Attraqt strengthens its position in e-retailing software Attraqt completes reverse takeover of rival

Acquiring bigger rival Fredhopper gives Attraqt the scale and resources it needs for success

 Attraqt completes reverse takeover of rival

Attraqt (AIM: ATQT) has transformed the scale and prospects of its business through the completion of a reverse takeover. It is the number two player in providing specialist software which allows online retailers to merchandise their websites attractively. The products featured are also personalised in response to an individual shopper’s search queries and purchasing behaviour. It helps raise the productivity of a retailer’s online activities.

Going Dutch

The opportunity arose to acquire the number one company in this niche, Netherlands-based Fredhopper. The fit between the two companies looks to be good with them both being the only companies to offer a full range of services, yet different client bases. Attraqt has mainly sold to mid-tier retailers, while Fredhopper deals with larger ‘enterprise’ scale customers. Revenues for the combined group will jump from under £4 million to around £17 million and staff numbers rise three-fold to 120 heads.

Scale benefits

Importantly the client list doubles in size to 250 and includes some impressive names like Tesco, Superdry and boohoo.com. A big advantage of this increased scale is that the company becomes more credible to both potential clients and to the stock market, with the market cap now £46 million. Many small technology companies struggle to achieve critical mass; so pulling off a deal to acquire a bigger company in precisely the same niche industry should be a major leap forward. New investors who came in on the £28 million placing included Henderson, Artemis and Herald. 

A reverse takeover like this can be tricky from an integration perspective but Attraqt CEO Andre Brown is upbeat. One reason for optimism is the fact that Fredhopper was a unit of SDL, the listed translation business, so it doesn’t have a PLC style board of top management to placate. It also suggests that Attraqt should be a more natural home for Fredhopper. There ought to be efficiency gains in technology, but the deal is more about generating growth. Attraqt is an interesting specialist in a field which modern retailers simply have to get right if they are to prosper.  

 

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