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Invigor and Sprooki combine to provide unrivalled data driven digital solutions
6 minute read
Leading big data solutions company Invigor Group Limited (ASX:IVO) has signed a Share Purchase Agreement for the acquisition of Sprooki Pte Limited, a Singapore based group with comprehensive mobile and digital engagement capabilities.
IVO’s Chief Executive, Gary Cohen views the transaction as a game changing development that will position the company as the leading provider of data centric solutions to retailers as the sector continues to invest in transformation in order to grow profitably and remain competitive against new entrants such as Amazon.
On this note, Cohen said, “With the imminent arrival of Amazon, something that has been much publicised in Australia recently, we have witnessed a surge of interest in data-driven digital solutions that can address loyalty, pricing and shopper behaviour, and with the Sprooki acquisition, we will now have the necessary range of solutions to provide the antidote that these Enterprise and SME customers need to compete more effectively in an increasingly competitive retail environment”.
Financial benefits of developing an integrated scalable business
IVO will acquire Sprooki for a potential total consideration of $10 million through the issue of IVO shares to the Sprooki vendors.
Sprooki is forecast to add more than $2 million of revenue to Invigor in FY18, with an additional $3 million per annum expected to be generated in revenue synergies.
Invigor’s revenue model will also be strengthened and broadened through recurring performance and transaction fees based on customer usage and sales transactions via the platform.
The cost base of the combined business will be streamlined through consolidating shared service functions, back office cost savings and more efficient sales and marketing operations.
Global tech investment group comes on board as major shareholder
In a separate but related development IVO has secured a $1 million strategic investment from the highly regarded Allectus Capital Limited (formerly known as Vix Investments Limited, an established value investor that manages circa AUD$400 million of investments in listed and unlisted technology companies, principally in the Asia Pacific and United Kingdom.
Allectus is an active, long-term investor, supporting both the growth of individual investments and encouraging synergies between their investee businesses. It currently oversees 26 technology investments in the data analytics, fintech, consumer, identity and security, medical technology, human resources and transportation sectors.
In conjunction with IVO acquiring Sprooki in an all scrip transaction, Allectus has subscribed for 66,666,667 fully paid ordinary shares in IVO at $0.015 per share, equivalent to Monday’s closing price prior to the company entering a trading halt. Invigor will also issue to Allectus 26,666,667 IVO warrants at a strike price of $0.02, expiring in 2022.
Post placement, and following completion of the Sprooki transaction, Allectus will hold a circa 9% shareholding in Invigor.
Acquisition expands product offering and provides cross selling opportunities
The acquisition of Sprooki by IVO will deliver a comprehensive integrated suite of loyalty and data centric solutions across Europe, Australia and Asia. Sequentially, the placement will support the execution of growth initiatives utilising IVO’s intellectual property and proprietary technology to deliver meaningful value to clients globally.
In highlighting the benefits of having Allectus as a major shareholder, Cohen said, “Allectus’ investment is a significant vote of confidence in our transaction with Sprooki, as well as the technology platform and market leadership that a scaled-up Invigor will have after we complete the acquisition”.
There is also the issue of improved access to capital and on this note Cohen noted that IVO is now in a prime position to capitalise on the benefits that this transaction delivers, and Allectus’ funding and support will help us achieve this.
Given tendering and bidding activities are at record levels as brands and retailers look to deploy the best technologies and data analytics to attract, retain and grow customer numbers, IVO expects to report on more new business successes very shortly.
Allectus affirms its commitment to providing ongoing support
Growing businesses in fast emerging markets often requires a significant amount of capital expenditure. Consequently, comments made by Allectus’ Capital Portfolio Manager, Jason Cheong regarding an ongoing commitment to accelerating the group’s growth should be seen as a positive.
Cheong is an obvious believer in the business model and its place in servicing rapidly changing communications and marketing dynamics across many sectors. On this note, he said, “The combination of Invigor and Sprooki creates a leading retail and client-facing data analytics solution that is built on world-class technology as demonstrated by the number of major organisations already using the platform”.
Cheong went on to say that the group is meeting a very real and evolving need and changing the way in which retailers and brands define the customer experience. He sees a strong opportunity to leverage this technology in the Asia Pacific and beyond, building on his company’s experience and investments in consumer fintech and analytics.
Invigor emerges as market leader in loyalty and data centric solutions
Pointing to specific target markets and the combined group’s areas of dominance, Cohen said, “Sprooki is a transformational acquisition for Invigor and positions the combined entity as the unrivalled leader in loyalty and applied data solutions, delivering the very best predictive and prescriptive analytics to retailers, leading brands, shopping malls and venues in Australia, Europe and now Asia”.
While terms such as cross selling opportunities are often loosely bandied around when it comes to seemingly complementary acquisitions, it would seem from comments made by Sprooki’s co-founder, Claire Mula that there are visible and predictable benefits that can be realised.
Mula said, “This transaction is a natural progression from our partnership with Invigor, which has delivered projects such as the digitisation of Manly Wharf”.
Mula also highlighted the fact that Sprooki and IVO have complementary products, presence and leadership, and as a strongly aligned business there is the capacity to unlock opportunities from existing and new customers and markets.
Echoing Mula’s sentiments, Cohen said “Already we have identified multiple opportunities to market to our customers and this is expected to deliver almost immediate revenue-generating opportunities to the combined group”.