Upland Software has acquired RightAnswers, an award-winning, cloud-based knowledge management system. Upland raised its 2017 guidance to reflect the RightAnswers acquisition and raised its long-term adjusted EBITDA margin target to 40%.

The purchase price paid for RightAnswers was $17.2 million in cash at closing, net of cash acquired, and a $2.5 million cash holdback payable in one year (a portion of which is available to satisfy indemnification claims). The foregoing excludes any potential future earn-out payments tied to additional performance-based goals. Upland expects the acquisition to generate annual revenue of approximately $9 million, subject to reductions for a deferred revenue discount as a result of GAAP purchase accounting.

According to a related 8-K filing, Austin-based Upland utilized the uncommitted accordion facility in its existing $90 million credit facility, dated May 14, 2015, to increase its term loan by $15 million.

“We are pleased to welcome RightAnswers and their valued customers and partners to Upland,” said Jack McDonald, chairman and CEO of Upland Software. “This strategic acquisition is a great product addition for current Upland customers looking to enhance their customer service, IT support and enterprise-wide collaboration capabilities.”

The amendment also provides for, among other things, the availability of U.S. and Canadian revolving loans up to the lesser of $10 million and 108.75% (subject to step-downs beginning June 30, 2017) of the borrowers’ recurring revenues on a trailing 12 month pro forma basis minus the outstanding balance of loans and letters of credit made under the credit agreement; an allowance for earn-outs in relation to permitted acquisitions and an increase in the maximum amount of purchase consideration payable in respect of all permitted acquisitions $75 million to $150 million.

Wells Fargo Bank was U.S. administrative agent, and Wells Fargo Capital Finance served as Canadian agent for the credit facility.