XPON Technologies (ASX: XPN) is set to acquire Alpha Digital Design Consultants, a long-term channel partner, for a maximum consideration of $2.61 million. This strategic move aims to enhance XPON’s competitive artificial intelligence (AI) solutions offering. The deal includes an upfront payment of $1.72 million, a $180,000 share placement, and up to $890,000 in performance-based earn-ins, payable in cash or shares.
The acquisition is projected to immediately contribute $4 million in recurring revenue and a $1 million cash injection to XPON, accelerating the company’s path towards positive cash flow and EBITDA profitability. Alpha Digital brings a strong portfolio of blue-chip clients, including Target, K-Mart, QUT, and Stone & Wood, with 87% of its revenue derived from recurring contracts. XPON anticipates that combining its existing solutions with Alpha’s offerings will provide customers with a broader range of integrated solutions and drive average revenue per user growth through cross-selling opportunities. The acquired entity will retain its brand under the name *Alpha Digital powered by XPON* and continue independent operations, while centralizing back-office and corporate functions with XPON. XPON’s board and senior management will remain unchanged after the transaction.
