Junior tech play ServTech (ASX:SVT) has signed a binding agreement to acquire 100% of established, revenue generating business, Officine 8K S.r.l (to be renamed Vection).
Vection, which has attracted world renowned clients including: Lamborghini, Fendi Casa, Ferretti, Maserati, Volvo, Philip Morris and Bonfiglioli, is an innovative software development business with advanced Virtual Reality and Augmented Reality (V R & AR) development capabilities and a commercialised VR platform, ready for global scale.
According to ServTech, Vection is highly complementary to its own operations delivering increased scale, geographical expansion, development capabilities and growing revenues and EBITDA.
Vection has delivered impressive revenue and EBITDA growth, with revenues increasing six-fold organically from $157k in its inaugural FY15 year to ~$1.1M in FY18 with a ~20% EBITDA margin.
ServTech will acquire Vection through an all-scrip offer, subject to shareholder approval, which will see the company issue 292 million shares at 2 cents per share.
Under the agreement Vection CEO Mr Gianmarco Biagi will join the ServTech board as Managing director.
Commenting on the agreement Mr Biagi,
The union of the two companies is strategic in pursuing our international development strategy and is essential in ensuring the continued focus on high quality software products and services, while bolstering the combined group’s notoriety and reputation globally.
“Notwithstanding our joint effort on generic software solutions, this transaction will provide for increased VR & AR software development focus, which is one of the few booming sectors in the software development industry.
“ServTech’s corporate, management and financial infrastructure is ideal for Vection to expand its operations from its European foothold to Australia and the rest of the world.”
Following the acquisition, ServTech will look to accelerate its software development operations through its newly acquired European sales network.