Helix TCS (HLIX) Acquires Amercanex International Exchange
Peter Sayles |
Helix TCS (OTC: HLIX) acquired Amercanex International Exchange on February 6th.
Amercanex provides updates on the cannabis market. It’s a real time exchange. Their “technology platforms monitor all transactions for tax and compliance purposes, helping bridge the gap between cannabis participants and government regulators”
The deal is equity based. With some cash incentives based on Amercanex revenue milestones.
Amercanex shareholders will receive $15 million in Helix stock. And another potential $5 million based on revenue incentives over the next two years.
There are a couple things to note here.
For starters, investors didn’t seem to mind the news of the dilution.
Helix rose 3% on the news on just 12,000 shares exchanging hands – an insignificant amount.
Helix is using acquisitions as a path for growth. Its main acquisition was BioTrack THC this past March (2018). Revenues have grown by 180+% since the acquisition closed.
The Amercanex should help fuel revenue growth. After all, 25% of the acquisition is incentivized based on revenue goals.
Helix should be able to integrate Amercanex into its BioTrack TCS and Cannabase pretty easily.
You see, city and state governments are signing up and using BioTrack’s software as a “seed-to-sale” tracking platform. It has 9 government contracts across 31 states. And also operates in Jamaica, Australia, Canada, and Puerto Rico.
Amercanex is SEC/CFTC compliant. And is being used across the country as a top rated exchange. This acquisition just bolsters Helix’s moat and value proposition for inking government contracts.
Another thing to note is Helix’s gross margins.
Helix is solid gross margins of 40%. Acquiring Amercanex – software, employees, expenses – might bring gross margins down a bit.
It was one of our concerns in our original writeup (click here for our original writeup).
But we’re confident Helix’s CEO Zachary Venegas will streamline operations to maintain margins.