Sharecast - The AIM-traded consultancy said Insigniam, a US-based consulting firm with over 50 professionals, specialises in guiding clients and executives through large-scale change and transformation initiatives.
It said the strategic move marked its fifth acquisition since its initial public offering in July 2020 and the third in the United States, reinforcing its presence in the critical market.
In the 12 months ended November, Insigniam reported revenue of $13.7m, normalised EBITDA of $2.3m, and normalised profit before tax of $2.3m.
The initial consideration for the acquisition reflected a 5.7x multiple of 2023's last 12 months' EBITDA based on the November financials, with the transaction expected to be immediately earnings-enhancing.
Elixirr (LON:ELIX) said the acquisition would add valuable services in transformation, leadership alignment, cultural change, and executive coaching to Elixirr's existing portfolio.
Additionally, Insigniam would bring expertise in additive industries, particularly healthcare, biopharmaceuticals, life sciences, and the consumer and retail sectors.
With a substantial client base including Fortune 500 companies and household brands, Insigniam had earned a reputation for delivering exceptional value, boasting a net promoter score of 66, with 85% of clients reporting that Insigniam provided more value than any other consulting firm.
The acquisition also held tax benefits for Elixirr, as the US goodwill would be tax-deductible, resulting in an estimated tax benefit of $2.8m to $4.3m over 15 years.
Insigniam was co-founded by Shideh Sedgh Bina and Nathan Owen Rosenberg, who would continue to lead the business within Elixirr.
The acquisition consideration included an initial payment of $11.6m from Elixirr's existing cash reserves, an additional $1.5m through the issue of 258,553 Elixirr shares, and deferred consideration of up to $5.4m contingent on Insigniam meeting revenue growth and EBITDA margin targets by the end of 2026.
Following the acquisition, Elixirr said it would have about £13.5m in net cash.
Furthermore, Elixirr said it promoted three partners who would subscribe for 107,527 shares each for 465p apiece.
The shares would be subject to one-year lock-in arrangements and limitations on their sale for the following four years.
"I am always exceptionally proud to expand our team, and finding the right people to bring into the group is no small task," said Elixirr founder and chief executive officer Stephen Newton.
"Our mergers and acquisitions team works tirelessly to find companies that not only broaden what we're able to offer clients but improve the work we're already doing with them.
"We also look for those who share in Elixirr's ethos, entrepreneurial spirit and desire to create meaningful change - and in Insigniam we have found exactly that. I look forward to seeing the impact of their team's unique approach to consulting - which looks deeply into the areas many consultancies often overlook or don't have true capability to impact."
Newton said Insigniam was "the undisputed market leader" in transformation and organisational change, which would be "extremely valuable" to current and future clients.
"By combining our services and expertise, from strategy through to execution, we are very well-positioned to provide full end-to-end services to our collective clients in a more impactful, dynamic way."
At 1309 GMT, shares in Elixirr International were up 1.08% at 470p.
Reporting by Josh White for Sharecast.com.