HighCom Acquisition and Revenue Momentum

XTEK Ltd (XTE.ASX, XTEK) has entered into a binding agreement to acquire U.S. company HighCom,  a provider of body armour and personal protective equipment.  XTEK have also completed an oversubscribed A$2.7m placement and have announced a A$1.0m Share Purchase Plan (SPP). There are two key benefits of this acquisition that we look at in this update.

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In addition to the HighCom acquisition, XTEK also released an investor presentation which provided revenue guidance for FY18/19 of between A$30m (contracted) revenue to a high case of A$35m (high case forecast) revenue6 (note, this is ex-HighCom acquisition).  

This is an increase from previous forecasts in the October 2018 presentation for this same period which stood at A$20m (contracted) revenues to a high case of A$26m (high case forecast) revenue. In terms of contracted revenue, this represents a 50% increase within an 9-month period for the same FY18/19 period, which suggests strong revenue momentum during the period.