The LiveTiles Ltd (ASX: LVT) share price is trading flat on Wednesday following the announcement of a new acquisition.
At the time of writing the intelligent workplace provider's shares are changing hands at 32.5 cents.
What did LiveTiles announce?
This morning LiveTiles announced the acquisition of leading Switzerland-based intelligent intranet software provider, CYCL AG.
Through its Condense and MatchPoint products, CYCL has a leading market position in Switzerland and Germany. It also has a small but growing presence in the United States.
Management believes that the combination of joint capabilities between CYCL's MatchPoint product, LiveTiles, and Wizdom creates an enhanced Intelligent Workplace offering which will open up greater enterprise opportunities.
Furthermore, the low-touch, mobile-focused Condense product expands LiveTiles' addressable market through targeting organisations with large deskless workforces.
CYCL currently serves 156 high-quality customers and generates total revenue of $14.1 million. Its annualised recurring revenue (ARR) currently stands at $4.7 million.
Pleasingly, the CYCL business is EBITDA and cash flow positive, which management expects to accelerate LiveTiles' path to breakeven.
How much will it cost?
According to the release, LiveTiles has agreed an upfront purchase price of $19 million. This comprises $6.3 million in cash and $12.6 million in shares. This represents an EV / total revenue multiple of 1.3x, which management believes is attractive.
There is an additional earn-out consideration capped at $13.2 million. This comprises 25% cash and 75% shares.
LiveTiles Co-Founder and Chief Executive Officer, Karl Redenbach, said: "CYCL will accelerate the evolution of LiveTiles' Intelligent Workplace platform by delivering exciting new capabilities to current and future customers."
"This acquisition fast-tracks our product roadmap with an aligned technology architecture developed by a highly talented team. We are particularly excited about the opportunity to target organisations with large deskless workforces via CYCL's low-touch, mobile-friendly Condense product," he added.
