SYDNEY: Vection Technologies Ltd (ASX:VR1) has entered into an agreement to acquire all the shares in The Digital Box S.p.A. (TDB), a generative Artificial Intelligence (AI) company.

The Digital Box is a technology company that develops and markets 3D and AI platforms based on advanced natural  language processing technology.

This technology enables voice interaction with data, services, and information systems.

TDB helps customers bridge the physical and digital worlds through 3D digital humans, reducing costs and improving efficiencies.

TDB’s technology complements Vection’s ecosystem and aligns well with Vection’s focus on enterprise customers.

The acquisition’s initial enterprise value is ~$12m, with ~~$1.5m in newly issued shares payable at settlement. Up to ~55m Vection shares will be issued if TDB achieves sales and EBITDA objectives and balance sheet valuation targets one year post-acquisition.

In FY24, TDB reported $10 million in unaudited revenue and $1 million in unaudited EBITDA, indicating that the acquisition is expected to be value accretive for Vection’s shareholders.

Settlement is expected in Q2 FY25, subject to customary closing conditions and subject to former global COO of Apple Computer, Marco Landi, joining Vection’s board as non-executive chair.

Vection will integrate the TDB team and technology into its global business, making TDB’s technological capabilities available to existing and new customers.

This integration will create a wide range of cross-sell and growth opportunities across both companies’ customer bases, strengthening revenue and driving EBITDA growth.

Vection’s CEO & Managing Director Mr Biagi said, “The acquisition of TDB will strengthen the integration of AI and XR technologies and enhance customer experiences.

These innovations will provide a significant competitive advantage, allowing us to deliver unique solutions. This strategic investment in AI and XR will ensure we remain at the forefront of technological advancement and drive long-term growth.”

Under the terms of the Acquisition Agreement, upon satisfaction of the conditions precedent, including Vection shareholder approval and ASX approvals, the Company agrees to acquire and the shareholders of TDB agree to sell 100% of the issued share capital in TDB free from any encumbrances.

Vection has received firm commitments for a strongly supported equity funding round of $2 million via the placement of new fully paid ordinary shares to be issued at $0.01 per Share, representing a discount of 23.7% on the last 15-days Volume Weighted Average Price.