Antares Vision has entered into an agreement for the acquisition of rfXcel Corporation, a US-based Software-as-a-Service (SaaS) company, serving the Life Science and Food & Beverage sectors, for an upfront consideration of $120 million on a debt free and cash free basis.
Founded in 2003 by Glenn Abood and Jack Tarkoff, and backed by Kayne Partners Fund, the growth private equity group of Kayne Anderson Capital Advisors, L.P. since August 2017, rfXcel is a pure play software provider to the global Life Science sector, offering SaaS-based Track & Trace solutions that improve safety, enable regulatory compliance and deliver real-time business insights. The company provides supply chain digitalization and transparency through a data driven offering that includes traceability, serialization and integrated supply chain monitoring. rfXcel operates a 100% SaaS business model with a significant portion of its revenues deriving from long-term subscription-based contracts, largely recurring and with strong visibility (average contract length >4 years, >80% recurring in nature).
Headquartered in Reno, Nevada (USA), offices in San Francisco and subsidiaries in UK and Russia, rfXcel has 63 full time employees and is led by an experienced management team of veterans each averaging over 25 years of experience in the industry. With global presence in 40 countries, a diversified customer base of more than 190 clients and thousands of partners across the Life Science, the Food & Beverage and the Public sectors, rfXcel is one of the leading Track & Trace software players in the market. The company has created over 5 billion serial numbers and has the capacity to process over one million items a day, enabling complete supply chain transparency and rapid digitalization.
For the 12-month period ending 31 December 2020, rfXcel reported consolidated revenues of $17 million (c.80% generated in the US and all derived from software contracts), with a gross margin above 85%. In the period 2018-2020, rfXcel recorded a revenue CAGR in excess of 25% and the company is expected to continue to perform on a similar trajectory over the coming years.
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“Massimo and I are delighted that we have reached agreement to acquire rfXcel. The acquisition has a compelling strategic rationale with strong operational and financial benefits. The combination will strengthen Antares Vision Group's position as one of the global leaders in the Track & Trace segment, accelerating our growth and representing an attractive value creation opportunity for our customers, our shareholder the whole Antares Vision Group,” Emidio Zorzella, Chairman and CEO of Antares Vision said. “Demand for traceability and serialised products and services has increased significantly over the last few years, and this transaction accelerates our ability to offer best-in-class propositions in all our key reference sectors, Life Science and Food & Beverage. We look forward to welcoming the management and employees of rfXcel to the Antares Vision Group and working together to serve our customers across the world.”
“This transaction represents the next chapter in rfXcel’s evolving story—the combined company will offer the most comprehensive Track and Trace solution in every market around the globe. When Jack Tarkoff and I started rfXcel over 17 years ago, our vision was to make it possible to Track & Trace finished goods, raw materials and ingredients as they move in the supply chain. Antares Vision shares the same goals and, by virtue of their size and global footprint, we will be able to accelerate our plans. The rfXcel management team is delighted to join with Antares Vision to offer customers in the Life Science, Food & Beverage and other industries the most complete end-to-end solution for Track & Trace on the market today,” Glenn Abood, President and Founder of rfXcel said.
The acquisition of the entire share capital of rfXcel for an upfront consideration equivalent to $120 million (on a debt free and cash free basis, assuming a normalized level of working capital and payable in cash at closing), will be carried out as a reverse triangular merger between rfXcel and Antares Vision Acquisition Corporation, a newly incorporated vehicle of Antares Vision Inc., fully owned US subsidiary of Antares Vision S.p.A. The transaction represents an acquisition multiple of 6.9x LTM revenues at Dec-20, well below recent precedents in the industrial software space.
The parties have also agreed to an additional potential deferred cash consideration of up to $30 million payable in Q1 2023 by Antares Vision to rfXcel’s current shareholders, should certain cash-in targets be reached. The earn-out payment is linked to the collection of up to $19 million of cash from certain specific existing contracts, underpinning recurring subscription revenues and currently sitting outside of rfXcel’s standalone business plan.
As part of the transaction, it has also been agreed that rfXcel’s management team, including CEO and founder Glenn Abood, will reinvest a portion of the cash proceeds from the sale of rfXcel’s shares owned by them into Antares Vision (40% of their post-tax cash proceeds, totaling c. $8 million), while remaining in their roles to continue expanding the company and to support the delivery of the full strategic, operational and financial benefits of the acquisition. Antares Vision Group values the expertise of rfXcel’s management team and employees and will work closely with them to support the integration. As in similar recent transactions, the Antares Vision Group expects rfXcel's management to become an integral part of our team, focusing on continuing the rapid growth of the combined business Software and Smart Data offering.