SPS Commerce (SPSC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands revenue recovery portfolio, enhancing support for Amazon sellers and building on prior SupplyPike acquisition.

• Carbon6's tools, including ChargeGuard and Seller Investigators, complement existing solutions for invoice deduction management.

• Strengthens leadership in supplier support for Amazon and Walmart, targeting both first-party and third-party Amazon suppliers.

• Addresses a large and growing market, with the invoice deduction market estimated at $750 million in the U.S., plus incremental opportunity from marketplace sellers.

• Cultural alignment and shared focus on innovation and customer value cited as key drivers.

Financial terms and conditions

• Total purchase price is approximately $210 million, with about 40% paid in stock.

• Expected to close in Q1 2025, subject to customary closing conditions and necessary regulatory approvals.

• Anticipated to add $7 million in revenue and break even in Adjusted EBITDA in Q1 2025; for FY2025, expected to add $40 million in revenue and $5.5 million in Adjusted EBITDA.

• Recurring revenue customer count to increase by about 6,500, with wallet share per customer decreasing by $1,000 due to smaller average customer size.

• Amortization of intangibles and purchase price adjustments to be detailed after purchase accounting is complete and with Q4 results in February 2025.

Synergies and expected cost savings

• Significant cross-sell opportunities expected, especially for Amazon-connected fulfillment customers.

• Combining network data with Carbon6's automation aims to reduce resolution time and prevent invalid deductions.

• Enhanced offerings expected to deliver unmatched solutions for both first-party and third-party Amazon sellers.

• Opportunity to rationalize technology stack between SupplyPike and Carbon6 for first-party sellers, aiming for best-in-class solutions.