• Strategic Acquisition: XPON acquires Alpha Digital, a leading Australian digital marketing business
• Immediate Value Accretion: Alpha Digital generated $4.6M revenue and $0.7M EBITDA in the last financial year
• Accelerating AI transformation: Deploy XPON's AI capabilities to accelerate the AI transformation of Alpha Digital

XPON Technologies Group Limited (ASX: XPN) has announced the acquisition of 100% of the shares in Alpha Digital Design Consultants (Aust) Pty Ltd, a leading Australian digital marketing business, with settlement expected to occur in May 2025 (subject to standard settlement conditions). The acquisition is a strategic move that aligns with XPON's growth strategy, enhancing its position in the high-growth AI marketing sector. The key highlights of the transaction include:- Strategic Acquisition: XPON acquires Alpha Digital, a long-term channel partner, to strengthen its position in the digital marketing space.- Immediate Value Accretion: Alpha Digital generated $4.6M revenue and $0.7M EBITDA (unaudited) in the last financial year, and brings approximately $1M cash at bank, enabling XPON to fast-track the journey to positive cash flow and EBITDA profitability.- Value-aligned Deal Structure: The $1.72M upfront consideration comprises $180,000 in XPON shares and a $1.54M vendor loan at 8% p.a. over 3 years. An additional $891,000 in performance-based earn-in is linked to EBITDA growth targets in FY26 and FY27.- Accelerating AI transformation: XPON will deploy its leading AI capabilities to accelerate the AI transformation of Alpha Digital, enabling it to offer a wider range of competitive AI solutions and become more valuable and profitable.- Smart acquisition of customers in key verticals: Alpha Digital provides a strong foothold of strategic blue-chip customers in key vertical industries, including Target, K-Mart, QUT, and Stone & Wood, with 87% of revenue from recurring contracts.- Revenue synergies to maximize customer value and growth: Combining XPON's existing solutions with Alpha Digital's new products and offerings will provide customers a wider range of integrated solutions, simplifying procurement and accelerating ARPU growth through cross-sell opportunities.

The acquisition is expected to be immediately accretive, adding $4 million in recurring revenue and fast-tracking XPON's profitability, with an expected delivery of over $0.8 million EBITDA in FY26.

The acquisition launches XPON's acquisition strategy, with a future M&A approach targeting the tech-enabled digital marketing sector and built on three pillars: accelerating AI transformation, smart acquisition of customers in key verticals, and maximizing customer value and growth. This transaction establishes a repeatable model for future value-accretive acquisitions.