New York-headquartered, ASX listed Updater Inc. (ASX: UPD) has announced a A$50 million raising and two significant acquisitions to further cement its position in the moving and storage industry.
The US technology company today revealed it will acquire moving industry software specialists IGC Software and Asset Controls Inc. (ACI) to allow it to offer a suite of products and services which it claims will transform the moving and storage industry.
At the same time Updater announced it had launched an institutional placement of approximately A$50M to eligible investors in Australia and selected other jurisdictions outside the United States to finance the acquisitions, fund the rollout of its new insurance division, and increase working capital to accelerate the sale of its Business Products into additional verticals. It has named Goldman Sachs Australia Pty Ltd as the Lead Manager of the Placement.
Under the binding purchase agreements, Updater Inc. will pay an aggregate of US$21 million for both entities, comprising of up to US$16.8M in cash and Updater common stock valued at US$4.2 million issued to certain key employees of the target companies. In addition, the key employees of the entities will be eligible to earn, in aggregate, up to US$5.5 million in cash if they achieve certain future milestones and conditions.
Upon close of the acquisition, IGC and ACI will operate as MoveHQ Inc. – a wholly-owned subsidiary of Updater.
IGC and ACI have developed the relocation industry’s most widely-used software products, with their customers including the majority of the largest van lines and hundreds of their local agents, as well as many of the premier independent moving companies. Collectively, their applications are used industry-wide by over 9,000 moving professionals. In the past five years, both companies have earned the industry’s top honor: American Moving & Storage Association (“AMSA”) Supplier of the Year.
Together, IGC and ACI generated ~US$7.2 million in revenue during the 12 months to 31 December 2016.