The Infomedia Limited (ASX: IFM) share price went up by more than 4.5% after revealing an acquisition called Simplepart.
What’s the acquisition?
Simplepart is a US-based e-commerce platform. It designs, implements and manages consumer-facing e-commerce programs in the US and Canada for many of the world’s biggest automakers. The idea is to help them increase their sales of genuine automaker parts, accessories and service.
It gives the automaker and dealer customers a branded website, online store and digital marketing support to help its e-commerce programs. It also offers production systems that can catalogue complex automaker data and provides extensive reporting and insights that can catalogue complex automaker data and provides extensive reporting and insights to increase aftersales revenue.
Simplepart achieved revenue of around US$10 million in the 12 months to 31 March 2021. It’s expected to achieve low double digit growth in 2021 and 2022, before ‘synergies’. Simplepart is profitable and is generating positive cashflow.
The purchase price is an upfront payment of US$24.5 million, with an earn-out of up to US$20.5 million over three years. The upfront payment will be paid in cash.
Summary thoughts on the Infomedia share price
Management were pleased with this acquisition because it expands its core global offering, whilst enabling further penetration into the automaker parts ecosystem and transforming its presence in the Americas.
It seems like a smart move by Infomedia. This acquisition definitely adds to the prospects of the business.
