TXT e-solutions has closed the definitive agreement to acquire 100% of Maple Lake, a fast-growing specialist in Fashion Retail Planning in Canada, USA, UK and Australia. The preliminary transaction, signed on 19th July 2012 has now been finalised, on time and on budget, following completion of all agreed conditions precedent.
The total price of 10.7 m€ is being paid in cash (9.5 m€) from available liquidity and in TXT stock (238,854 new TXT common shares, for a value of 1.2 m€). These shares will be subject to lock-up until 31.12.2013, and the price will be adjusted to reflect Maple Lake cash and working capital at the date of closing.
Maple Lake management – the sellers – may be entitled to an additional earn-out, up to a maximum of 4m CAD$ (3.2 m€) in cash, subject to revenue growth and profitability targets to be achieved in 2013 and 2014 through integration synergies of Maple Lake with TXT. The TXT Stockholders' Meeting is expected to take place before the end of 2012. The information document on the transaction will be made available to the public in advance, in accordance to Stock Market regulations.
Through this acquisition TXT obtains a direct presence in North America, where it already has many important customers, and in Australia. It also strengthens itself in Europe, thus becoming one of the leading, global supplier of Integrated Retail Planning solutions for the Fashion, Luxury and Retail markets. Maple Lake brings to the combined company approximately 50 new, large retail customers. After the acquisition, TXT will have more than 400 Fashion Retail customers, managing well over 100,000 stores and channels worldwide.
The acquisition merges TXT's and Maple Lake's superior technology and advanced retail expertise for Luxury, Fashion and Apparel, which are among today's most dynamic sectors of business. The target market for TXT products increases threefold, to over 1500 large retailers in North America, Europe and Australia. The resulting TXT product line is immediately enhanced; all customers of both companies are seamlessly supported, and are being offered richer and expanded functionalities of Integrated Retail Planning. All Maple Lake products will continue to be commercially available, maintained and rapidly integrated into the TXT platform.
TXT expects both revenues and operating margins to increase as a result of the transaction; it will start consolidating revenues and profits of Maple Lake in Q4 2012. Preliminary results for Maple Lake's fiscal year ended 30 June 2012 show revenues of 7.2 m€, EBITDA of 1.8 m€ (24% of revenues), net income of 1.2 m€ and no financial debt.
All personnel in Maple Lake will be retained, and Maple Lake management will have expanded long-term responsibilities in the merged company. More details can be found at www.txtgroup.com and www.maplelake.com, or by writing to firstname.lastname@example.org.
Alvise Braga Illa, TXT Group Chairman has commented: "Acquiring Maple Lake, which in the past 3 years has grown at a Compounded Annual Growth Rate in excess of 23%, immediately gives TXT a robust presence in North America and Australia. This acquisition, coupled with our own strong innovation ability, shows that TXT can scale up in geography, in technology and in business reach, even in these challenging times. After this acquisition, TXT remains net cash positive, with over 6m€ on hand. As Chairman and stockholder I am very pleased".