RPMGlobal share price up following acquisition of mining software company

The RPMGlobal share price has risen following the acquisition of Canadian mining software company, Revolution Mining Software.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The RPMGlobal Holdings Ltd (ASX: RUL) share price closed trading yesterday up by 3.09% to $1.00, following the announcement of an acquisition by the company.

What was the acquisition?

According to the announcement, RPMGlobal will acquire 100% of Revolution Mining Software, a private company based in Canada. Revolution Mining Software has more than 6 years experience developing and selling its flagship 'Schedule Optimisation Tool', which is a mine scheduling optimisation software solution for tier one miners.  

The tool emerged following research from the non-profit organisation Mining Innovation, Rehabilitation and Applied Research Corporation (MIRARCO). The organisation is based at Laurentian University in Canada and has a reputation for solving complicated mining industry problems. 

According to the announcement, the software is the only strategic financial optimisation tool for underground mines that enables planners to improve productivity and profitability by optimising the net present value (NPV) of the mine schedule.

Commenting on the acquisition, RPMGlobal CEO and managing director Richard Mathews stated:

We are very pleased to have concluded negotiations to to acquire Revolution Mining Software and are really looking forward to welcoming Lorrie and the rest of the Revolution team into the RPM family. We will invest in their industry leading scheduling optimisation tools to deliver innovative solutions that add real value to our customers.

RPM was born from the understanding that mine planning needs to be built on sounds economics and the Revolution Mining product strategy is completely aligned with that core value.

Following the transaction, all of Revolution Mining Software's employees will move into the RPMGlobal business.

The transaction will be paid for with RPMGlobal's existing cash reserves and consists of an upfront payment of CAD$500,000, along with a 2 year earn-out agreement. The acquisition is set to be finalised on 31 July 2020.

About the RPMGlobal share price

RPMGlobal has been listed on the ASX since 2008. It is a provider of mining software solutions, advisory services and professional development to the mining industry. RPMGlobal has worked with mining companies in 125 different countries over the last 50 years. 

Last week, RPMGlobal announced that it expects to finish the 2020 financial year with a total contracted value of software subscriptions of $34.5 million. The company also announced that its recurring revenue from software subscriptions was $12.7 million per year.

In the first half of the 2020 financial year, RPMGlobal had revenue of $41.1 million, a 5% decline on the same period in 2019.

The RPMGlobal share price is up 92.3% from its 52 week low of $0.52. It has returned 17.65% since the beginning of the year. The RPMGlobal share price is up 66.67% since this time last year.

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of RungePincockMinarco Limited. The Motley Fool Australia has recommended RungePincockMinarco Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Share Market News

5 things to watch on the ASX 200 on Friday

A good finish to the week is expected for Aussie investors.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two racing cars battle to take first place on a formula one track with one tailing the the leader and looking to overtake the car.
Opinions

Down 21% in 2024. This ASX 300 stock looks like a money-making monster

Profits are expected to plunge, but the future could still be bright.

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
52-Week Lows

Down 68% from highs, this ASX 200 stock just hit a 4-year low. Time to pounce?

Is this beaten down stock a buy? Let's see what one leading broker is saying.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Share Market News

Insider buying alert: 3 ASX 200 shares directors are snapping up right now

Directors in some of Australia's blue-chip businesses aren't shying away from the market.

Read more »