MSL Solutions acquires OrderMate with backing from top US equity firm

Capitalising on the rise of contactless hospitality which has been accelerated by COVID-19, tech company MSL Solutions (ASX: MSL) is expanding its operations with the backing of Taubman Capital to acquire OrderMate and its 2,400 customers that use the mobile ordering platform. 

The acquisition expands MSL’s tech suite which has primarily been point-of-sale (POS) products used in large crowd venues such as sporting stadiums, into small business hospitality. The OrderMate app is most commonly used in restaurants where diners can scan a QR code at their table and place their order which goes direct to the kitchen with payment accepted via the app. Using it, customers have zero contact with staff which has been hugely popular for venues through the pandemic. 

“We are delighted to welcome OrderMate and its customers to the MSL Solutions group. OrderMate is a great brand and is an established restaurant point-of-sale provider across Australia which complements our existing SwiftPOS customer footprint,” said MSL CEO, Pat Howard. 

“With approximately 2,400 venues and ~$2B in annual transactional value, OrderMate allows MSL to take a further step toward increasing our financial and operational scale and growing our base of annualised recurring revenue by more than $3m. We see this acquisition as highly complementary and are excited by what the future will bring us together.” 

From its network of restaurant and takeaway venues, OrderMate generated $1m EBITDA in FY21 but with its integration of MSL, further opportunities are expected to be explored by MSL with a substantially larger addressable market than their previously targeted larger crowd venues.

Total consideration for OrderMate is $7.5 million comprising $5.5m cash and $2m in MSL shares. 

The acquisition will be partially funded by a $4.5m investment in MSL secured from US-based private equity firm Taubman Capital. The funds come in the form of convertible notes on a 3-year term with conversation to equity at any time or on maturing. Notably, the notes have zero percentage interest in a show of confidence by Taubman. The conversion rate is $0.2078 per note which is the 10-day VWAP of MSL shares prior to the acquisition being announced. 

“We are excited to continue to invest in the technological transformation occurring in the sports, hospitality, and entertainment industries,” said Taubman Capital Managing Director, Christian MacCarron.

“MSL has proven to be a leader in the POS and Golf markets, and we look forward to helping them expand their payments offering and expansion into North America as well as pursue other inorganic growth opportunities. The management team has proven the ability to execute a thoughtful, organic and inorganic growth strategy.”

Over the last 71 years, the Taubman family has built Taubman Centres into a leading global owner and operator of regional and super regional malls. 

A Share Purchase Plan will also be opened shortly to MSL shareholders at the same purchase price as the Convertible Note conversion price of $0.2078 per share.