- ELMO Software (ELO) has completed its $32.4 million acquisition of UK-based human resources platform Breathe
- The company is expected to pay a further $7.2 million to the vendors of Breathe upon the achievement of certain financial targets
- Breathe has more than 6,700 customers in the UK, and will now be launched across Australia and New Zealand
- As of August 31, Breathe’s annualised recurring revenue was $6.5 million, growing at approximately 30 per cent each year
- ELMO Software (ELO) closed 0.96 per cent in the green for $5.26 each
ELMO Software (ELO) has completed its $32.4 million acquisition of UK-based human resources platform Breathe.
In addition to the initial payment, Breathe’s vendors are also eligible to receive a further or £4 million (approximately A$7.2 million) upon the achievement of certain financial targets.
Founded in 2012, Breathe offers access to the small business segment, and adds more than $2.2 billion to ELMO’s total addressable market.
Breathe currently has more than 6,700 customers across the United Kingdom and, as of August 31, generates roughly $6.5 million in annualised recurring revenue, which has been growing at approximately 30 per cent each year.
Its revenue is based entirely off subscriptions, and has a customer retention rate of more than 85 per cent.
ELMO now expects to launch Breathe in Australia and New Zealand, providing access to a potential $660 million market opportunity. Conversely, Breathe will cross-sell existing human resources modules already operated by ELMO within the United Kingdom.
Danny Lessem, CEO of ELMO Software, said the acquisition of Breathe is an important step in the company’s evolution as a provider of cloud-based HR solutions.
“Strategically, Breathe is a very compelling, fast growing business. It provides ELMO with access to a new and attractive customer segment, complementary technology, and a significant UK footprint. The strategic crossovers and revenue opportunities are very meaningful, and our market opportunity has significantly expanded,” he added.
With the acquisition now complete, ELMO has revised its financial guidance for the 2021 financial year. Total revenue was previously forecast at between $57 and $61 million, but is now anticipated to reach up to $66 million.
ELMO Software (ELO) closed 0.96 per cent in the green for $5.26 each.