Here's why the Bigtincan (ASX:BTH) share price is dropping lower

Here's why the Bigtincan Holdings Ltd (ASX:BTH) share price is on the move on Wednesday…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Bigtincan Holdings Ltd (ASX: BTH) share price is on the move on Wednesday following the release of an announcement.

In early trade the sales enablement automation platform provider's shares are down 1.5% to $1.09.

Woman in mustard yellow blouse on laptop holds both hands out to either side with graphic illustration of question marks above them

Image source: Getty Images

What did Bigtincan announce?

This morning Bigtincan announced that it has entered into a binding agreement to acquire unified sales enablement platform provider, ClearSlide.

According to the release, the company has agreed a purchase price of US$16.25 million (A$22.6 million) in cash with ClearSlide's sole shareholder, Corel Inc.

This purchase price represents ~3.1x ClearSlide's estimated calendar year 2021 sustainable annualised recurring revenue (ARR) of ~US$5.2 million.

Why ClearSide?

ClearSlide is a leading sales engagement company whose offerings help full cycle sales and service teams that want to smooth the friction between their buyers and sellers.

Management notes that it brings significant new technology that complements Bigtincan's existing technology and supports Bigtincan's long-term strategy to lead in optimising buyer seller engagements. It also brings hundreds of customers to Bigtincan, including NBC Universal, The Economist, Aflac, web.com, and Comcast Spotlight.

It advised that these customers use ClearSlide's technology to connect with their customers using the built in remote connectivity platform and advanced engagement tools including sales campaign management. They also use its sophisticated analytics to better understand and connect with their customers.

Bigtincan's Co-Founder and CEO, David Keane, commented: "As part of meeting our mission and vision of empowering every customer facing worker to be successful in the new digital and remote economy adding ClearSlide sales engagement technology and the customer base brings new opportunities for Bigtincan to extend our market space and continue our leadership position."

Bigtincan also quoted Jim Lundy in its release. He is the founder and CEO of technology research firm, Aragon Research.

Mr Lundy said: "The Sales Enablement market continues to grow, and with market growth comes consolidation. The Bigtincan acquisition of ClearSlide brings together two market leaders in Sales Enablement that combined will make Bigtincan one of the largest providers in the market."

Institutional Placement.

In order to fund the deal, the company launched and successfully completed a $35 million institutional placement.

These funds were raised at an issue price of $1.05 per new share, which represents a 5.8% discount to its last close price.

Management advised that the placement was well supported by new and existing institutional investors.

FY 2021 guidance.

In addition to the acquisition, management revealed that the company remains on track to achieve its guidance in FY 2021.

It continues to forecast ARR of $49 million to $53 million, revenue of $41 million to $44 million, and stable retention. It also revealed that both organic growth and acquisition-related growth is on track.

This compares to Bigtincan's FY 2020 ARR of $35.8 million.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A businesswoman pulls her glasses down in shock to look at the bad news on her computer.
Share Fallers

Why Bank of Queensland, Brainchip, Pilbara Minerals, and Yancoal shares are sinking today

These ASX shares are being hammered on Tuesday.

Read more »

a middle-aged woman holds up two fingers with a wide mouthed smile on her face and wide open eyes.
Share Fallers

'Top quality': Expert picks 2 ASX 200 shares to buy at a nice discount

These stocks are down but not out. One portfolio manager is convinced they'll make you richer in the long run.

Read more »

a group of business people sit dejectedly around a table, each expressing desolation, sadness and disappointment by holding their head in their hands, casting their gazes down and looking very glum.
Share Fallers

Why Atlantic Lithium, Arafura, Brainchip, and Core Lithium shares are falling

These ASX shares are starting the week in the red.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Atlantic Lithium, CBA, Piedmont Lithium, and Pilbara Minerals shares are dropping

These ASX shares are ending the week deep in the red.

Read more »

Woman looking at her smartphone and analysing share price.
Share Fallers

Golden buying opportunity for 2 ASX shares slashed last month: Celeste

Here's a pair of businesses that are going pretty strong but whose stock prices are in a dip, ready now…

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why 29Metals, BHP, Helia, and Rio Tinto shares are dropping today

Here's why these ASX shares are weighing on the market's performance on Thursday.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Share Fallers

Why Nuix, Smartgroup, Ventia, and Woodside shares are dropping today

These ASX shares are having a tough time on the ASX boards on Wednesday.

Read more »

A woman looks distressed as she stares dramatically at her phone
Share Fallers

Why Brainchip, Lynas, Megaport, and Universal Store shares are dropping today

These ASX shares are having a tough time on Tuesday.

Read more »