Bulletproof (ASX:BPF) has reached an agreement to acquire the business assets of Cloud House Limited, which is a cloud services company based in New Zealand.
Cloud House is a provider of AWS (Amazon Web Services) Advanced Consulting services and provides consulting, billing and managed services to its customers. Bulletproof has agreed to pay NZ$1 million in cash, from its existing cash reserves. Additionally, the company has agreed to provide a further NZ$4.2 million in cash and shares, based on the performance targets achieved by 30 June 2017.
Cloud House earned approximately NZ$3.5 million annualised revenues, with around NZ$500k of current run-rate EBITDA. Bulletproof expects this deal to be strong earnings per share accretive as the initial payment is 2-times EBITDA and the total considerations is 3-times EBITDA growth. The targets linked to the additional payments are benchmarked over three consecutive half-year periods, and any target not being met by the end of June 2017 will have its corresponding payment forfeited. The owners of Cloud House will be transitioned to become a part of the Bulletproof management team.
This transaction, once completed, will be Bulletproof’s third major acquisition since 2014. The company initially acquired Panthacorp, an AWS consulting partner in December 2014 and Infoplex, a private cloud provider in October 2015.
Bulletproof believes that this deal will position the company as the largest AWS provider in the Australia and New Zealand region, and will add new customers from cross-Tasman region.
Bulletproof intends to provide corporate, financial and marketing resources to the Cloud House team to support the company in maintaining their expertise in the New Zealand region.
Bulletproof’s CEO, Anthony Woodward, commented on the acquisition: “We have been working with the outstanding team at Cloud House on a number of partnered opportunities for some time and we have always been impressed with the innovative, customer-focused capabilities of the Cloud House team. With great cultural alignment between the organisations demonstrated between the organisations already demonstrated, we believe the Cloud House team will feel at home within the wider Bulletproof Group and we’re excited to welcome them aboard.”
Bulletproof is a part of Wise-Owl’s growth portfolio and BPF has risen more than 57% since our recommendation in September 2015. BPF opened 1% higher at $0.495, as at 10:10 AM (AEDT).
Author: Simon Herrmann
Feb 01, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.