CONSUMER technology firm Xurpas Inc. has struck a deal to acquire a 70 percent interest in Seer Technologies Inc., a software firm focused on mobile, cloud and data technologies.
In the disclosure posted on the Philippine Stock Exchange on Friday, Xurpas acquired the controlling stake in Seer at a price of P18 million and an “earn out” amount corresponding to a fixed percentage of Seer’s net income after tax for the years 2015 to 2017.
“Earn out” is contractual provision in mergers and acquisitions that allows the seller to generate additional compensation in the future based on the business achieving prospective financial goals.
“The acquisition of Seer enhances our ability to provide mobile solutions for our enterprise clients. As consumers move from being web to mobile-centric, corporations will need to have a strong presence on phones, tablets and other devices. For years, Seer has been a leader in the mobile platform development space, and is perfectly positioned to serve this rapidly growing industry,” Xurpas chief executive officer Nix Nolledo said in a press statement.
Asked about the earn out provision, Nolledo said this would give incentive to the management to continue growing the business. “Payout is greater if they have better earnings performance. It’s beneficial for both Seer and Xurpas, In terms of the pricing, we’re looking at the total payout to be seven times the earnings,” Nolledo said in a text message.
Seer, a software consultancy, design, development and managed services, started operating in 2003 as a mobile technology company and has since been developing mobile applications for its clients. It has 50 employees at present, primarily composed of software engineers.
After 11 years of operations, Seer has established an expansive roster of clients from the telecommunications, banking, real estate, oil and gas, hospitality, media, and retail sectors. It is ISO 9001:2008 certified for its delivery of software development services and is also an Amazon Web Services (AWS) managed partner, making it capable of developing mobile and web back-end solutions anywhere in the world.
In 2014, Seer posted revenues of P70 million.
Xurpas, which debuted in the local bourse in December of last year, was the best performing stock on the Philippine Stock Exchange for 2014.