SPS Commerce (SPSC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands product portfolio with automated invoice deduction management and prevention capabilities, supporting suppliers in recovering lost revenue and improving supply chain processes.

• Complements existing solutions, targeting mid-size suppliers and expanding addressable market by over $750 million.

• Strengthens supplier relationships with retailers through process monitoring, education, and dispute resolution.

• Product synergies exist, leveraging existing network data to enhance dispute management.

Financial terms and conditions

• Purchase price was approximately $119 million in cash (net of cash acquired) and $87 million in stock.

• Transaction closed and will be reflected in Q3 2024 financials.

• Expected to add $3 million in Q3 2024 revenue, $8 million in FY 2024, and $25 million in FY 2025.

• Negative EBITDA impact of $750,000 in Q3 2024 and $1.5 million in FY 2024; breakeven expected in FY 2025.

• Amortization of intangibles to be finalized post-purchase accounting, with more details in Q3 2024 results.

Synergies and expected cost savings

• Customer profile overlap enables cross-selling and integration of solutions.

• Integration of the acquired SaaS solution is expected to reduce supply chain missteps and provide an industry-leading knowledgebase for suppliers.

• Data from existing network can be used to streamline dispute processes in the acquired platform.