Local dairy supply-chain management software company Contec Group International was bought for an undisclosed price last November.
The debt-funded investment, set on commercial terms by Jade’s UK-based shareholder Skipton Group, is expected to increase annual revenue by 20% to 25%.
Contec developed the Madcap platform used by six of the 10 largest global dairy processors, including Nestle, Land O’Lakes and Saputo.
The software helps processors digitise their milk supply networks, set tanker routes, test milk quality and pay farmers.
Jade is folding the business within the company in a growth phase, setting a target to double revenue over the next three to five years and lift staffing to more than 300 employees.
Jade Group chief executive Justin Mercer said sales forecasts completed during due diligence before buying the business were on target for this year in Jade’s first direct foray in the "agri-space".
He said Jade was won over by the software’s growth value both in-house and in diversified revenue streams.
"We see further upside. I can’t talk about specific deals under negotiation, but what I can say is we are confident we are going to grow significantly in the Americas, north and south, and Europe this year."
He said the Madcap team merged into a business unit was looking at where it could advance the existing product, and innovate and invest in its underlying technology.
"Also, in due course we will keep open-minded about further acquisitions."
Mr Mercer said the goal was to double the size of Jade within three to five years in revenue growth, increase the customer base for its software platform and generate more products and markets.
"That’s our north star from a commercial perspective and we see that growth coming through [financial crime detecting software] ThirdEye, Madcap and helping the Jade entrepreneurs scale their products."
The targets are set for existing business — including Madcap but not future acquisitions — with the bottom line closer to trebling.
Jade’s annual results for the financial year ending December are due out over the next month. The 2024 year resulted in a 1% decline in sales to $45.3 million and a 10% lift in the bottom line from $2.6m to $2.9m.
Mr Mercer said the latest results would show revenue growth as well as investment from the bottom line into some of the initiatives to accelerate product growth.
"The Contec acquisition and integration of the Madcap team and product immediately adds about 20% top line revenue to Jade and it’s a significant profit contributor and really strong growth potential. We are really bullish on the upside for both Madcap and also what it looks for the company."
Madcap has just branched from its 57-strong dairying customer core to Nestle’s coffee farmers in Thailand with Jade eyeing up further commodities.
The Contec deal is its first major investment since the mid to late 2000s.
Mr Mercer said Skipton’s refreshed management had given the company the commercial lead to grow domestically and internationally and execute some acquisitions.
Jade’s ThirdEye software is growing at 20% to 40% year-on-year for the past five years with 170 customers including banks, other lenders and wealth managers.
The software detects sophisticated online financial crime, fraud and money washing in digital transactions and payments for companies.
Mr Mercer said there was room to grow ThirdEye further and reseller channels were starting to be established in Australia and the UK on top of direct sales.
Synergies between ThirdEye and Madcap markets were being evaluated as well as new markets.
Contec chief executive Desley Haas was retained to lead Madcap and report under Mr Mercer.
Mr Mercer travelled with her to meet dairy processors and future customers at the International Dairy Foods Association forum in California in January. Customers rated Madcap highly and strong demand for quality protein in the US showed the extent of the growth potential, he said.
He said a real strength was its ability to handle complexities in diverse markets including different languages, regulations, payment incentives on products and the transportation of milk.
Jade’s product and system range can be found in 550 cities in 60 countries across six continents.
tim.cronshaw@alliedmedia.co.nz`
