PayGroup to expand HR tech through Asia with TalentOz acquisition

Human resources tech company PayGroup (ASX: PYG) is set to significantly expand its human capital management (HCM) software suite following the acquisition of TalentOz and their complementary talent management software. 

Already with a powerful offering of 16 HCM modules which are used by more than 875 PayGroup clients, the addition of TalentOz will bring 11 additional modules and 40 clients based primarily in India and Malaysia. 

By integrating TalentOz’s software into PayGroup’s, the company anticipates it will form a comprehensive suite that meets all HCM needs across the “Hire to Retire” employee lifecycle. 

“TalentOz have an impressive management & sales team as well as channel partners, who have developed and commercialised a world class SaaS Human Capital Management (“HCM”) product suite,” said PayGroup Managing Director, Mark Samlal. 

“PayGroup and TalentOz have been partnering to win new customer opportunities and are already seeing early success – a positive indication of the future potential for our combined product offering. 

“TalentOz has established an impressive track record over the past few years and PayGroup is looking forward to working with their talented employee team.”

PayGroup will acquire all TalentOz assets from Malaysian-based SMRT Holdings and a private shareholder, which includes an experienced in-house technology development centre in the Asian region that will work closely with PayGroup’s existing team in Australia. 

Total consideration for the acquisition is SG $1.15m which comprises SG $165k cash and the remainder in PYG shares issued at $0.84 each. A further SG $500k is payable subject to business performance. 

The acquisition comes at an interesting time for PayGroup when the dynamic of business practices face unprecedented disruption to the way workforces are managed. Once the merger is complete, PayGroup expects to realise significant technology cost synergies as well as new channel partners across the 33 counties they service. 

For the 12 months ending 31 March 2020, PayGroup reported revenue of $10.1 million and a statutory EBITDA loss of $600k, but a strong March quarter that delivered positive operating cash flow of $1.8m.