The Bigtincan Holdings Ltd (ASX: BTH) share price has edged 1.5% higher today after the company announced the completion of its acquisition of Danish sales technology company, Agnitio. The acquisition will provide the Australian sales enablement platform with additional reach into the life sciences sector. Specifically to pharmaceuticals and medical devices companies. In addition, the acquisition also brings with it 3,000 users across 45 countries and an estimated sustainable annualised recurring revenue (ARR) of A$1.6 million.
The acquisition will be fully funded from existing cash reserves raised through the institutional placement and share purchase plan (SPP) completed in May and June 2020.
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Impact on the Bigtincan share price
Aside from growing the company's presence in Europe, the acquisition brings many strategic benefits to Bigtincan. Most beneficial over the long term, I believe, are Agnitio's proven track record and new technology for remote selling. In addition, the acquisition provides Bigtincan complimentary technology, as well as an executive team with significant depth of experience in life sciences.
Bigtincan saw its revenue increase by 56% in FY19 as it continues to grow into the global sales enablement market space. In addition, 95% of the company's total revenue is ARR, with a gross margin of 85%. With these tailwinds, I believe the acquisition clearly provides a positive financial impact. In addition, it delivers a focused, go-to-market strategy with a new and active customer base for Bigtincan. I feel this will likely benefit the company's long-term performance and, as such, the Bigtincan share price.
Management commentary
Regarding the acquisition, David Keane, Co-founder and CEO of Bigtincan said:
Life sciences organisations are seeking new ways to engage their customers remotely while remaining compliant with local and international laws. Agnitio has pioneered the market's most advanced virtual engagement solution specifically designed to support life sciences companies, and when added to Bigtincan's existing market leading Sales Enablement Automation platform, will help life sciences companies interact with their customers in a virtual 'Digital Sales Room' environment.
CEO of Agnitio, Lars Meincke, said:
Agnitio's core mission has been to empower sales teams, market access and medical affairs teams in today's digital world, and we believe that together with the global Bigtincan team, we can accelerate progression towards that vision.
Foolish takeaway
This acquisition is yet another landmark for Bigtincan's growing sales enablement platform. Specifically, it provides additional revenue channels that can continue to be built upon. Moreover, it sustains the company's gross margins and provides it with new technology for mobile and remote sales. The Bigtincan share price has a current market capitalisation of approximately $500 million with annual revenue of $31 million.
