Irvine-based software maker Kofax PLC has acquired a company in Northern Ireland that specializes in process-management software, a market eyed by Chief Executive Reynolds Bish for its growth potential.
Kofax acquired all of the stock of Singularity Ltd. in a deal worth as much as $48.1 million if the company meets certain revenue and other milestones.
About $30 million was paid at the close of the transaction and another $3.3 million will be paid in a year. The rest will be paid out over the next two years if conditions are met.
The deal calls for Padraig Canavan, founder, chief executive and majority shareholder of Singularity, to join Kofax as senior vice president of business processing management software.
Bish singled out the process management segment of the software market for growth opportunities in a recent interview with the Business Journal.
The acquisition is expected to give Kofax entree in a segment that saw $2.2 billion in sales in 2010, with projections of growth to $3.1 billion by 2013.
“This increase in addressable market, coupled with Kofax’s existing direct and indirect sales channels and global reach, will significantly expand and accelerate Kofax’s revenue growth opportunities,” Bish said.
Singularity’s software helps companies handle daily operations, such as invoice and claims processing, data capture and automation.
Kofax makes scanning software used by businesses to get rid of paper and speed up productivity.
The software collects paper documents, forms, invoices, emails and photos and organizes them into a searchable database of files.
The combined product offerings will be sold via the cloud or on a subscription basis.
Singularity is based in Derry, Northern Ireland, and employs about 215 people. It also has operations in Belfast, London and India.
The company sees about $16 million in annual revenue.
Projection
The buy is projected to add about $8 million in revenue for Kofax between now and the end of the company’s fiscal year in June, and “slightly” diminish adjusted profits, according to Bish.
Kofax is coming off a record year in sales, hitting $244 million for the 12 months through June.
• Headquarters: Irvine
• Business: business software
• Founded: 1985
• Ticker symbol: KFX (London Stock Exchange)
• Market value: about $210 million
• Notable: bought Derry, Northern Ireland-based Singularity Ltd. in a deal worth as much as $48.1 million with milestone payments
The company, which is publicly traded in London but has its executives based here, reported adjusted profits of $7.1 million, down 14% from a year ago.
The company is growing revenue about 10% to 15% a year and has targeted a handful of new market segments, according to Bish.
That led to its buy of Massachusetts-based software maker Atalasoft Inc. in May. Kofax paid $4.7 million for Atalasoft, with another $5.1 million possible in potential milestone payments.
Atalasoft makes software used by software developers and technology consultants that allows documents to be viewed online.
Kofax employs about 300 people in Irvine and 1,000 companywide. It is the county’s eighth-largest software maker by revenue, according to Business Journal research.
