COSOL Limited (ASX:COS) Expands Data Analytics with Toustone Acquisition
Acquisition Overview
COSOL Limited (ASX: COS) has announced the acquisition of Toustone Pty Ltd, a prominent data analytics group in Australia. This strategic acquisition aims to enhance COSOL’s enterprise asset analytics capabilities, particularly in the transport sector where Toustone is well-regarded. The total consideration for the acquisition can reach up to $22.44 million, linked to Toustone’s profit performance, making it immediately accretive to earnings and earnings per share.
Financial Details
The acquisition consideration includes an upfront payment of $12 million, comprising $8 million in cash and 4,531,038 COSOL shares valued at $4 million. The remaining amount consists of up to $6.5 million in earn-out fees and $3.9 million in outperformance payments, contingent upon achieving profit and margin thresholds in the upcoming years.
Executive Insights
COSOL Managing Director Scott McGowan emphasized the strategic importance of the acquisition. He stated, “Toustone has developed pre-configured proprietary platforms that give customers a single source of truth through synthesising data sets. This delivers outstanding insights and efficiency opportunities to customers.” He also expressed confidence that Toustone would enhance COSOL’s data management expertise and strengthen next-generation productivity solutions.
Toustone CEO Craig Lefoe echoed these sentiments, noting the alignment with COSOL’s mission. “Becoming part of the COSOL ecosystem opens up a new world of opportunity, in Australia and overseas,” said Mr Lefoe, highlighting the potential for growth and sharing of Toustone’s proprietary platforms with COSOL’s extensive client base.
Strategic Fit and Future Outlook
The addition of Toustone supports COSOL’s growth strategy by augmenting its intellectual property and software solutions in asset management. The acquisition is seen as a move to meet increasing customer demand for enhanced analytics capabilities in asset-intensive industries. COSOL confirmed that this acquisition will not alter its previously released earnings guidance for 2024.
Completion of the acquisition is anticipated in early December. The cash for the upfront consideration will be financed through COSOL’s expanded debt facility with Westpac, enabling ongoing growth and market leadership.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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