Infomedia Completes Acquisition of 100 per cent of Simplepart
- Infomedia will acquire Simplepart for $24.5 million.
- The company will acquire 100 per cent of the company.
- Simplepart is an E-commerce platform provider based in the US.
Infomedia (ASX: IFM) has today confirmed the completion of its 100 per cent acquisition of Simplepart to the ASX. The acquisition has been a target for Infomedia for some time and reflects an appropriate expansion of the company into North America. Adjacent to the announcement, the company also provided a positive update and outlook for the remainder of the calendar year 2021. Infomedia has seen, "as anticipated," strong organic growth for FY21 so far.
Infomedia is a global provider of automotive parts and service software aiming to increase the operational capacity and efficiency of the company's its serves. They provide these services through Software as a Service (SaaS) parts platforms such as Microcat® LIVE™ and Auto PartsBridge and services platforms Superservice® Menus™ and Superservice Triage™.
The company's most recent acquisition of Simple part expands Infomedia's network of E-commerce platforms and provides them with the capacity to improve and expand their existing platforms. Infomedia described the acquisition as a "strategic extension of Infomedia's core global offering," improving and expanding their "business-to-business and business-to-consumer parts service and data, insights solutions."
For the full financial year, Infomedia has experienced strong and organic monthly recurring revenues, though the acquisition is not expected to contribute to the financial results released by Infomedia for the full financial year 2021. Arguably the recent acquisition will, however, provide significant momentum for the company moving into FY2022.
Investors have eagerly welcomed both the completed acquisition and the strong business conditions, with shares in the company surging almost 20 per cent intra-day. This is a significant improvement on the company's recent outlook for the company, with shares sliding 31 per cent to date prior to today's announcement. At 1:00 pm, Infomedia shares are trading 12.5 per cent higher at $1.53 per share, still above the middle donchian channel with the MACD and Stochastic poised positive.
UBS and Credit Suisse have among the most positive outlooks for the electronic services company having Buy and Outperform rating place recently in April. These price targets reflect 43.8 and 56.9 per cent upside from current levels.
In particular, UBS believes the company's most recent acquisition complements the company's existing platforms and systems and will enable a significant geographic expansion. Additionally, Credit Suisse believes that the acquisition of Simplepart will become earnings per share accretive by FY2022. Infomedia will provide its full audited results for FY2021 on the 24th of August this year.