Atturra Completes Strategic Acquisition of ComActivity

Key Highlights

• Atturra’s (ASX: ATA) acquisition of ComActivity strengthens its leadership in enterprise resource planning (ERP) for the manufacturing industry in ANZ.
• The $9M upfront acquisition with potential earn-out considerations up to $5.5M marks the completion of three key acquisitions identified in its 2024 capital raise plan.
• The acquisition adds 61 manufacturing clients and enhances Atturra’s (ASX: ATA) Infor M3 capabilities.

Introduction

Atturra Limited (ASX: ATA), a technology services leader in the ANZ region, has announced the acquisition of ComActivity, a Sydney-based provider of innovative manufacturing software solutions. This move cements Atturra’s (ASX: ATA) role as a market leader in ERP for manufacturing and further extends its capabilities in Infor’s M3 product suite.

The acquisition of ComActivity, completed through Atturra’s (ASX: ATA) subsidiary Galaxy42 Group Pty Ltd, is valued at $9M in upfront cash, with additional earn-out considerations of up to $5.5M, contingent on performance hurdles for FY25 and FY26. The purchase price reflects a valuation multiple of 6.95x forecast EBITDA.

The deal is part of Atturra’s (ASX: ATA) three-pronged acquisition strategy outlined in its November 2024 capital raising presentation. Integration costs are estimated at $320,000, demonstrating a well-planned approach to seamlessly incorporating ComActivity’s operations.

Expanding ERP Leadership in Manufacturing

ComActivity specializes in innovative solutions built on Infor’s M3 product suite, delivering end-to-end supply chain technology services. The acquisition adds 61 manufacturing clients to Atturra’s (ASX: ATA) portfolio, creating cross-selling opportunities for its existing IT services.

Enhancing Capabilities with Infor M3

ComActivity’s deep expertise in Infor M3 complements Atturra’s (ASX: ATA) existing capabilities in Infor Pathway, broadening its service offering in manufacturing ERP solutions. The move aligns with global manufacturing trends emphasizing digital transformation, efficient supply chain management, and scalable technology solutions.

Why This Acquisition Matters

Some reasons why this matters include:

Strengthened Market Leadership

Atturra (ASX: ATA) solidifies its leadership in ERP solutions for manufacturing, reinforcing its position as a go-to provider for digital transformation services in ANZ.

Increased Client Base

The acquisition brings 61 new manufacturing clients, providing opportunities to cross-sell Atturra’s (ASX: ATA) broader suite of IT solutions.

Growth in Digital Transformation

ComActivity’s proven track record in Infor CloudSuite solutions positions Atturra (ASX: ATA) to better serve industries like manufacturing, food and beverage, and equipment management.

Financial and Strategic Implications

Some implications to look out for are:

Capital Allocation

The acquisition is funded through proceeds from Atturra’s (ASX: ATA) recent capital raise, highlighting efficient financial management to support growth.

Revenue Opportunities

The integration of ComActivity is expected to drive revenue growth through cross-selling and an expanded client portfolio. With manufacturing firms actively pursuing ERP upgrades, Atturra (ASX: ATA) stands to benefit from increased demand for scalable and customizable solutions.

About ComActivity: A Trusted Partner in Supply Chain Solutions

Founded in 2005, ComActivity has built a strong reputation as a provider of end-to-end supply chain technology solutions in ANZ. Its team of 40+ experienced consultants specializes in delivering tailored solutions for local and global clients, with a focus on manufacturing, food and beverage, and equipment-intensive sectors.

Digital Transformation in Manufacturing

The manufacturing industry is rapidly adopting ERP systems to enhance productivity and resilience. ComActivity’s expertise positions Atturra (ASX: ATA) to tap into this trend.

Supply Chain Modernization

Efficient supply chains are critical for businesses, especially in post-pandemic markets. The acquisition boosts Atturra’s (ASX: ATA) capabilities in this area, making it a preferred partner for manufacturers.

Focus on ANZ Manufacturing

With manufacturing contributing significantly to the ANZ economy, Atturra’s (ASX: ATA) enhanced ERP solutions align with industry needs for modernization and innovation.

Integration Strategy and Challenges

Atturra (ASX: ATA) has earmarked $320,000 for integration costs, ensuring a smooth transition for ComActivity’s operations, employees, and clients. While challenges such as aligning organizational cultures and managing client expectations may arise, Atturra’s (ASX: ATA) structured approach and expertise mitigate these risks effectively.

Broader Implications for Atturra’s Growth

This acquisition is more than just a financial milestone; it represents a strategic leap forward. By integrating ComActivity’s capabilities, Atturra (ASX: ATA) enhances its ability to serve diverse industries, including local government, utilities, and defense, alongside manufacturing.

Atturra’s (ASX: ATA) partnerships with global technology leaders like Microsoft, Cisco, and Infor further strengthen its ecosystem, enabling seamless delivery of comprehensive solutions.

What’s Next?

Atturra’s (ASX: ATA) acquisition of ComActivity is a testament to its strategic foresight and commitment to growth. By expanding its ERP capabilities and adding 61 new clients, the company not only reinforces its leadership in the manufacturing sector but also sets the stage for sustained growth in digital transformation.

For investors and stakeholders, this acquisition underscores Atturra’s (ASX: ATA) vision of becoming a leading technology solutions provider in ANZ and beyond.