Software company LiveTiles (ASX: LVT) says its June 2018 acquisition of the Hyperfish artificial intelligence platform has exceeded expectations.

The company announced that annualised revenue growth for Hyperfish has climbed to $2.1m from $400k at the time of purchase, a gain of 425 per cent.

As a result of the strong performance, LiveTiles will complete the earn-out phase of the acquisition in full.

Shares in LiveTiles dipped 2.2 per cent in afternoon trade to 44.5 cents, up from 31 cents at the start of the year.

Integrated intelligence

LiveTiles says the Hyperfish platform provides leading “employee profile and directory management software”, leveraging the use of artificial intelligence.

The acquisition has allowed LiveTiles to utilise Hyperfish in connection with its other product offerings, in turn helping to add value for clients.

“The market demand for Hyperfish’s capabilities has exceeded expectations, and has driven several Intelligent Workplace deals combining all LiveTiles products, which in turn is driving up our average contract value (ACV),” LiveTiles said.

LiveTiles said that on an extrapolated basis, it expects Hyperfish to be cashflow positive by December this year.

With Hyperfish having now met and exceeded its performance metrics, LiveTiles will now complete the earn-out phase of the transaction.

The company will issue 7.9m shares to the vendors of Hyperfish in July. That will bring the total consideration to 22.3m LiveTiles shares, valuing Hyperfish at a multiple of 4.4x enterprise value to annualised recurring revenue (ARR).

The 7.9m shares as part of the final earn-out transaction are subject to an escrow period of 12 months.

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