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Shopify headquarters in Ottawa on Sept. 1, 2020.Adrian Wyld/The Canadian Press

A Victoria holding company looking to cash in on Shopify Inc.’s surging growth by acquiring firms that provide applications to clients of the e-commerce giant has made its largest purchase yet.

WeCommerce Holdings Ltd. said Friday it would buy Pte Ltd. for up to US$110-million. Singapore-based is a five-year-old subscription software platform that Shopify merchants use to implement and manage customer reviews and loyalty programs. WeCommerce said in a release that generated revenues at an annualized rate of US$11-million last December, double the level a year earlier.

WeCommerce is paying US$85-million upfront, including US$75-million in cash and US$10-million in stock. It will pay US$25-million more next year in either cash or stock, at the buyer’s discretion, if generates US$10-million in revenue this year. It is funding the acquisition with cash on hand and a US$77-million credit facility led by JP Morgan Chase Bank.

WeCommerce is led by chief executive officer Chris Sparling and chairman Andrew Wilkinson. They hatched the idea for WeCommerce in 2019, when the venture fund they run, Tiny Capital, bought back an online design firm they had started in 2009 and sold in 2013, and which offers Shopify merchants a range of store themes, apps and services.

Their rationale was that they were bullish on the long-term prospects of Shopify – which provides online tools merchants use to manage their stores and operations – as well as purveyors of thousands of digital services sold through its app store to merchants. Those apps, which provide a range of add-on services not included in the core Shopify platform, collectively generated US$6.9-billion in revenues in 2019, more than four times Shopify’s own revenues. “We think that Shopify is going to continue to grow, and we’re making a very large bet there,” Mr. Wilkinson told The Globe and Mail in January

WeCommerce, which raised $60-million when it went public on the TSX Venture Exchange through a reverse takeover last fall, has a simple strategy: to buy businesses that serve Shopify merchants, preferably paying cash, leave their management and operations unchanged, and count on future growth as Shopify’s system volumes and overall e-commerce sales increase. Third-quarter revenues were $15-million. “We don’t do any integration or synergy,” Mr. Wilkinson said two months ago. “We’ve never had any luck synergizing businesses before. It’s not something we do.”

WeCommerce stock rose 3.6 per cent on Friday after news of the deal, giving the company a market capitalization of about $750-million.

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