Digital banking and payments company Novatti (ASX: NOV) has extended its business after agreeing to acquire software technology company Emersion for $1 million in cash and 16.725 million shares.
Emersion’s technology integrates diverse business applications such as subscription billing and payments into existing business platforms including Customer Relationship Management software.
The company’s technology effectively creates a “one-stop-shop” to drive business process while saving customer time and energy.
Novatti pointed out that Emersion has existing partnerships with international software platforms including Salesforce, Xero and ConnectWise.
Additionally, Emersion is cash flow positive and its FY 2019 revenue was more than $1.7 million – with 80% of this figure arising from recurring revenue.
Emersion’s earnings before interest tax depreciation and amortisation for the period was $300,000.
Despite the COVID-19 global pandemic, Novatti noted Emersion’s revenue for Q3 FY 2020 would exceed $500,000 as customers move to automation and cloud hosting of their billing and payments services.
“Despite challenges within the global economy, Novatti is steadfast in its plan to create long-term value for its shareholders by delivering on its growth-focused strategy,” Novatti managing director Peter Cook said.
“The acquisition of Emersion does this by strengthening Novatti’s existing capabilities to digitise payment and subscriber management services, while also expanding its recurring revenue and loyal customer base,” he added.
According to Novatti, the combination of both companies will generate synergies, expand its sales capacity and customer base.
Novatti also expects to strengthen its product capabilities including providing multiple payment functions.
The joint company anticipates it will remain resilient and continue generating revenue in a post COVID-19 world.
Novatti’s decision to acquire Emersion builds on its recent achievements including securing funding required to launch its new banking subsidiary, securing Visa Worldwide’s principal issuer licence, generating record revenue in the December quarter last year and gaining access to a new revenue stream via its partnership with Rent.com.au.