Venture Advisory Monthly Wrap - July 2017

Key Takeaways

Hansen Technologies acquired Enoro Holding for A$96m, a market leading provider of Customer Information Systems and Meter Data Management systems for the Nordic energy market

Sun Hung Kai & Co acquired a 5.3% stake in Ardent Leisure Group

NextDC launched an unconditional offer to acquire the remaining ~81.4% stake that it does not already own in Asia Pacific Data Centre Group for A$175m in cash

Warburg Pincus invested US$100m in CleanMax Solar to fund growth opportunities outside India and to improve product offerings

A consortium led by Alibaba invested US$700m in Ofo, the world’s largest bike sharing company to internationalize the business

Telco and ICT Monthly WrapTelco and ICT Best and Worst Monthly performers

Bulletproof Group was up 22% in July after seeing its share price fall over 60% throughout the year

The 5 best and worst performers for the month of July 2017 were as follows:

Key Company Announcements

Spark New Zealand (4 Jul 17) completed the acquisition of Ubiquity, a marketing automation provider to help in growth strategy of Spark’s big data and analytics software business Qrious

Vocus Group (7 Jul 17) received a preliminary, indicative and non-binding proposal from Kohlberg Kravis Roberts & Co. L.P. to acquire 100% of the shares at A$3.50 per share. It also received a proposal from Affinity Equity Partners and its affiliates to acquire all the shares of the company at A$3.5 per share on 11 July 2017

Bulletproof Group (7 Jul 17) revised its estimates with FY17 revenue to be around A$49m from A$48.5m. Underlying EBITDA was revised to A$2.4m from A$3m and EBIT loss of A$2.0m from a loss of A$1.5m, due to slower-than-expected turnaround improvements and forecasting corrections

Vocus Group (14 Jul 17) concluded its negotiated buyback, repurchasing 1.2m shares for A$6.6m

Speedcast International (24 Jul17) acquired UltiSat, for US$65m plus an earn-out consideration of up to US$35m. UltiSat is a satellite services provider to the Military, Government, IGO and NGO sectors, the acquisition will help Speedcast serve the Government vertical. UltiSat's CEO Mohammed G. Abutaleb will lead the newly-formed Government division at Speedcast. The transaction has EV/FY17EBITDA of 7x (pre-synergies), reducing to approximately 5.5x post-synergies

Inabox Group (27 Jul 17) expects FY17 unaudited revenue of A$90m (up 2.3% YoY) and EBITDA of A$6m (up 9.1% YoY)

Vocus Group (7 Jul 17) announced appointment of David Wiadrowski as the Non-Executive Director of the company. David has over 20 years of board level exposure across the public, commercial and not for profit sectors with experience in the Technology, Telecommunication, Entertainment, Media and FMCG industries

Melbourne IT (20 Jul 17) announced appointment of Andrew Macpherson and Simon Martin to the board, while Tom Kiing will step down from the board at the end of September 2017

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading telco and ICT stocks at the end of the month is as follows:

Telecom stocks were trading on an average forward EV / EBITDA of 10.0x and a median forward EV / EBITDA of 8.0x

Media Monthly WrapMedia Best and Worst monthly performers

Seven West Media traded up 13% for the month, while Fairfax lost 10% to its share price as it failed to attract an offer from two perspective private equity buyers

The 5 best and worst performers for the month of July 2017 were as follows:

Key Company Announcements

Vocus Group (7 Jul 17) announced appointment of David Wiadrowski as the Non-Executive Director of the company. David has over 20 years of board level exposure across the public, commercial and not for profit sectors with experience in the Technology, Telecommunication, Entertainment, Media and FMCG industries

Melbourne IT (20 Jul 17) announced appointment of Andrew Macpherson and Simon Martin to the board, while Tom Kiing will step down from the board at the end of September 2017

Fairfax (3 Jul 17) announced that the company did not receive a binding offer from either he TPG Consortium or Hellman & Friedman. Fairfax affirmed it plans to continue with the separation of its Domain business

