DALLAS - Thryv Holdings, Inc. (NASDAQ: THRY), a prominent SaaS provider for small and medium-sized businesses, has announced a definitive agreement to purchase Infusion Software, Inc., commonly known as Keap, a company specializing in customer relationship management and marketing automation. This strategic move is set to bolster Thryv's position in the SMB SaaS market.
The transaction, valued at $80 million and expected to close in the fourth quarter of 2024, will be funded through equity financing and borrowings under Thryv's existing credit facility. Keap, which reported approximately $85 million in revenue in the trailing twelve months through June 30, 2024, operates on a subscription-based model and has a significant footprint in North America, Europe, and Australia.
Thryv's CEO, Joe Walsh, stated that the acquisition of Keap represents a transformative moment for the company, enhancing its SaaS business, recurring revenue, and profitability profile. He emphasized that Keap's sales and marketing automation solutions would integrate seamlessly with Thryv's existing offerings. Clate Mask, CEO of Keap, echoed these sentiments, highlighting the alignment of both companies' visions and the enhanced value for customers.
The acquisition is anticipated to create a market leader with over 100,000 SaaS subscriptions, diversify market approaches, expand geographic reach, and enhance Thryv's software solutions with Keap's AI-powered marketing tools. The integration is expected to present significant synergies and accelerate top-line growth.
RBC Capital Markets, LLC and Akin Gump provided financial and legal advisory services to Thryv for the acquisition, while AXOM Partners LLC and Snell & Wilmer LLP advised Keap.
Thryv, known for its comprehensive business software platform, helps small businesses manage operations and customer engagement. The platform is used by roughly 300,000 businesses globally. The acquisition is part of Thryv's strategy to extend its market presence and innovate its service offerings.
This article is based on a press release statement from Thryv Holdings, Inc.
In other recent news, Thryv Holdings has announced a public offering of $75 million in common stock to partially fund the acquisition of Infusion Software, Inc., also known as Keap. RBC Capital Markets is the sole book-running manager for this offering, which is contingent on market conditions. In another development, Thryv received a Buy rating from Craig-Hallum, which cited a promising growth story within Thryv's Software as a Service (SaaS) segment.
The company's SaaS offerings have shown significant growth, with a consistent 20%+ growth rate and expanding margins. In the second quarter of 2024, Thryv reported a robust 25% year-over-year increase in SaaS revenue, reaching $77.8 million, and a 60% year-over-year increase in adjusted SaaS EBITDA, reaching $10 million.
These developments have led Thryv to explore mergers and acquisitions to strengthen its market position. The company is also enhancing Thryv AI capabilities and considering a freemium option for future product rollouts. According to analysts, Thryv's SaaS business is expected to become a major revenue contributor, with SaaS revenue projected to represent over 40% of their consolidated revenues in 2024 and more than 50% in 2025.
InvestingPro Insights
As Thryv Holdings (NASDAQ: THRY) moves forward with its acquisition of Keap, investors may find value in examining some key financial metrics and insights provided by InvestingPro.
According to InvestingPro data, Thryv's market capitalization stands at $666.89 million, reflecting its position in the SMB SaaS market. The company's revenue for the last twelve months as of Q2 2024 was $877.69 million, with a gross profit of $565.58 million and a healthy gross profit margin of 64.44%. These figures provide context for the $80 million acquisition of Keap and its reported $85 million in revenue.
An InvestingPro Tip highlights that Thryv's liquid assets exceed its short-term obligations, suggesting a strong financial position to support the acquisition and integration of Keap. This liquidity strength aligns with the company's strategy to fund the purchase through a combination of equity financing and existing credit facilities.
Another relevant InvestingPro Tip indicates that analysts anticipate a sales decline in the current year. This forecast makes the Keap acquisition particularly significant, as it could potentially offset any organic revenue challenges and contribute to the "accelerated top-line growth" mentioned in the article.
It's worth noting that while Thryv was not profitable over the last twelve months, with a P/E ratio of -11.36, analysts predict the company will be profitable this year. This projection, combined with the expected synergies from the Keap acquisition, could signal a positive turn for Thryv's financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 7 more InvestingPro Tips available for Thryv Holdings, providing a deeper understanding of the company's financial health and market position.
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