Vertex, Inc. (NASDAQ: VERX), a tax technology solutions provider, has announced its acquisition of ecosio, a prominent provider of B2B integration solutions specializing in electronic data interchange (EDI) and e-invoicing. The acquisition is subject to customary regulatory approval from Austrian authorities.
This move is set to advance Vertex’s vision of accelerating global commerce by integrating ecosio’s cloud-based network with Vertex’s indirect tax solutions. The combined platform will facilitate the creation, exchange, and clearance of compliant e-invoices, addressing the increasing need for real-time and near-real-time digital tax reporting.
The combined solution is expected to address the growing complexity of VAT reporting and e-invoicing mandates worldwide, offering a robust global compliance platform with Continuous Transaction Controls (CTC) capabilities. This will streamline the compliance lifecycle from tax determination to periodic reporting and automated B2B communication.
FINANCIALS OF THE ACQUISITION
Under the agreement, Vertex will make an upfront cash payment of $69 million for ecosio, with an additional earn-out of $76 million in cash and $35 million in Vertex shares based on ecosio’s performance over the next three years. The transaction will be funded using Vertex’s available cash.
The acquisition is expected to close by the end of Q3 2024, pending regulatory approvals.
The transaction is expected to contribute approximately $15 million in revenue within the first 12 months post-closing. Initial R&D investments will make ecosio modestly dilutive to profitability in the first two years, with anticipated accretion to profitability in the third year.
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