SPS Commerce Acquires Traverse Systems for $29.3 Million
SPS Commerce, a company listed on NASDAQ, has revealed its acquisition of the SaaS platform Traverse Systems in a deal valued at approximately $29.3 million. The acquisition involves a payment of $25 million in cash and $4.3 million in stock. It is anticipated that Traverse Systems will contribute around $600,000 in revenue for Q2. Although there will be an initial negative impact of approximately $200,000 on adjusted core profit in Q2, SPS Commerce foresees a break-even in adjusted core profit for FY24. Moreover, the company expects revenue increments of $2.9 million for FY24 and $5 million for FY25, alongside additional adjusted core profit of $1.5 million in FY25.
Key Takeaways
- SPS Commerce acquires SaaS platform Traverse Systems for approximately $29.3 million.
- A boost in Q2 revenue is expected, with an approximate $200K reduction in adjusted core profit.
- A projected increase of $2.9 million in revenue for FY24, reaching a breakeven point in adjusted core profit.
- A forecasted rise of $5 million in revenue for FY25, accompanied by a $1.5 million increase in adjusted core profit.
- An additional $600,000 in revenue for Q2, with progressive growth anticipated for FY24-25.
Analysis
The acquisition of Traverse Systems by SPS Commerce for around $29.3 million signifies a strategic step to bolster SPS's SaaS platform and enhance its revenue. In the short term, an increase of $600,000 in Q2 revenue is expected, while adjusted core profit is likely to decrease by approximately $200,000. Nevertheless, SPS Commerce foresees breaking even in adjusted core profit for FY24, marked by a $2.9 million revenue surge. Looking ahead to FY25, there is a projected $5 million rise in revenue and a $1.5 million increase in adjusted core profit. This acquisition is poised to have an impact on other SaaS providers and NASDAQ investors, potentially leading to heightened competition and fluctuations in share value. The deal also reflects an evolving pattern of tech consolidation aimed at strengthening capabilities and market presence.
Did You Know?
- SPS Commerce: A NASDAQ-listed company specializing in cloud-based supply chain management solutions, aiding businesses in optimizing operations, enhancing efficiency, and improving customer experiences.
- SaaS platform: Refers to Software as a Service, a cloud-computing model where applications are hosted by a third-party provider and offered to customers via the internet. Traverse Systems is a SaaS platform, providing web-based, on-demand software solutions.
- $29.3 million acquisition: Signifies SPS Commerce's purchase of Traverse Systems for an approximate total of $29.3 million, comprising $25 million in cash and $4.3 million in SPS Commerce stock.