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Venture Advisory Monthly Wrap - May 2018

Monthly Markets Wrap and Company Updates - May 2018
Key Takeaways

Australia's M&A dealmakers expect activity levels in the mid-market sector to surge this year, buoyed by an influx in foreign investment, particularly from private equity players. The primary focus would be on technology, media and telecommunications (TMT) as incumbents chase growth and deal with the impact of ever-changing technology

Weak conditions for organic growth, all-time low interest rates and ever-changing technology are expected to be the key drivers of mid-market M&As in Australia in 2018

According to the budget for 2018–19, the Australian government aims to maximise the benefits of a tech-focused economy by increasing spending in science, medical research, technology and skills. It plans to invest A$2.4bn over the next 12 years to boost the country’s public technology infrastructure

Online retail giant Amazon plans to block Australian consumers from its global sites to counter new laws forcing the company to collect the good and services tax on transactions. Under the new GST collection laws, effective from 1 July, online retailers such as Amazon would be forced to apply 10.0% GST on goods purchased on international sites and shipped to Australia. Amazon Global Store intends to allow Australian customers to shop on for over 4 million items that were previously accessible only on

Australia is edging closer to enabling 5G mobile broadband services, with the Australian Communications and Media Authority releasing draft spectrum licensing instruments in the 3,575–3,700 MHz band (3.6 GHz band). ACMA is preparing to auction spectrum in the 3.6 GHz band later this year

Telco Monthly Wrap
Telco Best and Worst monthly performers

The 5 best and worst performers for the month of May 2018 were as follows:


Key Company Announcements

Bulletproof Group Ltd (25 May) announced that the securities of the Company will be suspended from quotation at the close of trading on 25 May, 2018, in accordance with Listing Rule 17.2, following lodgement of the Federal Court of Australia orders with the Australian Securities and Investments Commission approving the scheme of arrangement by which Klikon Group Holdings will acquire issued shares of the Company

Chorus Ltd (24 May) announced several changes to its executive team as Nick Woodward, General Manager, Product Sales and Marketing is leaving the business on 27 July; Ed Hyde is to be appointed as Chief Customer Officer

Chorus Ltd (10 May) announced the appointment of Elaine Campbell as General Counsel and company Secretary from mid-August 2018. Elaine is an experienced senior executive and joining from AMP where she was the General Counsel for New Zealand. Immediately prior to this, Elaine spent four years with the Financial Markets Authority as Director of Compliance. She brings more than 20 years’ experience working in legal roles in New Zealand, the United States and the United Kingdom

Macquarie Telecom Group Ltd (25 May) announced that it will not be extending its 11.0 cent takeover offer of Bulletproof Group dated 7 December, 2017. Macquarie Telecom’s takeover offer consequently expired on 30 April, 2018. Bulletproof’s shareholders have received a materially higher offer of 15.2 cents per share from Klikon Group Holdings Pty Limited ("AC3") under the scheme implementation deed agreed with Bulletproof as announced on 15 February, 2018

Netcom Wireless (22 May) announced that it has joined the Ericsson IoT Accelerator platform to facilitate the adoption of Massive IoT. NetComm Wireless' industrial grade 4G LTE Machine-to-Machine (M2M) devices integrate Lightweight M2M (LwM2M) and now interoperate with the Ericsson IoT platform to streamline device onboarding worldwide

NEXTDC Ltd (21 May) successfully completed its share purchase plan (the “SPP”) by raising $80.4mn. A total of 11,801,714 new fully paid ordinary shares (New Shares) will be issued to successful SPP applicants at $6.8 per share, being equivalent to the Placement Price under the institutional placement advised to the ASX on 18 April 2018. NEXTDC has accepted all valid subscriptions under the SPP from eligible shareholders in full, with no scale back

NEXTDC Ltd (14 May) announced that in relation to its legal proceedings with Asia Pacific Data Centre Group (APDC), has been informed by APDC that the reason why they are seeking valuer access to the Properties in contention is to minimise the risk of them not complying with the Corporations Act. APDC also expressed its concern that ASIC has expressly reserved the right to make further enquiries. With the intention of resolving this dispute, NEXTDC has now offered APDC access to the Properties such that an independent valuer appointed by APDC can value the Properties for the purposes of APDC complying with its regulatory obligations and any further enquiries that may be raised by ASIC

Singapore Telecommunications Ltd (17 May) announced its financial year ended 31 March 2018 results, recording net profit of SGD5.5bn, including divestment gains from NetLink Trust. Operating revenue was up 5.0% to SGD17.5bn. An increase in new mobile and ­national broadband network customers has helped Optus lift its full-year profit by 2.8% to $817mn. Singtel's fiscal fourth-quarter net profit fell 19.0% to SGD781mn from SGD963mn a year earlier, due to weaker associate results, adverse currency movements and lower National Broadband Network revenue

Speedcast International Ltd (17 May) announced that Michael Berk has resigned as a Non-Executive Director of the company

Speedcast International Ltd (17 May) announced the results of its AGM 2018. Grant Ferguson and Michael Malone were re-elected as Director and Caroline Van Scheltinga was elected as Director. The Company also provided guidance on FY18 financials, expressing comfort at the consensus forecast of c.US$155mn. Management also noted its expectations of stronger growth, a slight EBITDA margin compression due to the acquisition of UltiSat and the NBN project set-up, as a well as a CAPEX increase with new projects across different divisions

Speedcast International Ltd (16 May) announced the completion of its US$425mn Senior Secured Credit Facility and its new 5 year US$100mn Senior Secured Revolving Credit Facility

