A new acquisition by Quisitive Technology Solutions (Quisitive Technology Solutions Stock Quote, Chart, News, Analysts, Financials TSXV:QUIS) gets the thumbs up from Beacon Securities analyst Gabriel Leung, who updated clients on the company in a Monday report. Leung reiterated his \u201cSpeculative Buy\u201d rating and raised his target price from C$1.10 to C$1.70, which at press time represented a projected 12-month return of 13 per cent. Headquartered in Dallas, Texas, Quisitive is a Microsoft solutions provider for enterprise organizations operating in the Microsoft cloud. Formed in 2017, Quisitive went public via reverse takeover in 2018. The stock had an impressive 2020, where it went from C$0.25 to C$1.09 per share by December 31. So far in 2021, QUIS is up a further 47 per cent. Quisitive on Monday announced a definitive agreement to acquire Chicago-based Mazik Global, an independent software vendor with Microsoft CRM, cloud and ERP solutions for companies in healthcare, education and manufacturing. The deal, which is expected to close around April 1, will see Quisitive pay $7 million in cash and issuing about 6.3 million shares for a total consideration of about $14.4 million. The deal also includes a three-year earnout with a base maximum of $6 million payable in cash plus an additional incentive amount of $2 million based on exceeding recurring revenue growth targets, payable in cash or shares at Quisitive\u2019s option. The earnout calls for Mazik revenues to have grown by 110 per cent over the three years with recurring revenues at 250 per cent. (All figures in US dollars except where noted otherwise.) Quisitive said in a press release that Mazik has a valuable set of IP including its health cloud platform MazikCare, which has a set of \u201crobust healthcare-ready business solutions that enhance end-to-end business operations for medical teams and patients,\u201d according to the release. MazikCare also has a VaccineFlow solution which up to date has seen over one million vaccinations administered over the platform and was described in the press release as a tremendous growth opportunity for Mazik and Quisitive. \u201cThe acquisition of Mazik Global provides Quisitive with an incremental set of software and application services that further strengthens our three-cloud solutions value proposition,\u201d said Quisitive CEO Mike Reinhart in the press release. \u201cMazik possesses relevant and robust IP solutions within the healthcare and public sector that will strengthen our industry expertise and help us grow our recurring revenues,\u201d Mazik said. By Leung\u2019s estimates, the deal implies a takeout valuation of about 1.4x sales and about 6.9x EBITDA, based on Mazik\u2019s trailing twelve months (ending December) of $10.4 million in revenues (with about 25 per cent recurring revenues) and $2.1 million in EBITDA (at 20 per cent EBITDA margins). Leung said, \u201cOverall, we view this as a positive transaction, which should be immediately accretive and funded with cash on hand (recall the company recently received a strategic investment from FAX Capital of C$20 million ). We estimate pro-forma cash now stands at ~$21.3 million against debt of ~$18.3 million.\u201d On Quisitive, Leung estimates full 2020 revenue and EBITDA to come in at $49.4 million and $8.0 million, respectively, and 2021 revenue and EBITDA of $65.0 million and $11.3 million, respectively. Leung\u2019s C$1.70 target is based on his sum-of-parts valuation. \u201cBeyond M&A, we believe the next main catalysts will be additional milestone updates on LedgerPay, including a definitive agreement on bank sponsorship, along with Visa\/Mastercard certification,\u201d Leung wrote. Quisitive also announced on Monday the closing of its C$20-million strategic investment by FAX Capital, which has purchased 16 million QUIS shares at a price of C$1.25 per share. First announced on March 8, Quisitive said it will use the net proceeds from the financing for strategic acquisition opportunities and general corporate purposes, with Reinhart saying in the press release that the financing \u201cputs Quisitive on the path of accelerated expansion.\u201d Earlier this month, Quisitive announced it had achieved Microsoft Co-sell Ready status for its LedgerPay solution, a designation which activates Microsoft\u2019s sales team to assist in commercialization. LedgerPay combines payment processing and payment intelligence and allows businesses to transform credit or debit purchase data into customer loyalty for merchants. Reinhart said accessing Microsoft\u2019s sales team will help Quisitive tap into the retail and financial services markets and represents a milestone for QUIS. \u201cAchieving the \u2018Co-sell Ready\u2019 status reflects our elite relationship with Microsoft and significantly augments our sales efforts, as we are able to leverage their resources and execute a joint go-to-market initiative,\u201d said Reinhart in a March 3 press release. \u201cThe beauty of our partnership is that both parties benefit from collaborations like this. In the same way we are able to gain access to Microsoft\u2019s sales team, we also provide a tremendous value-add for Microsoft, as the only cloud-based payment processing and payments intelligence platform in their portfolio,\u201d Reinhart said.