RPMGlobal share price up following acquisition of mining software company

The RPMGlobal Holdings Ltd (ASX: RUL) share price closed trading yesterday up by 3.09% to $1.00, following the announcement of an acquisition by the company.

What was the acquisition?

According to the announcement, RPMGlobal will acquire 100% of Revolution Mining Software, a private company based in Canada. Revolution Mining Software has more than 6 years experience developing and selling its flagship ‘Schedule Optimisation Tool’, which is a mine scheduling optimisation software solution for tier one miners.  

The tool emerged following research from the non-profit organisation Mining Innovation, Rehabilitation and Applied Research Corporation (MIRARCO). The organisation is based at Laurentian University in Canada and has a reputation for solving complicated mining industry problems. 

According to the announcement, the software is the only strategic financial optimisation tool for underground mines that enables planners to improve productivity and profitability by optimising the net present value (NPV) of the mine schedule.

Commenting on the acquisition, RPMGlobal CEO and managing director Richard Mathews stated:

We are very pleased to have concluded negotiations to to acquire Revolution Mining Software and are really looking forward to welcoming Lorrie and the rest of the Revolution team into the RPM family. We will invest in their industry leading scheduling optimisation tools to deliver innovative solutions that add real value to our customers.

RPM was born from the understanding that mine planning needs to be built on sounds economics and the Revolution Mining product strategy is completely aligned with that core value.

Following the transaction, all of Revolution Mining Software’s employees will move into the RPMGlobal business.

The transaction will be paid for with RPMGlobal’s existing cash reserves and consists of an upfront payment of CAD$500,000, along with a 2 year earn-out agreement. The acquisition is set to be finalised on 31 July 2020.

About the RPMGlobal share price

RPMGlobal has been listed on the ASX since 2008. It is a provider of mining software solutions, advisory services and professional development to the mining industry. RPMGlobal has worked with mining companies in 125 different countries over the last 50 years. 

Last week, RPMGlobal announced that it expects to finish the 2020 financial year with a total contracted value of software subscriptions of $34.5 million. The company also announced that its recurring revenue from software subscriptions was $12.7 million per year.

In the first half of the 2020 financial year, RPMGlobal had revenue of $41.1 million, a 5% decline on the same period in 2019.

The RPMGlobal share price is up 92.3% from its 52 week low of $0.52. It has returned 17.65% since the beginning of the year. The RPMGlobal share price is up 66.67% since this time last year.

More reading

• Zip share price surges 30% in a week. Are we calling bubble yet?
• 2 quality ETFs I’d buy today
• Is the Woolworths share price a buy?
• 5 things to watch on the ASX 200 on Friday
• Why Domino’s and Nanosonics shares could be fantastic buy and hold options

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of RungePincockMinarco Limited. The Motley Fool Australia has recommended RungePincockMinarco Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post RPMGlobal share price up following acquisition of mining software company appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iKyZOF