HeartCore Enterprises, Inc. (“HeartCore” or the “Company”), a leading software development company, has completed the previously announced agreement to acquire a 51% majority stake in privately-held Sigmaways, Inc. (“Sigmaways”), a software engineering service provider delivering IT solutions.
With a number of blue-chip, U.S. based clients and affiliates, Sigmaways augments HeartCore’s existing customer base, and also adds incremental software engineering capabilities such as Big Data & Cloud services, API Management, and Microservices architecture, and more. Moreover, the acquisition expands HeartCore’s operational footprint into the U.S. and will reduce its development costs across all existing operating verticals.
Acquisition Summary and Rationale
- Sigmaways increased revenue by approximately 48% to $12.9 million (unaudited) in FY 2022, compared to $8.7 million (unaudited) in FY 2021
- Expands HeartCore’s operational footprint into the U.S. and adds significant revenue to its top line
- Provides complementary cross-sell and upsell opportunities for both companies
- Reduces production costs, transitioning from outsourcing to leveraging Sigmaways’ team
- Shared corporate philosophy of putting the customers first
“The majority stake acquisition of Sigmaways marks an inflection point in HeartCore’s history,” said Company CEO Sumitaka Yamamoto. “We intend to capitalize on the myriad of synergies between our two organizations, as the number of opportunities to cross-sell and upsell our software solutions among our joint robust slate of customers remain vast. More specifically, Sigmaways’ high-quality of work and sticky business model of multi-year contracts to develop their clients’ IT has resulted in deals with existing, highly regarded customers such as MasterCard, Live Nation, Ikea, and more; we remain keen on selling our Content Management System and Digital Transformation software to their clients. All in all, I am very pleased with the acquisition of a healthy and growing company that has increased year-over-year revenue by approximately 48% to $12.9 million and look forward to the value this will generate for both organizations.”
In connection with closing of the acquisition, the Company agreed to acquire from Prakash Sadasivam, founder of Sigmaways, 229,500 shares or 51% of Sigmaways outstanding stock. In exchange, HeartCore issued to Mr. Sadasivam, 2,000,000 shares of its common stock, $1,000,000 in cash, and a common stock purchase warrant to acquire 1,900,000 shares of the Company’s common stock. Additionally, two persons designated by HeartCore have been named to Sigmaways’ Board of Directors while Mr. Sadasivam has been added to HeartCore’s Board of Directors and now serves as the Company’s Chief Strategy Officer.
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