Frugl (ASX:FGL) expands into full-service consultancy with Prodigy9 acquisition

Frugl (ASX:FGL) has made a bold step forward with its acquisition of Thailand-based software engineering consultancy Prodigy9.

Known for its strong presence in data analytics, this move marks Frugl’s expansion into the end-to-end consultancy space, offering a broader suite of services in data analytics and software engineering.

The acquisition is a game-changer for Frugl, transitioning it from a technology provider to a comprehensive consultancy firm.

Prodigy9, which specialises in developing data analytics platforms predominantly for retail clients, brings significant new capabilities to Frugl’s portfolio.

This includes expertise in cybersecurity, AI applications, web and app development, and SaaS development, expanding Frugl’s reach beyond the retail sector.

Key Takeaways:

• Frugl’s acquisition of Prodigy9 positions the company to provide complete solutions in data analytics and software engineering.
• Prodigy9’s client base includes some of Thailand’s largest companies in sectors like insurance, consumer electronics, and fin-tech.
• This acquisition is expected to lead to significant cost synergies, contributing to Frugl’s profitability targets.

The acquisition terms are attractive.

Prodigy9 will be acquired through 10 million Frugl shares with performance-based incentives tied to Prodigy9’s revenue and profitability achievements over the next few financial years.

Prodigy9 reported FY2023 revenues of THB 29.3 million (approximately AUD 1.3 million), though it operated at a net loss for the year.

However, Frugl is confident that through resource sharing and immediate cost synergies, Prodigy9 will contribute positively to its bottom line soon.

Ken Tovich, CEO of Frugl, highlighted the strategic importance of this acquisition:

“Immediately, Frugl will acquire an established business with proven data analytics capabilities working with clients across a broad range of sectors as their trusted technology partner,” said Tovich. “Looking forward, integrating the service offerings of InFocus Analytics, Trienpont, and Prodigy9 together will enable Frugl to offer a true end-to-end consulting service encompassing both data analytics technologies and the engineering capabilities to scope and deliver entire software solutions for clients”​.

The acquisition is expected to be completed following shareholder approval in November 2024, marking the next chapter in Frugl’s growth strategy.

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