MELBOURNE, AUSTRALIA: ReadyTech Holdings Limited has acquired Avaxa, a specialist enterprise student management software business, for a total consideration of $2.2 million.
ReadyTech is a leading SaaS business focused on providing next generation cloud-based software to customers within the education, employment, government and justice sectors.
Acquisition of this enterprise student management software business will expand ReadyTech’s presence in the enterprise education market.
Avaxa is a specialist enterprise student management software company supporting many of Australia’s leading enterprises, TAFE and Higher Education institutions, with deep domain expertise.
For two key TAFE clients – Chisolm Institute and Melbourne Polytechnic – Avaxa manages the student journey from enquiry to graduation, including course lifecycles, timetables and resources, finance, compliance, and business operations reporting.
The acquisition involves an upfront consideration of $0.7 million and deferred consideration of up to $1.5 million, consistent with a recurring revenue multiple of 2.2x.
The consideration of $2.2 million is expected to be fully paid in the next 12 months and the payments will be funded from ReadyTech’s existing cash.
The acquisition is consistent with ReadyTech’s strategy of growing share of higher value enterprise clients in the education vertical.
Avaxa brings additional TAFE client relationships to ReadyTech’s existing presence in the Australian enterprise education market, following the key ReadyTech win in 2020 with Bendigo Kangan Institute.
ReadyTech Chief Executive Officer, Marc Washbourne, stated: “We are pleased to announce the strategic acquisition of Avaxa, which will enable ReadyTech to further grow its footprint and reputation in the enterprise education market.
“Avaxa have built deep domain and specialist expertise and exhibit strong TAFE and enterprise capability, as well as client engagement, through their existing relationship with six of Australia’s leading TAFE institutions that are supported by Avaxa’s Strata software. The acquisition is highly complementary to our education business and will allow us to leverage Avaxa’s relevant customer base and reputation in the TAFE sector to position ReadyTech as a key technology partner for enterprise education institutions.”
“In addition, the transaction delivers incremental recurring revenue, adding to ReadyTech’s existing strong subscription revenue streams.”
The acquisition of Avaxa is expected to deliver incremental recurring revenue in FY21 of approximately $670,000 being a part-year benefit from October 2021, with an EBITDA margin of 15% (before projected transaction and integration costs of approximately $250,000).