LONDON (ShareCast) - (Sharecast News) - Education software company Tribal has agreed to acquire cloud-based higher education scheduling software supplier Semestry, it announced on Thursday, for initial cash consideration of £4.5m.
The AIM-traded firm said a further £1.5m contingent cash consideration based on achieving incremental increases in annual recurring revenue would be payable over two years from completion.

It said the acquisition would be financed out of its existing cash resources, which totalled £10.2m.

The board said the acquisition would expand Tribal's product portfolio, adding scheduling and timetabling capability to its 'Tribal Edge' ecosystem of higher education products.

That, it explained, would provide additional upsell opportunity to its existing and new customers, as well as cross-sell opportunities for Tribal applications into Semestry's customer base.

The acquisition would also expand its addressable market opportunity in the UK, Australasia and southeast Asia, as well as other markets.

It would be earnings accretive on a pro-forma basis, and Tribal said it would invest in Semestry to provide increased sales and delivery capacity to drive additional revenue.

The software was developed natively in the cloud, and is delivered on a software-as-a-service (SaaS) basis.

Semestry currently services 21 customers across five countries in Europe, including the University of Cambridge, the University of York, Manchester Metropolitan University, Birmingham City University, the University of Amsterdam in the Netherlands, Aarhus University in Denmark, Universiteit Hasselt in Belgium, and Reykjavik University in Iceland.

Its SaaS annual recurring revenue at the date of acquisition was £0.9m, having grown by more than 40% in the prior 12 months.

"We are delighted to welcome the Semestry team to Tribal Group as we deliver on our strategy to provide complete, integrated student information systems delivered as SaaS solutions in the public cloud," said chief executive officer Mark Pickett.

"Semestry has developed and delivered market-leading SaaS solutions which, with their strong client relationships, will open up an exciting opportunity for Tribal and expand our Tribal Edge ecosystem of best-in-breed student management applications.

"The group remains selective in its approach to acquisition opportunities which will focus on cloud-based solutions, as well as building a partner ecosystem of best-of-breed solutions which maximises the value-add for our current customers."

At 1456 BST, shares in Tribal Group were down 3.77% at 102p.

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