To enhance its data analytics and decision intelligence capabilities, COSOL has announced to acquire Toustone Pty Ltd, a renowned company specializing in data analytics, predictive analytics, and decision intelligence.
The acquisition is valued at up to $22.4 million.
Toustone has earned its reputation by developing proprietary data platforms that generate revenues through ARR software subscriptions, managed services contracts, and consulting.
The company holds a market-leading position in the transport industry, supporting multiple public transport operators in New South Wales and Victoria.
The acquisition deal is structured with an upfront payment of $12 million, comprising $8 million in cash and 4,531,038 COSOL shares valued at approximately $0.8828 per share.
An additional earnout payment of up to $6.5 million is contingent on achieving normalized EBITDA hurdles in CY25 and CY26, with a maximum payment of $3.75 million for CY25.
There is also an outperformance consideration of up to $3.9 million, dependent on EBITDA and EBITDA margin targets being met in CY26. COSOL retains the option to satisfy part of the earnout or outperformance consideration through issuing shares.
This acquisition is anticipated to be immediately high single-digit EPS accretive, with an expected FY25 contribution of $6.0 million in revenue at a 20% EBITDA margin before transaction costs. Completion of the transaction is expected in the first half of December 2024.
Funding for the upfront payment will come from expanded debt facilities, while the earnout consideration will be funded through a combination of operating cash flow and available debt capacity, with an option for partial payment in scrip at COSOL’s discretion.
The addition of Toustone’s capabilities in Industrial Mathematics, Optimization, and Machine Learning aligns with COSOL’s strategic vision of providing Asset Management as a Service. This acquisition is set to expand COSOL’s existing Asset Management IP ecosystem and enhance its SaaS platform, further growing its subscription-based annual recurring revenue base.