A fast-growing Morrisville company whose cloud-based software aims to make it easier and cheaper for publicly traded companies to meet their disclosure obligations has doubled in size with its latest acquisition.
Issuer Direct, a publicly traded company whose 33 employees are based mostly at its Triangle headquarters, announced Tuesday that it has acquired Precision IR Group of Richmond, Va., for $3.45 million. The deal, which is the largest of Issuer’s five acquisitions to date, is expected to “much more than double” Issuer’s revenue over the next 12 months, and expands its staff to 64 workers, CEO Brian Balbirnie said.
“The company is poised for some significant growth,” Balbirnie said in an interview.
The acquisition also moves Issuer into a new market. Precision fulfills investor requests for annual reports and other company information for more than 750 clients – including BP, Microsoft and Apple – as well as handling requests for information on 2,200 public companies through more than 250 partners in North America and Europe.
Balbirnie said that in addition to immediately expanding Issuer’s revenue, the deal gives Issuer a golden opportunity to cross-sell Precision customers on its software.
Issuer’s software enables publicly traded companies to disseminate a wide variety of information – press releases, financial reports, proxy statements, etc. – to investors, regulators and a host of others, such as financial printing firms.
Issuer’s disclosure management system can replace services supplied by multiple vendors, Balbirnie said. Although clients can pay to use Issuer’s software for just a single function, nearly half use it for more than two functions.
“We’re not asking a client to do something new,” Balbirnie said. “We’re asking a client to replace something that they’ve been doing for years but do it more efficiently and, while they’re at it, they’re saving 20 percent to 50 percent off what they’re currently paying today.”
Issuer was founded in 2006 and became a publicly traded company through a 2007 acquisition.
“Since 2006 we’ve been building infrastructure, building technology, building a team,” Balbirnie said.
Issuer posted $4.3 million in revenue last year, up 33 percent from 2011. Net income totaled $305,732, up 28 percent.
More recently, second-quarter revenue expanded 56 percent to $1.7 million. Net income totaled $364,681, more than 10 times the $35,949 in net income it recorded a year earlier.
Investors have noticed the growth, pushing its shares up 143 percent this year. The stock closed Tuesday at $7.90, down 44 cents.
To finance the acquisition, Precision is borrowing $2.5 million from New York-based Red Oak Partners. That loan can be converted into 626,566 shares of common stock, which would give Red Oak shares for $3.99 each.
In addition, David Sandberg, the founder and managing member of Red Oak, has joined Issuer’s board of directors.
The chairman of Issuer’s board is Andre Boisvert, former president and chief operating officer of Cary-based business software giant SAS.