The Harvest Technology (ASX:HTG) share price is on watch. Here's why

The Harvest Technology Group Ltd (ASX: HTG) share price is on watch after news the company intends to acquire SnapSupport broke this morning.

| More on:
Man drawing illustration of a big fish eating a little fish representing a takeover or acquisition.

Image source: Getty Images

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

Harvest Technology Group Ltd (ASX: HTG) shares are on watch today after the company released news of an acquisition this morning. The industrial communications group said the acquisition would mark the start of its expansion into the United States and international markets.

The Harvest Technology share price closed yesterday's session at 33 cents.

Let's take a closer look at the company's announcement. 

Acquisition underway 

Harvest Technology announced today it has signed a binding term sheet to acquire US-based SnapSupport Inc., a software as a service (SaaS) provider.  

The company also said it will accelerate its strategic swing towards a SaaS business model.

SnapSupport works to help remote field workers during equipment failures. It provides real-time visual and augmented-reality-enabled support to help fix issues quickly.

According to Harvest Technology's release, SnapSupport's business model fits well with its own. Harvest Technology provides connectivity solutions for the energy, resources and renewable sectors. 

The deal on the table is for the company to pay approximately $2.59 million worth of Harvest Technology shares, paid over two instalments, to acquire SnapSupport. Half will be paid on completion of the acquisition, the other half will be due 12 months later.

The acquisition deal hangs on some key terms – due diligence, a purchase agreement, and an employment agreement for a key employee.

Commentary from management

Harvest Technology's managing director Paul Guilfoyle commented on the potential acquisition, saying:

The acquisition of SnapSupport, who have commercially viable solutions that are already supporting largescale global customers with over 900 active users at any one time, will provide us with a fast and cost-effective pathway to speed-up the global rollout of our SaaS business model.

The SnapSupport mobile platform is proven, fit-for-purpose and can quickly and efficiently harness the advantages of our own Industrial Grade Connectivity capability.

Harvest Technology share price snapshot

The Harvest Technology share price has been performing well on the ASX lately.

Currently, it is up 6% year to date. It's also up by 175% over the last 12 months.

Harvest Technology has a market capitalisation of around $162 million, with approximately 493 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Communication Shares

Ordinary Australians waiting at the bus stop using their phones to trade ASX 200 shares today
Communication Shares

Telstra stock: Buy, hold, or sell?

What are analysts recommending investors do with this telco giant?

Read more »

A woman is excited as she reads the latest rumour on her phone.
Earnings Results

Guess which ASX 300 stock just reported a 21% jump in a critical measure

Growth is the word for this telco, and investors like what they see in the company's Q1 numbers.

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
Communication Shares

Under $4, do Telstra shares look an irresistible bargain?

Is this an opportunity calling too good to ignore?

Read more »

A couple makes silly chip moustache faces and take a selfie on their phone.
Broker Notes

Buy one, sell the other: Goldman Sachs rates 2 ASX 200 telco stocks

The top broker reveals its latest investment thesis on Telstra and a competing ASX 200 telco stock.

Read more »

a couple look dumbfounded with exaggerated looks of surpirse on their faces as te mman holds a phone in his hand.
Communication Shares

Could a special dividend be on the cards for Telstra shareholders?

Telstra could have an ace up its sleeve when it comes to its next dividend...

Read more »

A woman wearing a yellow shirt smiles as she checks her phone.
Communication Shares

It's a big day for Telstra shares, here's why

This telco giant is holding its AGM today. Here's what it has announced...

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Mergers & Acquisitions

TPG Telecom shares rise on $5.2b asset sale to Vocus

The telco is unlocking value by divesting assets. Here's what's happening.

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Communication Shares

Why 7% of this fundie's portfolio is invested in Telstra shares

Telstra is an important stock for this fund.

Read more »