Amidst the release of its strong Half-Year results highlighted by a 29% rise in EBITDA and a 2.5 cent fully franked dividend, accounting and compliance software company Class Limited (ASX: CL1) has announced the strategic acquisition of Reckon Docs and its 2,000 business customers.
The acquisition is the third by the Company since January 2020 following similar moves to secure NowInfinity and Smartcorp. Reckon Docs will be incorporated into the NowInfinity platform, a suite of solutions that allow businesses to simplify the management of their corporate entities and registers.
The acquisition continues Class’ goal of scaling its NowInfinity platform, absorbing the one-in-seven Australian companies already registered for Reckon Docs.
“Reckon Docs similarly to the Smartcorp acquisition is a key building block in scaling the NowInfinity platform and will help fast track Class to a market leadership position in the legal document and corporate compliance vertical,” said Class CEO, Andrew Russell.
“We also believe this will be beneficial for the Reckon Docs customers given they will now utilitse a newer technology platform and an expanded set of products.
“The business is forecast to generate $1m of revenue in FY21. We estimate the FY22 revenue to be $4m. The business will produce good cash flow going forward as its EBITDA margin is 60% in FY22.”
The transaction, valued at $13m adjusted for working capital, is expected to be completed by March 1 2021.
Prior to the recent acquisitions, Class built its identity on its cloud-based accounting, and investment reporting software, Class Portfolio and Cloud Super (for SMSFs). The latter of which enables accountants, administrators, financial advisors and auditors to manage all their SMSF administration and reporting needs from a single system.
The Reckon Docs acquisition was announced alongside Class’s Half-Year results where the Company reported H1 Revenue of $25.9 million, up 27% and EBITDA of $10.4m, up 29%.
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