Business Context and Reporting Period
This Form 6-K filing by Globant S.A. is dated January 18, 2019, covering the month of January 2019. The report discloses the execution of a Share Purchase Agreement to acquire Avanxo (Bermuda) Limited, a cloud consulting and implementation firm with operations in Brazil, Mexico, Colombia, Peru, Argentina, and the United States.
Key Financial Metrics and Transaction Details
The filing details the financial structure of the acquisition rather than the Company's periodic operating results.
- Total Consideration: USD 48,557,247 (assuming a debt-free and cash-free balance sheet).
- Closing Payment: Up to USD 40,939,104 payable upon closing.
- Earn-Out Payments: USD 7,618,143 payable in two installments (end of 2019 and 2020), subject to revenue, gross margin, and operating margin targets.
- Payment Method: Primarily cash on hand and borrowings under the Amended and Restated Credit Agreement dated November 1, 2018.
- Equity Component: At Globant's option, up to USD 865,323 of the closing payment and up to 25% of Earn-Out payments may be settled via common shares (subject to a 12-month lock-up).
The filing text does not provide specific values for Globant's current revenue, profit, cash flow, margins, or total debt levels outside of the context of this transaction.
Material Changes and Outlook
The primary material change is the pending acquisition of Avanxo, expected to close in February 2019. The transaction is subject to customary conditions, including non-objection from the Colombian antitrust authority (Superintendencia de Industria y Comercio). If the transaction does not close by April 1, 2019, the agreement will automatically terminate unless extended.
Management commentary indicates the acquisition aligns with the Company's growth strategy in cloud consulting. The filing includes standard forward-looking statements cautioning that actual results may differ due to risks identified in the most recent Form 20-F.
Investor Verification Checklist
- Verify the closing date of the Avanxo acquisition (expected February 2019).
- Confirm the final purchase price after working capital adjustments and uncollected receivables deductions.
- Monitor whether Globant exercises its option to issue common shares for a portion of the consideration.
- Track the regulatory approval status from the Colombian antitrust authority.
- Review the Company's credit facility capacity to ensure sufficient liquidity for the cash portion of the deal.