Nitro Software (ASX:NTO) share price lifts following acquisition

Nitro does some signing of its own with its latest acquisition…
The post Nitro Software (ASX:NTO) share price lifts following acquisition appeared first on The Motley Fool Australia. –

The Nitro Software Ltd (ASX: NTO) share price is on the move today after the company announced an acquisition.

Prior to market open, shares in the document productivity company were $3.36 apiece. In early trade, the Nitro Software share price is trading 2.38% higher at $3.44.

The deal marks Nitro’s first acquisition since its ASX initial public offering (IPO) in December 2019. Let’s take a closer look at the details.

Nitro Software share price gets a boost

Investors are driving up the Nitro Software share price after the company announced its first acquisition since joining the ASX ranks.

According to its release, Nitro has entered an agreement to acquire the PDFpen technology from US-based Smile Inc for $6 million in cash. Smile was founded in 2003 and develops productivity software for Mac, Windows, Chrome, iPhone, and iPad.

PDFpen specifically is a market-leading suite of PDF productivity applications for Mac, iPhone, and iPad. The technology brings document viewing, reviewing, collaboration, form filling, search, redacting, and export tools to the user’s fingertips.

While Nitro’s eSigning feature is already available on any device with a web browser, the acquisition brings native PDF productivity support to Apple product users.

Payment for the acquisition will be funded from Nitro Software’s existing cash reserves. The company’s cash balance stood at $41.8 million at the end of March 2021.

CEO commentary

Additionally, the company stated the expansion of its platform comes at a critical time for customers. The work from home tailwinds driven by COVID-19 has accelerated the digital transformation, including the use of Mac and mobile devices.

The acquisition of PDFpen means Nitro’s suite extends to virtually every device and operating system.

Nitro Co-founder and chief executive officer Sam Chandler stated:

As the first acquisition since our IPO, PDFpen marks a significant strategic milestone for Nitro. The addition of Mac and mobile capabilities to our platform better enables us to serve businesses and individuals on any device or operating system at a time when digital transformation has never been more relevant or more urgent for organisations around the world. It represents a major advance in Nitro’s vision to make document productivity easy, powerful and available to all.

The transaction is subject to customary closing conditions. If all goes to plan, these will be met on or before 9 July 2021. Nitro hinted that its significant cash reserves allow it to pursue further targets if they arise.

Outlook reaffirmed

In other news possibly boosting the Nitro share price today, the company took the opportunity to also reaffirm its FY21 guidance.

Nitro still anticipates ending annual recurring revenue to be between $39 million and $42 million. Revenue is expected to range between $45 million and $49 million. Meanwhile operating earnings before interest, tax, depreciation, and amortisation (EBITDA) is slated to be a loss between $11 million and $13 million.

The Nitro Software share price has returned around 128% over the past 12 months.

The post Nitro Software (ASX:NTO) share price lifts following acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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