MergeCo to Issue 45 Million Shares, Deliver $4M Cost Synergies Post-Merger

A New Chapter in AI on the ASX

Prophecy International Holdings Limited (ASX – PRO) and Complexica Pty Ltd have unveiled plans for a transformational merger that will create a leading ASX-listed artificial intelligence pure play, to be known as MergeCo. The merger combines Prophecy’s established enterprise software and SaaS solutions with Complexica’s advanced AI decision optimisation technology, aiming to deliver a comprehensive end-to-end data-to-decision platform for customers worldwide.

The deal involves Prophecy acquiring 100% of Complexica by issuing approximately 45.3 million new fully paid ordinary shares and 2.2 million zero exercise price options to Complexica shareholders and option holders. Post-merger, Complexica shareholders will own 38% of MergeCo, with Prophecy shareholders retaining 62%. The transaction is expected to complete around 20 October 2025, pending shareholder approval and other customary conditions.

Strategic Synergies and Growth Prospects

The merger is underpinned by a compelling strategic rationale. It refreshes Prophecy’s market positioning by leveraging Complexica’s AI pedigree, creating a unified AI-first brand. The combined entity will offer a strong complementary product suite, integrating Prophecy’s mature data infrastructure and cybersecurity expertise with Complexica’s proprietary AI platform, Decision Cloud, powered by the AI engine Larry.

This integration unlocks reciprocal product synergies, such as AI-augmented analytics, enhanced visualisations, and predictive compliance monitoring, which are expected to accelerate organic growth through cross-selling opportunities and international expansion. Prophecy’s established global sales infrastructure, with significant presence in North America, ANZ, and Europe, will support Complexica’s products in new markets.

Financial Impact and Operational Efficiencies

Financially, MergeCo anticipates approximately $4 million in annual cost synergies, driven by cloud hosting rationalisation, personnel optimisation, and corporate cost consolidation. These savings will be redeployed to fuel growth initiatives. The merger also includes a proposed on-market share buyback of up to $1.5 million, representing about 3% of the merged company’s shares, signaling confidence in the combined entity’s value creation potential.

The leadership team will be co-headed by Bradley Thomas (Prophecy) and Jonathan Drake (Complexica), supported by a board comprising experienced directors from both companies, including plans to appoint additional independent directors with enterprise software expertise. The merger also includes escrow arrangements to align shareholder interests and support stability post-completion.

Risks and Next Steps

While the merger promises significant strategic and financial benefits, it carries typical risks such as completion uncertainty, integration challenges, and competitive pressures in the fast-evolving AI and enterprise software markets. Due diligence limitations and reliance on warranty and indemnity insurance also present potential exposures. The Prophecy board unanimously recommends shareholders vote in favour of the merger at the upcoming extraordinary general meeting scheduled for 23 September 2025.

Looking ahead, MergeCo aims to leverage its enhanced scale and AI capabilities to pursue disciplined inorganic growth through future acquisitions, targeting vertical expansion, capability accretion, and geographic reach. The market will be watching closely as the merger progresses toward completion and integration unfolds.