Ascential plc, the global business-to-business information and events company, has acquired Clavis Insight for an initial cash consideration of US$119m paid in December 2017 plus future earn-outs payable over three years.
Clavis operates in the eCommerce analytics market. Its proprietary technology enables consumer product companies to track and optimise the performance of their products across hundreds of retailer websites and mobile commerce sites globally. Customers include some of the world’s largest consumer product companies, such as P&G, Nestle, Unilever and L’Oreal.
Duncan Painter, Ascential CEO, commented: “Ascential enables its customers to improve their business performance. As a high growth business that offers synergies with our existing brands, Clavis fits well with our strategy, strengthening our eCommerce analytics offering for consumer product companies. Through combination with OCR’s offering, we will provide ever more comprehensive, accurate and actionable analytics and insight.”
Clavis will join Ascential’s Information Services division and is complementary to One Click Retail (“OCR”). In 2018 Ascential will integrate Clavis with OCR’s Amazon sales and share product that like Clavis, helps consumer product companies drive sales through eCommerce.
This combined product suite will constitute a globally leading eCommerce performance measurement platform, to enable both companies to provide broader capabilities to their existing customers. Clavis employs 170 people, including 100 in Dublin, with hub locations in the US, UK, France and China serving a global customer base.
Clavis is growing rapidly and, in the year to 31 December 2016, generated unaudited revenue of US$13m and an EBITDA loss of US$7m. Gross assets on 31 December 2016 were US$19m. Revenue is expected to grow to US$17m in the current financial year ended 2017 and Clavis is expected to break even in 2018. Clavis benefits from a high level of recurring revenue with 95% of total revenue being subscription-based.
The initial cash consideration is US$119m. Earn-out consideration is payable in cash based on the annualised recurring revenue of the business at the end of each of the next three years to 2020 and is expected to total between approximately US$25m and US$50m. A portion of the earn-out is subject to founders remaining in employment with the company. The total potential consideration, including initial consideration and earn-out payments, is capped at US$219m in the event that extremely stretching annualised recurring revenue levels are reached.
The acquisition, funded from cash reserves and existing borrowing facilities, is expected to be enhancing to Ascential’s earnings per share in the second full year of ownership.