OTTAWA, Feb. 13, 2020 /CNW/ - Intouch Insight Ltd. ("Intouch" or the "Company") (TSXV: INX) (OTCQB: INXSF) today announces that on February 11th it has signed a non-binding Letter of Intent ("LOI") to purchase the assets of an arm's length North American customer experience measurement company (the "Vendor"), subject to TSX Venture Exchange approval (the "Acquisition"). For reasons of competition and privacy Intouch will not disclose the name of the Vendor until the completion of a definitive agreement. The targeted closing date is May 1, 2020. The Vendor has approximately USD $5.0M in revenues with a gross margin of 39%.
The purchase price is USD $2.0M in cash upon closing and additional contingency payments expected to be USD $1.5M paid in cash based on performance for two years post-closing. The transaction should be immediately accretive and Intouch intends to pay for the Acquisition from a combination of cash on hand, bank debt financing, and ongoing cash flows generated from the Vendor's ongoing business. Intouch will not be assuming any long-term debt, nor will it pay any finder's fees.
"This is the second such acquisition announced in 2020 as we continue to aggressively seek growth opportunities within our core business lines. This Acquisition brings with it additional geographic dispersion as well as a client base consisting of household names to whom we can target sales of our robust suite of SaaS products. The large investments we have made in technological superiority is beginning to be recognized in the industry and as this is a barrier for most other organizations Intouch has become an attractive acquirer," said Cameron Watt, President and CEO of Intouch.
"The organization we are acquiring not only brings with it significant revenues synergistic with our own but also brings a wealth of experience and knowledge in the form of its very capable management team and employee base. In fact, as part of the Acquisition we expect that the Vendor's founder will stay on as a member of the Intouch management team to ensure that we can leverage the Acquisition for additional growth," said Watt.
Certain statements included in this news release, including those relating to the Company's proposed transaction, future revenues and expansion, contain forward looking statements, which by their nature are necessarily subject to risks and uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements reflect the Company's current views with respect to expectations, estimates, future events, and are based on information currently available to the Company and on hypotheses which it considers to be reasonable; however, management warns the reader that hypotheses relative to future events which are beyond the control of management could prove to be false, given that they are subject to certain risks and uncertainties. The Company does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Intouch Insight Ltd.
For further information: Cathy Smith, Chief Financial Officer, [email protected], 613-270-7916