Ten Network Holdings (3 Jul 17) announced appointment of PPB Advisory as receivers and managers of Ten Network Holdings Limited. The receivers and managers further appointed Moelis & Co to act as the independent advisor for the sale or recapitalisation of the business and assets of Network Ten. The company also secured a A$30m funding package so that it can keep operating while receivers and managers look to sell or recapitalize the business

iCar Asia (13 Jul 17) reported net cash position of A$18.9m, with cash collections of A$2.5m (up 35% YoY). Strong performance in 2Q17 quarter was driven by strong increases in paid accounts (up 28% YoY), overall listings growth (up 22% YoY) and total leads across the company (up 8% YoY)

APN Outdoor Group (17 Jul 17) signed an agreement with XTD Ltd., a digital transit technology company, wherein APN Outdoor will act as a content sales agency for XTD's digital screen networks in the Melbourne and Brisbane metro rail networks

Village Roadshow (17 Jul 17) invested A$1m in Linius Technologies; proceeds of the funds will be used to accelerate its commercial activities around its patented product, the Linius Video Virtualization Engine

Macquarie Media (31 Jul 17) signed a binding share purchase agreement with Stingray Digital International Limited to sell its subsidiary Satellite Music Australia for A$5.9m

Nine Entertainment (25 Jul 17) announced appointment of Karen Madden as Group Marketing Director

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading media stocks at the end of the month is as follows:

Media stocks were trading on an average forward EV / EBITDA of 8.9x and a median forward EV / EBITDA of 7.7x

Technology Monthly WrapTechnology Best and Worst monthly performers

Online retailer Kogan.com was up 53% following the release of positive trading results and information that it is enhancing its product offering via a move into insurance

The 5 best and worst performers for the month of July 2017 were as follows:

Key company announcements

Hansen Technologies (3 Jul 17) announced acquisition of Enoro Holdings, a market leading provider of Customer Information Systems and Meter Data Management systems for the Nordic energy market for A$96m (EV/EBITDA multiple of 10.6x)

Technology One (4 Jul 17) reported 1H17 revenue of A$113.9m (up 12.8% YoY) and net profit of A$8.1m (up 9.5% YoY). It expects FY17 profit growth to be in the range of 10-15% with substantial base of committed annual licence fees

Wisetech Global (5 Jul 17) announced acquisition of Bysoft, the largest provider of customs and logistics compliance solutions to the logistics industry across Brazil for A$11.8m (EV/Revenue of 3.8x).

Trade Me Group(11 Jul 17) signed a sale and purchase agreement to acquire Limelight Software, a cloud-based dealer management platform for motor vehicle dealers for an undisclosed amount

Bravura Solutions (12 Jul 17) - Scottish Friendly Assurance Society Limited, successfully deployed Bravura’s Sonata administration platform for its life and pensions business, which included migration of 47.6m client transactions

Data#3 (24 Jul 17) estimates its FY17 NPBT of A$22.4m (up 15% YoY) and NPAT of A$15.2m (up 10% YoY) driven by growth in services and cloud-based businesses. The full-year audited results will be announced on 23 August 2017

Data#3 (24 Jul 17) exercised its option to acquire an additional stake of 15.8% in Discovery Technology, increasing the total holding to 77.4% for an additional investment of A$0.7m

Kogan.com (25 Jul 17) signed a three-year agreement with Hollard Insurance Company to market its insurance products under Kogan Insurance

SMS Management & Technology (27 Jul 17) reported unaudited FY17 revenue of A$304.5m and EBITDA of A$10.9m. It will release its audited financial results on 23 August 2017

Aconex (24 Jul 17) announced appointment of Gabriele Famous as Chief Marketing Officer. She will be responsible for global marketing strategy and operations, including product and online marketing, demand generation, and communications

