Talent management software vendor ELMO has acquired cloud-based SaaS payroll software system Sky Payroll for up to $1.8 million.
Through the acquisition, ELMO is hopeful of new opportunities in light of the Australian Tax Office’s (ATO) mandatory single touch payroll reporting (STPR), which requires companies to have a compliant payroll solution by 1 July 2018.
Sky Payroll chief executive and founder Roger Graham will join ELMO’s management team as part of the deal.
“We are delighted to welcome Roger Graham and his team to ELMO at this exciting time as we execute our accelerated growth strategy,” ELMO chief executive Danny Lessem said.
“This acquisition was recommended to us by our customers, recognising the complementary product fit and clear market need for an integrated suite of HR solutions including payroll with a single dashboard and reporting suite.”
“Once we have fully integrated Sky Payroll, we will be able to leverage our broadened, integrated suite of ten HR modules across our enlarged customer base.”
He added that the acquisition aligned with ELMO’s growth strategy, supplementing growth with acquisitions that can help expand its existing integrated product suite to a larger customer base.
The initial purchase price of $1 million will be paid in a combination of cash and scrip, with the remaining $400,000 deferred, while another $400,000 will be paid upon meeting performance targets.
New shares will be issued at $3.53 per share, representing the 10-day volume weighted average price up to and including the date of the sale agreement on 11 December. The acquisition is expected to complete in early 2018.
“Since 2014, we at Sky Payroll have focused on building an intuitive cloud-based payroll solution,” Roger Graham said.
“To be successful in HR software, we identified the need for product breadth, scale and distribution strength. ELMO offers all of these components and as such we are very pleased to be joining the team.”