PayGroup Limited (ASX:PYG) entered into an agreement to acquire Integrated Workforce Solutions Pty Ltd for AUD 15.3 million on March 31, 2021. Pursuant to the terms, initial consideration of $12.75 million is payable partially in cash of AUD 8.4 million and the balance in PayGroup shares of AUD 4.35 million and a performance earn-out of AUD 2.55 million is payable upon the achievement of key performance metrics in FY22 and FY23. The earn out consideration is payable in shares of PayGroup. All shares issued in consideration for Integrated Workforce Solutions will be subject to a 24-month escrow period from the date of issue. On April 13, 2021, PayGroup Limited entered into an agreement to acquire Integrated Workforce Solutions Pty Ltd for AUD 17.3 million. The first tranche of initial consideration amounting to AUD 7.65 million will be paid on completion of the acquisition as to AUD 4.97 million will be paid in cash and AUD 2.68 million will be paid through issuance of shares. The second tranche of the initial consideration amounting to AUD 7.35 million will be paid in two payments in or around September 2021 and December 2021, with around 65% of the second tranche consideration being paid in cash in or around September 2021 and an amount equal to 35% of the second tranche will be paid by the issue of shares in or around December 2021. The earn out consideration will be capped at AUD 1.5 million for each of two years for financial year 2022 and 2023. The earnout consideration will be paid in shares. 3.9 million shares will be issued as second tranche share consideration and 4.56 million shares will be paid as deferred consideration. The cash consideration will be financed from the proceeds of capital raising of AUD 15 million. Integrated Workforce Solutions reported revenues of AUD 4.8 million for the year ending June 30, 2020. A meeting of shareholders of PayGroup Limited will be held on May 31, 2021 to approve the issuance of consideration shares. The employees of Integrated Workforce Solution will remain employed by PayGroup Limited. The transaction is subject to shareholders of PayGroup Limited approving the shares issuance, PayGroup Limited raising atleast AUD 9.75 million pursuant to placement, certain key employees of IWS entering into new employment contracts, no material breach of any warranties and any required regulatory approvals being obtained. If any condition precedent is not satisfied (or waived) by May 31, 2021, any party to the agreement may elect to terminate it. The Vesparum Capital is acting as financial advisor to PayGroup. As of April 21, 2021, PayGroup secured binding commitments from new and existing investors to raise AUD 15 million and announced a share purchase plan for eligible shareholders to raise approximately AUD 1 million. As of May 13, 2021, issue of Securities, issue of Tranche 2 Placement Shares has been approved. In addition to the IWS acquisition, PayGroup intends to use the proceeds to fund, investment in additional sales capabilities; investment in automation and artificial intelligence to enhance margins; and working capital and transaction costs. PayGroup Limited (ASX:PYG) completed the acquisition of Integrated Workforce Solutions Pty Ltd on May 18, 2021.