Why Infomedia (ASX:IFM) acquired SimplePart

Summary

  • Infomedia Ltd announced that it had acquired US-based e-commerce platform SimplePart.
  • The acquisition of SimplePart came for an upfront consideration of US$S24.5 million (A$31.6 million) along with an earn-out of up to US$20.5 million over three years.
  • The upfront consideration would be funded from Infomedia’s existing cash reserves.

Infomedia Ltd (ASX:IFM) on Tuesday announced that it had acquired US-based e-commerce platform SimplePart. The software provider in parts, service and data insights solutions to the global automotive industry said that the acquisition of SimplePart came for an upfront consideration of US$S24.5 million (A$31.6 million) along with an earn-out of up to US$20.5 million over three years.

SimplePart provides online parts, accessories and service e-commerce solutions that enable automakers and dealers to sell directly to consumers. SimplePart made US$10 million in revenue in the 12 months to 31 March 2021 and was expected to achieve low double digit growth rates in calendar years 2021 and 2022 before synergies.

Source: ©Fazon1  | Megapixl.com

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The upfront consideration would be funded from Infomedia’s existing cash reserves. The earn-out would be paid in cash subject to Infomedia having a right to settle for up to 20% of each earn-out payment in Infomedia shares.

Company statement

Commenting on the acquisition, Infomedia chief executive Jonathan Rubinsztein said that it was an exciting acquisition as auto ecommerce was a strategic extension of company’s core global offering. SimplePart would enable Infomedia to further penetrate the automaker parts ecosystem and transform its presence in America, Rubinsztein also said.

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SimplePart founder, Cole Getzler, together with its President, Michael Oki, would continue to run the business from its base in Atlanta, Georgia. The transaction was subject to satisfying customary closing conditions. It is anticipated that these conditions would be met on or before 30 June 2021.

Source: ©Embe2006  | Megapixl.com

Stock performance

On Monday, 3 April 2021, the stock of Infomedia closed unchanged at A$1.58. Infomedia competes with Afterpay (ASX:APT), WiseTech Global Ltd (ASX:WTC), Zip Co Ltd (ASX:Z1P) and Xero (ASX:XRO), among major stocks in the tech sector.

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