SPS Commerce Acquires Leadtec, $12.7M In Cash $2.2M In Stock

SPS Commerce, Inc.

, a leader in retail cloud services, announces the acquisition of Leadtec, a leading provider of cloud-based supply chain solutions in Australia and New Zealand with thousands of trading partners. The acquisition expands the SPS community in the region, building on its current network of more than 55,000 customers in more than 50 countries. As part of the industry's broadest retail business network, Leadtec's customers will take advantage of a powerful suite of cloud-based products that provide the integration and collaboration needed for the omnichannel retail era. "We are pleased to welcome Leadtec's employees and customers to the SPS Commerce community," states Archie Black, president and CEO of SPS Commerce. "SPS continues to grow its network to span the globe while enabling retailers and suppliers to collaboratively deliver a seamless experience for consumers in today's omnichannel retail marketplace. This acquisition strengthens our international presence, adds key retailer relationships to the network and broadens our team of retail and supply chain experts in Australia, New Zealand and beyond." Leadtec has the largest trading partner network in Australia featuring established relationships with thousands of companies including most of the region's largest retail companies such as 7-Eleven Stores, Coles Supermarkets Australia, David Jones, Myer and Woolworths Supermarket. Leadtec employees will continue to be based in Melbourne. "Leadtec is delighted to join forces with SPS Commerce to bring the world's largest retail business network to our customers, the Australian marketplace and across the region," said Angela Hariohoedojo, CEO of Leadtec. "As retailers and suppliers look to innovate around omnichannel trends, the SPS Commerce network offers a collaborative way to boost the efficiency and sales performance of their supply chains, reduce inventory costs and increase sales." Acquisition Details Under the terms of the acquisition agreement, SPS Commerce acquired all of Leadtec's assets, for approximately $12.7 million in cash and $2.2 million in stock for a total purchase price of approximately $14.9 million USD. Leadtec is headquartered in Melbourne Australia.The acquisition will be recorded in SPS Commerce's fourth quarter and 2014 year-end financial statements. For the fourth quarter of 2014, SPS Commerce anticipates the acquisition will add approximately $750,000 of revenue and expects Adjusted EBITDA to be negatively impacted by approximately $300,000. The company also anticipates in the fourth quarter 2014 a one-time expense of $400,000 as part of the transaction to be reflected as other expense in the financial statements, and a small increase in share count of approximately 40,000 shares. For fiscal 2015, the Company expects the acquisition will add approximately $4.5 million of revenue. The Company also anticipates the acquisition to negatively impact Adjusted EBITDA by approximately $500,000 in the first half of 2015; however, it will be accretive to Adjusted EBITDA in the fourth quarter of 2015. The Company will provide consolidated fourth quarter 2014 guidance and an update to the full year 2014 outlook in its third quarter financial results press release to be issued on October 23, 2014.