Sales performance software company Bigtincan makes $116m bet on Brainshark

Sales performance software company Bigtincan makes $116m bet on Brainshark

Bigtincan CEO and co-founder David Keane

Founder-led Australian sales software group Bigtincan (ASX: BTH) will dilute almost a third of shareholdings to raise the funds necessary to buy Brainshark Inc, a data-driven sales coaching platform with customers including Zoom, PepsiCo and AstraZeneca.

After entering a trading halt this morning, Bigtincan announced it had reached a deal to acquire 100 per cent of shares in Massachusetts-based Brainshark for US$86 million ($116 million) - a move that will bring an additional baseline annual recurring revenue (ARR) of $46 million.

That additional revenue is not far off Bigtincan's own ARR of $53.1 million in FY21, and in the June quarter alone the company - founded in Sydney but now with its headquartered in Boston - brought on high-profile new clients such as Fujitsu, AirFrance and Uber Eats.

In July, Bigtincan CEO and co-founder David Keane reiterated a mission to create the "buying experience of the future" for customers' customers, with a business model underpinned by strong underlying unit economics and the benefits of an organic growth engine combined with "smart M&A".

In December the group acquired Clearslide, a US-headquartered Software as a Service (SaaS) platform for sales engagement software, for $22.6 million in cash, while in 2021 Bigtincan has made smaller acquisitions including Baltimore-based voice analytics group VoiceVibes for $2.8 million and Swiss augmented and virtual reality systems group Vidinoti SA for $770,000.

But the deal announced today dwarfs those acquisitions to bring market-leading technology into the Bigtincan stable that is expected will generate growth of $119 million at the end of this financial year.

Bigtincan highlights Brainshark’s data-driven sales readiness platform provides content authoring, readiness scorecards, training and onboarding, and coaching and practice; services that have earned it numerous industry awards including the Gold Stevie, Sales Tool of the Year for 2021, and Top 10 Vendor Award by Selling Power Magazine for 2021.

Brainshark’s customers operate across diverse industries including financial services, insurance, healthcare, software & technology and manufacturing.

To fund the ambitious acquisition, Bigtincan will raise $135.3 million of which $21 million will come from a placement with US investment firm SQN Investors.

This institutional placement, as well as an underwritten accelerated pro-rata non-renounceable entitlement offer worth $114.3 million, will result in the issue of 128.9 million new ordinary shares, representing approximately 31 per cent of current securities on issue.

The funds will be raised at $1.05 per share, which is at a 12.1 per cent discount to Bigtincan's last closing price.

The ASX has confirmed shareholder approval of the acquisition is not required, although the deal is subject to customary closing conditions and is expected to close within two weeks.

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