Upland Software, Inc. (Nasdaq: UPLD), a provider of cloud-based enterprise work management software, has acquired Cimpl, a cloud-based telecom expense management platform, the company said.
The addition of Cimpl to Upland´s Project & Financial Management Solution Suite creates the market´s first IT Financial Management Cloud (ITFM Cloud) with enterprise-class IT financial management and full lifecycle telecom expense management, enabling enterprises to measure, manage, and align IT and telecom assets and spending at scale. The acquisition adds approximately USD 8 million in annualized revenues and will be immediately accretive to Upland´s Adjusted EBITDA per share.
Enterprise IT spending was over USD 3 trillion last year, with telecom spending representing 18% of the total. Against an increasingly complex background of legacy, on-premise and cloud-based spending, including owned and third-party IT, hardware, software and services, mobility and fixed telecom, machine to machine, and Unified Communications assets, enterprises struggle to achieve measurable and repeatable cost savings and strategic alignment with their broader digital business transformation objectives.
With Cimpl, Upland can address these objectives directly by offering a comprehensive ITFM Cloud that combines IT financial management (including Bill of IT, consumption and demand management, holistic application management, cloud cost management, visual modeling, call accounting, and showback/chargeback) with enterprise-class telecom expense management (from provisioning through usage, contract, and invoice management, to cost allocation and end-user IT and technology self-service capabilities). In addition, Upland´s proven project & portfolio management platform enables IT and business decision makers to drive, manage, and measure complex digital business transformation initiatives.
The purchase price paid for Cimpl was USD 23.1 million in cash at closing, and a USD 2.6 million cash holdback payable in 12 months (subject to indemnification claims). Upland expects the acquisition to generate annual revenue of approximately USD 8.0 million, of which USD 7.4 million is recurring, subject to reductions for a deferred revenue discount as a result of GAAP purchase accounting, estimated as USD 0.4 million for the remainder of 2019. The acquisition is within Upland´s target price range of 5-8x pro forma Adjusted EBITDA and will generate at least USD 3.6 million in Adjusted EBITDA annually once fully integrated. The acquisition will be immediately accretive to Upland´s Adjusted EBITDA per share.
Upland today also announced that it has raised its third quarter and full year 2019 guidance to reflect the Cimpl acquisition, raising revenue, recurring revenue, and Adjusted EBITDA guidance ranges. The increase in 2019 revenue guidance below is net of a reduction for a deferred revenue discount as a result of GAAP purchase accounting and all guidance adjustments are prorated for an effective closing date of August 21, 2019.
For the quarter ending September 30, 2019, Upland expects reported total revenue to be between USD 54.1 and USD 56.1 million, including subscription and support revenue between USD 50.3 and USD 51.9 million, for growth in recurring revenue of 51% at the mid-point over the quarter-ended September 30, 2018. Third quarter 2019 Adjusted EBITDA is expected to be between USD 20.1 and USD 21.1 million, for an Adjusted EBITDA margin of roughly 37% at the mid-point, representing growth of 58% at the mid-point over the quarter-ended September 30, 2018.
For the full year ending December 31, 2019, Upland expects reported total revenue to be between USD 212.3 and USD 216.3 million, including subscription and support revenue between USD 197.5 and USD 200.7 million, for growth in recurring revenue of 46% at the mid-point over the year ended December 31, 2018. Adjusted EBITDA is expected to be between USD 78.2 and USD 80.2 million, for an Adjusted EBITDA margin of roughly 37% at the midpoint, representing growth of 49% at the mid-point over the year ended December 31, 2018. The transaction will be immediately accretive to Upland´s Adjusted EBITDA per share.
Upland Software (Nasdaq: UPLD) is a provider of cloud-based enterprise work management software. Upland provides seven enterprise cloud solution suites that enable more than one million users at over 9,000 accounts to win and engage customers, automate business operations, manage projects and IT costs, and share knowledge throughout the enterprise. All of Upland´s solutions are backed by a 100% customer success commitment and the UplandOne platform, which puts customers at the center of everything we do. To learn more, visit www.uplandsoftware.com.
Cimpl is the revolution of telecom, IT, and cloud expense management by helping companies manage the costs of services associated with mobility, fixed telecom, cloud, M2M, IT, and UC assets. Its signature solution brings together actionable real-time data and everyday processes to ensure that companies know what they have and what it costs at any given time. For more information, visit https://home.Cimpl.com/.