(Alliance News) - Attraqt Group PLC on Thursday said it has acquired Aleph Search and announced a GBP4 million subscription to fund the deal and accelerate growth.
Aleph Search is an artificial intelligence powered search technology. It provides a machine learning-based solution for matching a text string entered into an e-commerce site's search box against products on that site. It does this by training an algorithm using the product catalogue and usage logs for search terms on the site.
The algorithm then creates a "product fingerprint" for each product in the site catalogue which can be used to identify and return products most closely matching that fingerprint.
Attraqt will acquire Aleph for an initial GBP350,000 cash consideration plus 3.6 million new Attraqt shares, with additional contingent shares and cash payable based on targets over a three year period.
In acquiring Aleph's technology, Attraqt said it hopes to enhance its AI-powered search functionality, accelerate its product roadmap by around two years, and provide the underlying platform to use it future product innovation.
Aleph's technology will be combined with Attraqt's existing Fredhopper Discovery Platform and Experience Orchestrator, creating a "more sophisticated, 'Google-like' search experience for e-commerce".
Attraqt is raising gross of GBP4 million through a 12.5 million share placing priced at 32 pence per share, a 3.2% premium to its Wednesday closing price.
Shares in Attraqt were up 16% at 36.00p in London on Thursday.
Of the GBP4 million, around GBP1 million will be used to fund the Aleph acquisition and related expenses, while approximately GBP2 million will go towards increasing Attract's investment in sales and marketing. The rest will be used for product development and working capital.
Canaccord Genuity Ltd is nominated advisor, sole bookrunner and sole broker for the placing.
Attraqt Chief Executive Mark Adams said: "The acquisition will enable us to not only immediately enhance the Group's AI search capability and accelerate our product roadmap by an estimated two years, but also enhances our competitive advantage. This technology builds upon the new Experience Orchestrator platform we developed from the Early Birds acquisition and means we will be offering an end-to-end best-in-class product offering for clients.
"We have been working together with Aleph for six months and we have already seen the combined offering provide tangible results to our existing customers, generating approximately 20%-60% higher conversion rates in proof of concept trials. Importantly, we are confident that the combined offering will give us the opportunity to increase our new business win rate and to further upsell into our existing base through a more competitive offering."
Separately, Attraqt said Chair Nick Habgood subscribed for 831,260 shares via Azini 3 LLP at the 32p price for GBP266,003. Azini 3 now holds 24.8 million shares in total or a 13% stake.
Additionally Chief Financial Officer Eric Dodd subscribed for 31,250 shares for a total of GBP10,000, giving him 123,842 shares or 0.06% holding.
By Anna Farley; annafarley@alliancenews.com
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