Prophecy International Holdings Limited (ASX: PRO) have announced the 100% acquisition of eMite Pty Ltd. The sale and purchase agreement has been completed and the transaction is effective as of July 1st 2015.
Prophecy was established in 1980 with the head office and software development centre based in Adelaide, Australia. The company designs, develops and markets software through its business partner channel to companies worldwide. The company has established a large international presence with its innovative software deployed in more than 20 countries including Australia, Asia, Europe and the United Sates.
eMite specialises in Business Information and its principle asset is its Service Intelligence Platform which combines analytics, correlations, capacity, performance, availability and SLA management into a single solution.
The transaction will consist of a $4million upfront cash payment together with 6.3million Prophecy shares and an earn-out incentive based on the performance of the business in the 2016 financial year. Prophecy has completed a placement of 2.3million shares to new institutional investors in order to raise $2.5million to fund the transaction. Upon completion of the placement, Prophecy will have 64million shares on issue.
“The acquisition of eMite provides Prophecy with the coherent bolt-on opportunity that will immediately deepen our data management and analytic domain presence. There are exciting revenue and marketing synergies by leveraging Snare’s existing relationships with enterprise and mid-market client to cross sell the eMite solution. The combined revenue and profit projections for 2016 push our growth along at a rapid rate to further capitalise on excellent growth achieved this year.”
The company’s SNARE sales have grown more than 170 percent in FY2015 and combined with the capabilities of eMite, the company expects a revenue of $20million for FY2016 with a $8.2million profit before tax, almost doubling that of the previous year.
Prophecy’s share price has seen significant growth in the last 6 months after the company reported very promising half year results. Since the start of January the company’s share price has grown over 230 percent to a current price of $1.34. This morning’s announcement has been received well as the share price continues to rise.
Author: Ben Visser
Jul 10, 2015
Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.