MSL Solutions Ltd (ASX:MSL) shares surged 27% to 9.5 cents today after acquiring point-of-sale (POS) software company SwiftPOS for $4.25 million in cash and $500,000 in shares.
Based in Brisbane, SwiftPOS is Australia’s leading hospitality and retail point-of-sale systems solution, with a footprint spanning 4,000 venues across 26 countries.
The acquisition positions MSL to significantly grow its recurring revenue, adding more than $2.3 million per year based on current trading levels.
“Excited about the opportunities”
MSL chief executive officer Pat Howard said MSL’s acquisition of SwiftPOS made sense given the synergies between the two businesses.
He said: “As the largest reseller of SwiftPOS, MSL is very familiar with the product’s technical and commercial merits.
“We’re excited about the opportunities that this acquisition will open to us, particularly in international markets, where SwiftPOS has established a competitive presence in 26 countries.”
Acquisition to significantly grow recurring revenue
The acquisition positions MSL to significantly grow its recurring revenue, adding more than $2.3 million per year based on current trading levels.
Integration synergies and significant cross-sell opportunities are anticipated to be $100,000 over the first full year and it will add over $2.3 million or an increase of 12% to MSL’s annual recurring revenue, with maintainable recurring revenue a significant value driver for the company.
The acquisition grows MSL’s customer base by more than 300% from 1,220 venues to more than 5,000 and aligns with the company’s strategy to own all the IP for its end-to-end guest engagement solutions.