On 22 January 2019, ServTech Global Holdings Limited (ASX: SVT) has announced that they have signed a binding agreement to acquire 100% of Officine 8K S.r.l. (to be renamed Vection). Officine 8K S.r.l. is a European based software development company.
ServTech Global Holdings is a software company engaged in developing technologies for those companies who want to focus on their core revenue-generating businesses. The technology also helps its clients to reduce overheads and to improve efficiency and scalability in their business.
Vection is also a software development company. The company provides practical and commercial software solutions to its clients. Currently, the company focuses on the software development market and the virtual and augmented reality market.
Vection has discovered a niche market which assists luxury brands and corporates by establishing a direct link between its client’s products and their target consumer. By doing this, they simply turn the buying decisions into a comprehensive experience. Vection provides a simulated virtual showroom for customers so that they can visualize and interact with products. With this offering and other related applications, the company has made a portfolio which consists of world-renowned clients.
The historical business model of Vection consists of collection of revenue from blue chip corporates for providing the software development solutions. It is anticipated that Vection will push the ServTech’s IT development and outsourced solutions growth strategy and make a significant contribution towards the Company’s fast-growing long-term contract revenue base. The company has recently launched a SaaS VR platform which will provide an additional revenue opportunity to them. In this platform customers get an intuitive platform to access VR functionalities for a variety of industries. SaaS VR platform is a subscription-based platform.
ServTech believes that this acquisition will push its overall growth strategy and helps in acquiring new clients by creating an opportunity in both the domestic and international market. With Vection’s advanced AR and VR development capabilities and to be introduced VR SaaS platform into the market, the company will create opportunities and introductions to large-scale businesses for distribution partnership development.
The Company also plans to leverage Vection’s existing Tier-1 clients’ portfolio so that they can generate a software development and sale opportunities for the group. By doing this group’s commercial opportunities will significantly increase.
Vection’s Financial Performance - The Company’s revenue for the year stood at $1,080,000 in FY18, (over the prior year which was $874,118). EBITDA for the year stood at $221,000 in FY18, (over the prior year which was $163,717). These results are supported by a growing VR (Virtual Reality) &AR (Augmented Reality) software development sector.
ServTech Stock performance: Post the announcement, the shares of ServTech global holdings Ltd closed the day’s session at A$0.016 (22 January 2019), up by 6.667%. The market capitalization of the company stands at circa $3.2 Million with 213.37 million outstanding shares. In the time span of the previous six and three months, the stock delivered the positive return of 15.38% and 36.36%, respectively. During the last one month, SVT delivered an impressive return of 66.67%.
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