Vertoz announces agreement to acquire Webimax LLC

Vertoz Limited, a global MadTech & CloudTech company, today announced that its wholly owned subsidiary, Vertoz Inc. (USA), has signed a definitive agreement to acquire  100% of Webimax LLC (USA), AI- driven Marketing Automation company headquartered in New Jersey, USA.

Under the terms of the agreement, Vertoz will acquire the business in two tranches:

• 80% stake upfront for USD 5.28 million (approx. ₹46.8 crore)
• This amount includes a contingent earn-out of up to USD 0.4M (approx. ₹3.52 crore) payable only upon achievement of agreed performance conditions

• Remaining 20% over the next three years, linked to clearly defined performance milestones

• The incumbent Management of Webimax shall continue with Vertoz

 The agreement is subject to customary closing conditions and is expected to be completed within 90 days. The transaction values Webimax at a total enterprise value of USD 6.6 million, representing an attractive EV/Sales multiple of 0.62x. Webimax generated revenues of approximately US $ 12 million in CY24, with an adjusted EBITDA of US $ 2.4 million and adjusted PAT of approximately US $ 1.8 million. 

Deal Financing Structure:

The acquisition is being funded to the extent of 75% of the purchase consideration through debt provided by India’s premier government financial institution, established to finance and promote the country’s international trade and support Indian businesses in their global expansion efforts. 25% of the acquisition shall be funded by Vertoz's own internal cash flow. 

This strategic acquisition funding by large financial institution is a strong vote of confidence in Vertoz’s financials, governance, global expansion strategy and its long-term vision to build a world-class, AI-first technology ecosystem.

Using debt instead of fresh equity shows unequivocally and in crystal clear light, to our stakeholders that Vertoz is extremely confident of its own internal financial free cash generation, as well as the strong organic cash flows of Webimax.  Webimax runs a very profitable, cash generative business, with debtor days of just 1 month. 

This acquisition is non-dilutive for Vertoz's existing shareholders, and shows the commitment of Vertoz management in delivering growth organically and inorganically, through internal cash and debt, without resorting to fresh new equity fund raises. 

Significant Impact of Webimax acquisition on Vertoz Ltd 's financial and strategic metrics

This transaction is immediately strongly accretive to Vertoz Ltd 's financials.  Given that Vertoz Ltd is acquiring 80% of Webimax (through Vertoz Inc, US), the acquisition after completing the closing conditions enumerated in the binding agreement may add approximately US$ 9.5 million (INR. 87 cr) revenues to Vertoz's existing approximately Rs. 300 cr of annualized revenues. 

More importantly, this acquisition may add ~ Rs. 17 cr of annualized PAT to Vertoz's profits, which are running at approximately Rs. 30 cr on an annualized basis. 

Positive Impact on Vertoz's Return on Equity

Using internal cash and debt is also going to result in increased shareholder value for Vertoz Ltd 's shareholders, because of an increasing Return on Equity/ Net Worth.  Vertoz's current RoE stands at around 16% and may increase post inclusion of the financials of Webimax, after the acquisition is completed.