Covata Ltd (ASX:CVT) is moving forward with its transformational acquisition of Germany-based content services, digital workplace and archiving software provider dataglobal GmbH.
The conditions precedent to the acquisition includes completion of due diligence, various approvals and an equity raising of around $20 million.
Covata has appointed Shaw and Partners Limited and Aitken Murray Capital Partners Pty Ltd as joint lead managers in relation to the proposed equity raising.
dataglobal GmbH is based in Heilbronn, Germany and has been in business for 20 years led by its founder Wolfgang Munz, who also directly or indirectly holds all company shares.
The dataglobal business has more than 550 customers in 40 countries with negligible customer turnover.
Its clients cover the automotive, aerospace, chemical, financial, energy, and manufacturing sectors and include Rhenus Logistics, NDR, Mars, Universal, T-Systems, the Federal Network Agency, and the Deutsche Börse.
Consideration €13 million in cash and shares
Covata will acquire 100% of dataglobal for €13 million with consideration settled 65% in cash and 35% in Covata shares.
The consideration shares are to be voluntarily escrowed for a period of up to 18 months from the issue date.
Covata’s board is of the view that this acquisition will deliver on the company’s strategy to expand its focus into data discovery, classification, protection and control (encryption) and archiving.
On completion of the acquisition, it is intended that Covata will be rebranded as dataglobal Limited.
It will operate at scale, with a robust range of products across Europe and with strong future growth prospects in the US and Asia.