MIAMI - ShiftPixy, Inc. (NASDAQ:PIXY), a staffing company specializing in the Gig Economy, has announced the definitive agreement to acquire a Northern California-based human capital provider. The acquisition, which is expected to close in the next quarter subject to standard closing conditions, aims to strengthen ShiftPixy's market presence and support its growth strategy.
The target company, which has not been named, boasts a significant footprint in the region with an annual revenue run rate of $58 million, EBITDA of $3.4 million, and a portfolio of 94 commercial accounts. It operates four regional offices and manages over 35,800 worksite employees.
ShiftPixy's CEO, Scott Absher, described the acquisition as a "pivotal moment" for the company, marking the first in a series of planned acquisitions. Absher emphasized the move as a strategic effort to leverage ShiftPixy's technology platform and capture rapid market share in the evolving work landscape.
The financial terms of the deal have not been disclosed, but upon completion, the acquired entity will function under the ShiftPixy brand. This move is consistent with ShiftPixy's business model, which combines traditional staffing services with innovative technology to connect businesses with shift-based employees.
ShiftPixy, with over 30 years of experience in workers’ compensation, employer administration, and compliance, has been a player in transforming employment in the Gig Economy through its mobile platform designed for workforce engagement and management.
This news is based on a press release statement from ShiftPixy, Inc.
InvestingPro Insights
ShiftPixy, Inc. (NASDAQ:PIXY) is in the spotlight with its recent announcement to acquire a significant human capital provider, aiming to bolster its presence in the Gig Economy. While the strategic move is intended to enhance the company's growth, a look at the real-time data and InvestingPro Tips reveals some challenges that the company faces.
InvestingPro Data shows a market capitalization of $18.14 million, indicating the company's relatively small size in the financial markets. This size could impact the company's ability to raise capital and invest in growth initiatives. The revenue for the last twelve months as of Q1 2024 stands at $15.64 million, with a concerning revenue decline of 51.63%. Moreover, the gross profit margin is notably low at 5.8%, pointing to potential inefficiencies in the company's operations.
Among the InvestingPro Tips, it is highlighted that ShiftPixy is quickly burning through cash and that analysts do not anticipate the company will be profitable this year. Additionally, the stock has experienced high price volatility and has taken a significant hit over the last week, month, and year, with a one-week price total return of -40.47% and a one-year price total return of -96.92%. These metrics suggest that investors should be cautious and consider the company's financial health and market performance.
For those interested in a deeper dive into ShiftPixy's financials and additional insights, there are more InvestingPro Tips available. Readers can explore these insights by visiting https://www.investing.com/pro/PIXY, and can take advantage of an exclusive offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 16 more InvestingPro Tips available, providing a comprehensive understanding of ShiftPixy's financial position and market dynamics.
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