PERTH, AUSTRALIA: Peppermint Innovation Ltd (ASX: PIL), a fintech company that operates in the Philippines, has announced the acquisition of the ‘Application Modernisation’ business division from XPON Technologies Ltd (ASX:XPN), a software development company.

The deal involves the purchase of two of XPON’s subsidiaries, Xpon Digital Limited and Holoscribe Australia Pty Ltd, which will be renamed Peppermint Intelligence Limited and Peppermint Intelligence Pty Ltd, respectively.

The acquisition will add a team of 19 experts in artificial intelligence (AI) and customer experience (CX) to Peppermint’s business, as well as additional revenue from the existing contracts and projects of the acquired division. The AI and CX team will help Peppermint enhance its technology platform, optimise its development programs, and deliver a better user experience to its customers.

The transaction was completed for a nominal payment of one pound (£1), and will not affect the capital structure of Peppermint, as no securities were issued in consideration for the acquisition. The acquisition agreement included mutual competition restraint clauses as well as warranties and indemnities. The ongoing monthly operating costs of the acquired division are estimated to be A$160,000 per month.

Peppermint’s Managing Director and CEO Chris Kain said: “The acquisition of XPON’s AI & CX business division is a strategic move for Peppermint, aligning perfectly with our long-term objectives and  priorities.

“The acquisition is a massive shot in the arm for Peppermint and has the potential to really turbo charge our revenue stream growth in a short space of time.

“The AI & CX team has been instrumental in leading significant digital transformations and integrating advanced AI capabilities into various renowned businesses in the UK.

“It generated revenues of circa $5.5 million (GDP 3 million) in FY23 and by acquiring this seasoned team, Peppermint is effectively leapfrogging years of development in building similar capabilities, methodologies, frameworks and outputs from scratch to focus on the Company’s business going forward.

“We plan to integrate the AI & CX team into our existing technology operations during the next 6-12 months. This integration will not only enhance our technological delivery capabilities but also allow us to consider cost optimisation and specilisation across our technology teams, ensuring a more efficient overall structure.

“This will enable us to accelerate our AI transformation across loan origination, scoring, management and collections to deliver on our vision to become a leading automated lending business to the financially underserved.

“Additionally, the existing client base of the AI & CX business division provides an immediate offset to the costs associated with the team. It also offers Peppermint the opportunity to deploy any under-utilised resources within our core business for billable work.

“This approach ensures that the acquisition is not just about adding specialised skill sets via an established and proven team, but also accelerating Peppermint’s strategic development and enhancing our service offerings in a cost-effective and timely manner.”

XPON Technologies Founder & Group Managing Director, Matt Forman, said: “The talent and passion of the Application Modernisation team is very strong, and we are pleased to see the business is going to a good home at Peppermint. We wish them all the best under the new ownership.”

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