OFX (31 Jul 17) announced appointment of Selena Verth as Chief Financial Officer effective from 1 November 2017, following the resignation of Mark Ledsham

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading technology stocks at the end of the month is as follows:

Technology stocks were trading on an average forward EV / EBITDA of 13.1x and a median forward EV / EBITDA of 12.2x

Reference stocks

Our reference portfolio is as follows:

Telecom Stocks:

amaysim Australia Ltd. (AYS-AU), Bulletproof Group Limited (BPF-AU), Chorus Limited (CNU-NZ), Inabox Group Ltd. (IAB-AU), Macquarie Telecom Group Limited (MAQ-AU), MNF Group Limited (MNF-AU), Nextdc Limited (NXT-AU), SpeedCast International Ltd (SDA-AU), Superloop Ltd. (SLC-AU), Spark New Zealand Limited (SPK-NZ), Telstra Corporation Limited (TLS-AU), TPG Telecom Limited (TPM-AU), Vocus Group Limited (VOC-AU), Singapore Telecommunications Limited (Z74-SG)

Media Stocks:

APN Outdoor Group Ltd. (APO-AU), Carsales.Com Limited (CAR-AU), Domain Holdings Australia Ltd. (DHG-AU), Asia Pacific Digital Limited (DIG-AU), Event Hospitality & Entertainment Ltd. (EVT-AU), Fairfax Media Limited (FXJ-AU), HT&E Ltd (HT1-AU), iCar Asia Ltd. (ICQ-AU), Macquarie Media Limited (MRN-AU), Nine Entertainment Co. Holdings Pty Ltd. (NEC-AU), News Corporation Shs B Chess Depository Interests repr 1 Sh (NWS-AU), oOh media Ltd (OML-AU), Pacific Star Network Limited (PNW-AU), Prime Media Group Limited (PRT-AU), REA Group Ltd (REA-AU), Seek Limited (SEK-AU), SKY Network Television Limited (SKT-AU), Seven West Media Limited (SWM-AU), Southern Cross Media Group Limited (SXL-AU), Trade Me Group Limited (TME-NZ), Village Roadshow Limited (VRL-AU), WPP AUNZ Limited (WPP-AU)

Tech Stocks:

3P Learning Ltd. (3PL-AU), Aconex Ltd (ACX-AU), Altiumc (ALU-AU), Afterpay Touch Group Ltd. (APT-AU), Appen Ltd. (APX-AU), Big Un Limited (BIG-AU), Bravura Solutions Limited (BVS-AU), Catapult Group International Ltd. (CAT-AU), Citadel Group Ltd. (CGL-AU), Class Ltd. (CL1-AU), Crowd Mobile Limited (CM8-AU), Computershare Limited (CPU-AU), Data#3 Limited. (DTL-AU), DWS Limited (DWS-AU), ELMO Software Ltd. (ELO-AU), GetSwift Ltd. (GSW-AU), Gentrack Group Ltd (GTK-NZ), Hansen Technologies Limited (HSN-AU), Infomedia Ltd (IFM-AU), IRESS Limited (IRE-AU), Integrated Research Limited (IRI-AU), iSentia Group Limited (ISD-AU), Kogan.com Ltd. (KGN-AU), Link Administration Holdings Ltd. (LNK-AU), Impelus Ltd (MBE-AU), Melbourne IT Ltd (MLB-AU), Megaport Ltd. (MP1-AU), MYOB Group Ltd. (MYO-AU), Nearmap Ltd. (NEA-AU), Netwealth Group Ltd. (NWL-AU), Nextdc Limited (NXT-AU), OFX Group Ltd. (OFX-AU), Pro Medicus Limited (PME-AU), Pushpay Holdings Ltd (PPH-NZ), Reckon Limited (RKN-AU), Technology One Limited (TNE-AU), Webjet Limited (WEB-AU), Wisetech Global Ltd. (WTC-AU), Xero Limited (XRO-NZ), Zip Co Ltd. (ZML-AU)

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