SenSen Networks acquires Scancam, Australia’s leading provider of AI anti-theft solutions to fuel retailers

SenSen Networks Ltd (ASX:SNS) (OTCQB:SNNSF) has entered into a share purchase agreement for the acquisition of 100% of the issued share capital in Scancam Industries Pty Ltd, Australia’s leading provider of AI anti-theft solutions to fuel retailers. The acquisition provides SenSen with a strong foundation to grow into the retail industry as Scancam’s award-winning AI technology prevents drive-offs at service stations, thereby addressing a major problem for fuel retailers in Australia. SenSen will acquire 100% of the issued share capital of Scancam for: Upfront consideration: A$6.5 million (A$1 million cash plus A$5.5 million in ordinary shares in SenSen subject to shareholder approval); and Deferred consideration: Of up to a maximum of about A$4.1 million, should the audited ARR of the Scancam business reach A$3 million within a 24-month period post the completion date – payable in cash or ordinary shares in SenSen at the election of the SenSen Board. “Integrating Scancam technology” This acquisition follows the company’s acquisition of SNAP Networks Surveillance with SenSen integrating SNAP technology into its platform – SenDISA - to develop a ground-breaking new product line called SenTRACK which is the world’s first completely automated person-tracking solution across an entire surveillance network. The combination of Scancam technology to track vehicles of interest and SenTRACK to track people of interest is expected to deliver the world’s first AI data fusion solution to prevent theft in all retail environments, not just fuel retailers. SenSen chief executive officer Dr Subhash Challa said: “This is an important strategic acquisition for SenSen, a move that not only aligns to our ARR generating growth plans for FY22 and beyond, but also provides a strong foundation and impetus to move into the broader retail business vertical. “SenSen is looking forward to welcoming the Scancam team into our group and expanding revenue-earning offerings for Scancam’s high-quality customer base. “Further, by integrating Scancam technology into SenSen’s proprietary platform SenDISA, we can provide further value to new and existing retail customers.” “Increasing revenue growth” Although Scancam developed this solution to address a serious problem that is costing the fuel retail industry approximately A$59 million per annum across Australia alone, SenSen’s grand vision is to use this as a springboard to launch product enhancements and variants to solve broader retail theft problems. Retail crime in Australia is a A$9 billion problem, according to the National Retail Association (NRA) and globally is estimated to cost the industry about US$60 billion annually. SenSen is particularly excited about this large market and how solutions powered by the companies’ combined technologies could help offer a highly effective solution to prevent retail theft globally. Dr Challa said: “Our scalable digital AI architecture is a SaaS solution. “Our ingenuity provides new and existing customers with a zero-capex solution – removing what was a barrier to entry for some retailers – and solving a problem that was once thought technically impossible. “As we acquire more service stations across the country on our network, this will enhance margins for SenSen, further increasing revenue growth. “We are excited about the potential this integration holds to further accelerate annual recurring revenues whilst enhancing the margins of our solutions.” Acquisition supports growth strategy A key strategic driver for the acquisition is Scancam’s strong alignment with SenSen’s growth strategy by augmenting ARR from the adjacent industry verticals like fuel retail with a strong ARR growth profile. For FY21, Scancam unaudited EBITDA is break-even to moderate profitability with unaudited revenues of ~A$2.3 million, including Annual Recurring Revenue (ARR) of ~A$0.7 million, with a growing ARR profile. SenSen is confident the acquisition will provide strong growth opportunities within the Australian fuel retail sector that offers organic growth opportunities to expand the anti-fuel theft technology into ~6,500 service stations from the current ~250 service stations served by Scancam. The company has longstanding clients across Australia in Western Australia, Queensland, as well as a growing presence in NSW, Victoria and the Northern Territory. Scancam’s blue-chip fuel retail clients include BP, Ampol (Caltex), Chevron, Euro Garages (formerly Woolworths Caltex) as well as the Western Australia Police Force. SenSen shares have been as much as 10.4% higher intra-day to A$0.16.