Harvest Technology Group Ltd (ASX: HTG) shares are on watch today after the company released news of an acquisition this morning. The industrial communications group said the acquisition would mark the start of its expansion into the United States and international markets.
The Harvest Technology share price closed yesterday's session at 33 cents.
Let's take a closer look at the company's announcement.
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Acquisition underway
Harvest Technology announced today it has signed a binding term sheet to acquire US-based SnapSupport Inc., a software as a service (SaaS) provider.
The company also said it will accelerate its strategic swing towards a SaaS business model.
SnapSupport works to help remote field workers during equipment failures. It provides real-time visual and augmented-reality-enabled support to help fix issues quickly.
According to Harvest Technology's release, SnapSupport's business model fits well with its own. Harvest Technology provides connectivity solutions for the energy, resources and renewable sectors.
The deal on the table is for the company to pay approximately $2.59 million worth of Harvest Technology shares, paid over two instalments, to acquire SnapSupport. Half will be paid on completion of the acquisition, the other half will be due 12 months later.
The acquisition deal hangs on some key terms – due diligence, a purchase agreement, and an employment agreement for a key employee.
Commentary from management
Harvest Technology's managing director Paul Guilfoyle commented on the potential acquisition, saying:
The acquisition of SnapSupport, who have commercially viable solutions that are already supporting largescale global customers with over 900 active users at any one time, will provide us with a fast and cost-effective pathway to speed-up the global rollout of our SaaS business model.
The SnapSupport mobile platform is proven, fit-for-purpose and can quickly and efficiently harness the advantages of our own Industrial Grade Connectivity capability.
Harvest Technology share price snapshot
The Harvest Technology share price has been performing well on the ASX lately.
Currently, it is up 6% year to date. It's also up by 175% over the last 12 months.
Harvest Technology has a market capitalisation of around $162 million, with approximately 493 million shares outstanding.
