The ReadyTech Holdings Ltd (ASX: RDY) share price is marching higher today, up almost 3% at the time of writing.
The All Ordinaries Index (ASX: XAO) is in the green too, up a more subdued 0.48%.
ReadyTech, an SaaS business, is focused on providing cloud-based software to the education, employment and government sectors.
Below we take a look at the acquisition announcement that looks to be driving investor interest in the ASX tech share.
Image source: Getty Images
What acquisition was announced?
The ReadyTech share price is gaining after it reported it has acquired Open Windows Software Pty Ltd.
Open Windows provides source-to-contract management modules to private and government customers, with most of its customers in local and state government.
According to the release, ReadyTech will pay $4.8 million upfront for the acquisition. That consists of just over $4 million in cash from its cash reserves, with the remaining $768,000 to be paid in ReadyTech shares.
ReadyTech will also pay up to $9.5 million in deferred consideration, which it reports "will be structured into milestone earnouts over 4.5 years". That will be paid in a combination of shares and cash.
The acquisition was completed yesterday. The company expects it to deliver recurring revenue of $1.5 million in FY22.
Commenting on the acquisition, ReadyTech CEO Marc Washbourne said:
Open Windows has a strong reputation for its modular SaaS based approach, unique workflow process design, modern user interface, and ability to handle the complex requirements of multi-party contract management and procurement supply chains.
Open Windows further fortifies ReadyTech's product-market fit and is suitable to cross-sell to a broad range of our customer base. In particular, Open Windows' focus on local government makes it a highly strategic and compelling fit for our Government & Justice segment.
ReadyTech share price snapshot
At $3.66, the ReadyTech share price is up an impressive 80% since this time last year. By comparison, the All Ords has gained just over 9% in the last 12 months.
Over the past month, ReadyTech shares have lost around 8%.
