Ascential buys Clavis for up to $219m

Business-to-business information company Ascential has bought e-commerce analytics group Clavis Insight for up to $219m.

Clavis, whose customers include the likes of P&G, Nestle, Unilever and L'Oreal, has proprietary technology which enables consumer product companies to track and optimise the performance of their products across hundreds of retailer websites and mobile commerce sites globally.

Ascential said it will join its Information Services division and is highly complementary to One Click Retail. Next year, the company will integrate Clavis with OCR's Amazon sales and share product, which, like Clavis, helps consumer product companies drive sales through e-commerce. Ascential said this combined product suite will constitute a globally leading e-commerce performance measurement platform, to enable both companies to provide broader capabilities to their existing customers.

Clavis employs 170 people, including 100 in Dublin, with hub locations in the US, UK, France and China serving a global customer base.

In the year to the end of December 2016, Clavis generated unaudited revenue of $13m and an earnings before interest, taxes, depreciation and amortisation loss of S$7m. Revenue is expected to grow to $17m in the current financial year ended 2017 and Clavis is expected to break even in 2018. Ascential said it benefits from a high level of recurring revenue with 95% of total revenue being subscription-based.

Ascential has paid an initial cash consideration of $119m and there is an earn-out consideration payable in cash based on the annualised recurring revenue of the business at the end of each of the next three years to 2020, which is expected to total between $25m and $50m.

A portion of the earn out is subject to founders remaining in employment with the company. The total potential consideration, including initial consideration and earn out payments, is capped at $219m in the event that extremely stretching annualised recurring revenue levels are reached.

The deal, which will be funded from cash reserves and existing borrowing facilities, is expected to be enhancing to Ascential's earnings per share in the second full year of ownership.