SDS has entered into a conditional agreement to acquire Riaktr, a global supplier ofanalytic software solutions.
The purchase price on a cash and debt-free basis amounts to EUR 10.4 million. The acquisition is conditional on financing through issuing a secured bond loan and in connection with this, existing shareholder loans will be converted into shares, which requires a general meeting resolution.
Seamless Distribution Systems AB has entered into an agreement to acquire 100 percent of the shares in Real Impact Analytics S.A.(”Riaktr”).
Riaktr is a global supplier of proprietary software technology for Business Intelligence(“BI”) and Big Data Analytics (“BDA”), primarily in the telecom sector, headquartered in Brussels, Belgium.
Completion of the acquisition is expected to take place no later than May 3, 2021. Through the acquisition, SDS gains access to a company that offers; i) advanced complementary technology and a considerably expanded customer portfolio both in Africa and new markets, ii) has more than 50 percent recurring revenues from SaaS, and iii) brings critical technology and product enhancements to the SDS portfolio that enables an acceleration of the Group’s organic growth.
The sellers are Riaktr’s founders (management, employees and early investors) and three European funds. In connection with the acquisition, SDS has mandated Pareto Securities to investigate the possibility of issuing a secured bond loan with an expected maturity of three years and an initial volume of SEK 200 million.
In connection with, and in support of this transaction, existing shareholder loans of SEK 44.2 million will be converted into shares. This is a strong signal from existing major shareholders and senior executives of their support for this transaction. The management of SDS expects that the acquisition of Riaktr can lead to increased margins and that both EBITDA and EPS will improve for the Group in the short term.
Riaktr, headquartered in Brussels, Belgium, has its own R&D team, customer success management-and sales-organization in Belgium and South Africa. The product portfolio comprises innovative platforms for advanced analytics of Big Data and processes for sales optimization as well as network infrastructure optimization for telecom and network operators. The advanced proprietary platform, which is continuously improved by machine learning models, offers end-to-end solutions through concrete insight models and tangible action points for telecom operators that will increase competitiveness, efficiency and reduce costs.
Approximately 80 percent of the Riaktr’s revenue comes from telecom operators in Africa, making it a perfect fit with SDS’s existing customer base. Riaktr has preliminary unaudited sales of EUR 4.9 million, of which EUR 2.6 million is recurring SaaS revenue, and an EBITDA result of EUR 1.3 million.
The purchase price is equivalent of approximately 8x Riaktr’s preliminary unaudited EBITDA for 2020.”The acquisition of Riaktr is a transformational move in further developing SDS as a company. With Riaktr, SDS moves faster to a new strategic level in terms of the Group’s value chain, technology,
“SDS and Riaktr together have over to 35 years of experience in development, delivery and operation of large-scale systems with operational activities in over 60countries. With this acquisition, we further strengthen our presence in Africa and also reach additional new customers in Europe and South America,” says Tommy Eriksson, CEO of SDS.
“The acquisition fits perfectly into our growth strategy and that we continue to deliver on our planned profitability journey. In addition, Riaktr will allow us to offer next-generation solutions that enable our clients to enhance their competitive position. Following the implementation of SDS’ acquisition of Riaktr and the conversion of shareholder loans into newly issued shares, the Group can demonstrate a significantly stronger financial structure. We expect to be able to increase the company’s operations in additional markets in the medium term “, concludes Tommy Eriksson, CEO of SDS.
“Over the last few years, Riaktr has developed two products which are now mature and ready to scale across different markets. SDS is the perfect partner for Riaktr to access new geographies and accelerate our growth. The products of both companies are highly complementary, enabling a natural integration. Joining SDS will allow the Riaktr team to materialize our ambitious vision to provide every telecomoperator employee with tailored actionable insights”, says Sébastien Leempoel, CEO of Riaktr.
Riaktr was founded in 2009 with the mission of contributing to the digital transformation within telecom operators by offering customized data and analysis solutions (within BI and BDA).
Today, Riaktr has two proprietary analytics tools, Smart Sales & Distribution: a market-leading recommendation engine for sales and distribution teams and Smart Capex: a software solution for optimizing network investment planning for 5G and Fiber, among others. The acquisition strengthens SDS’s operational efficiency with Riaktr adding both complementary products and a cutting-edge development and technology team in Belgium focused on BI and BDA. With Riaktr joining the SDS Group, the geographical coverage and customer base is expanded, with several large, global and regional telecom operators such as Orange, Glo and Proximus, where the latter means that SDS receives customers located in Europe. The joint operations are expected to achieve significant synergies through higher efficiency in product development as well as economies of scale in sales, support and administrative units. The synergies, in terms of profitability and growth, are expected to emerge as early as 2021, but full effect is expected in 2022.
