Upland Software, Inc.’s (NASDAQ:UPLD) stock soared on Monday morning after the company officially announced it would acquire RightAnswers, Inc.
The Austin, Texas-based cloud computing firm announced its $17.2 million cash purchase of RightAnswers on Monday morning. Upland is also scheduled to pay a $2.5 million cash holdback, which is payable in one year. Along with the acquisition announcement, Upland updated its 2017 guidance to reflect its new, more positive outlook.
Upland’s stock price was up 10.37% to $18.84 per share in morning trading on Monday. Upland is currently a Zacks Rank #3 (Hold).
Upland acquired the cloud-base knowledge management company and its main product, the award-winning Enterprise Knowledge Hub, which can be used to help improve customer service and IT support. The purchase comes amid a big surge in Upland’s stock price, which has skyrocketed from $8.97 per share in early January.
"We are pleased to welcome RightAnswers and their valued customers and partners to Upland," Upland’s Chairman and CEO Jack McDonald said in a press release. "This strategic acquisition is a great product addition for current Upland customers looking to enhance their customer service, IT support, and enterprise-wide collaboration capabilities."
Upland’s RightAnswers purchase will help provide the company with new business advantages according to the statement, and the enterprise work-management company raised its full-year 2017 guidance accordingly.
Upland raised its expected revenue, recurring revenue, and adjusted EBITDA ranges. The company now expects its total revenue to be in the range of $87.0 to $91.0 million. Upland expects its recurring revenue to be in the range of $76.0 to $79.0 million, a 19% increase year-over-year. The new adjusted EBITDA range is expected to be between $26.0 and $29.0 million.
"We are today raising our long-term Adjusted EBITDA margin target to 40% to reflect the increased customer loyalty and operating efficiency we are seeing with UplandOne and as we scale," McDonald said.
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