manufacturing sector to Atturra's portfolio, noting that the acquisition will enable the company to deliver advanced solutions powered by Infor's M3 product suite.
Jason Levick, Co-Founder of ComActivity, expressed enthusiasm about joining forces with Atturra, citing the shared vision and culture between the two companies. He believes this partnership will enhance their ability to deliver world-class solutions and create greater value for clients.
The acquisition of ComActivity is expected to significantly enhance Atturra's market position in the ERP solutions space within the manufacturing sector. By expanding its capabilities in Infor M3, Atturra can offer more comprehensive digital transformation solutions, potentially increasing its market share and client base in Australia and New Zealand.
The financial terms of the acquisition, including the performance-based earn-out, align with industry standards and reflect a strategic investment in future growth. This move is likely to positively influence Atturra's stock as investors recognize the potential for increased revenue and market presence.
Investor Reaction:
Analysts are likely to view this acquisition favorably due to the strategic fit and growth potential it offers Atturra. The addition of ComActivity's expertise and client base could lead to increased investor confidence in Atturra's long-term growth strategy.
Conclusion:
Atturra's acquisition of ComActivity marks a significant step in its strategic expansion within the manufacturing sector. Investors should consider the potential for enhanced market presence and revenue growth as a result of this acquisition. Staying informed on Atturra's integration progress and future developments will be crucial for making informed investment decisions.