Speedcast International Ltd (7 May) announced the pricing of its US$425mn Senior Secured Credit Facility in the US institutional market with participation by key global financial institutions. The Term Loan has a term of 7 years and a coupon of LIBOR +2.5%. In addition, the company has arranged a new 5 year US$100mn Senior Secured Revolving Credit Facility

Spark New Zealand Ltd (25 May) announced that it will be accelerating its Quantum performance improvement programme to realise financial benefits earlier than previously envisaged. The company also updated FY18 financials accordingly as some Quantum changes were brought forward from FY19, which has resulted in additional FY18 implementation costs between $25.0-$30.0mn

Spark New Zealand Ltd (8 May) announced that it will be the first to bring Google’s highly regarded Android One programme to New Zealand shores through Nokia’s newest additions of Android smartphones. The first to launch is the new Nokia 6.1 which is available from 8 May, followed by the Nokia 7 plus from May 22

Spark New Zealand Ltd (4 May) announced that it has signed a conditional agreement to sell 50.0% of the shares in its subsidiary Connect 8 to electricity distribution company Electra Group. The transaction will also see Connect 8  take full ownership of Electra subsidiary Sky Communications, a telecommunications contractor providing design, build and supply of wireless networks for all of New Zealand’s major mobile network owners

Spirit Telecom (21 May) confirms that the Company has issued 327 fully paid ordinary shares at an issue price of 19.7 cents per share, pursuant to the exercise of listed options

Telstra Corporation Ltd (15 May) announced that its partnership with Swift Network Group Limited, a leading Telecommunications and content service provider, has delivered a 3-year deal with St Barbara Limited to upgrade St Barbara’s digital entertainment and connectivity services at its 329-man camp in Leonara

Telstra Corporation Ltd (14 May) provided an update on trading for FY18 based on its year-to-date results to April 2018 where income is expected around the middle of the $27.6 to $29.5bn range, EBITDA at the bottom end of the $10.1 to $10.6bn range, whilst free cash flow is expected at the top end or moderately above the $4.2 to $4.7bn range

Telstra Corporation Ltd (10 May) announced that experienced American telecommunications executive Roy H. Chestnutt will join the Board as non-executive Director

Vita Group Ltd. (2 May) announced the acquisition of Artisan Cosmetic and Rejuvenation Clinic. The acquisition expands Vita’s non-invasive medical aesthetics portfolio to seven clinics. Artisan was acquired for A$1.5mn in cash

Vocus Group Limited (21 May) announced the appointment of Kevin Russell as its Group Managing Director and CEO, with a commencement date of 28 May 2018, Mark Callander, CEO of Vocus New Zealand, will also join the Vocus Board as an Executive Director

Forward EV / EBITDA Multiples Chart

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


Telecom stocks were trading on an average forward EV / EBITDA of 8.2x and a median forward EV / EBITDA of 7.8x

Media Monthly Wrap

The 5 best and worst performers for the month of May 2018 were as follows:


Key Company Announcements

APN Outdoor Group Ltd (28 May) announced that underlying EBITDA for the 12 months ending 31 December 2018 is expected to be in the range of $92.0mn to $96.0mn

APN Outdoor Group Ltd (22 May) submitted an indicative and non-binding proposal to acquire a 100% of HT&E's outdoor advertising unit, Adshel in Australia and New Zealand at an enterprise value of $500mn

Domain Holdings (1 May) announced that in the first 17 weeks of H2 FY18 (25 December 2017 to 22 April 2018) the Company recorded digital revenue growth of 21.0% and total revenue growth of 13.0%

Asia Pacific Data Centre Group (14 May) announced the appointment of Vishant Narayan as CEO

Fairfax Media Ltd (2 May) announced that in the first 17 weeks of H2 FY18 (25 December 2017 to 22 April 2018) the Company saw a decline of ~1.0% in the Group’s revenue in comparison to the last year. The Company also reported its growth across its segments: Domain’s revenue grew at 13.0%, Australian Metro Media is down c.0.2%, Australian Community Media is down c.0.9%, Stuff (NZ Media) is down c.0.8%, whilst Macquarie Media is up .c0.4% (6.0% excluding disposals)

HT&E (22 May) announced that APN Outdoor Group Ltd had submitted a bid to buy HT&E's outdoor advertising unit, Adshel, for an enterprise value of A$500mn

HT&E (14 May) announced that Anne Templeman –Jones has resigned as a Director. Templeman-Jones was appointed to the HT&E Board in June 2013, served as Chair of the Audit and Risk Committee for over four years and was a member of the Remuneration Committee

HT&E (7 May) announced that Robert Kaye was to be elected as a Director, Peter Cosgrove to be re-elected as a director and Peter Cullinane to be retired from the Board of the Company

HT&E (7 May) announced that Group revenue in 2017 was $472mn, which was up by 3.0% compared to last year and Group EBITDA was $118mn, which was up by 1.0% compared to last year

iCar Asia Ltd (25 May) announced that Lucas Elliott was to be re-elected as a Director and Richard Kuo and Peter Everingham were to be elected as Director

Macquarie Media Ltd (25 May) announced the appointment of Karen Birner as Interim Chief Financial Officer and acting Company Secretary

Nine Entertainment Co Holdings Ltd (1 May) announced that Nine Metro’s FTA revenues were trading ~5.0% ahead of the same time last year, core digital revenues were ~21.0% ahead for the same period and the Group EBITDA was between $250-$260mn

News Corporation (11 May) released FY18 third quarter earnings with revenues of $2.1bn, a 6.0% increase compared to $1.9bn in the prior year, net loss was $1.1bn compared to nil in the prior year, total segment EBITDA was $182mn compared to $215mn in the prior year, and also that the Foxtel and FOX Sports Australia transaction completed in April 2018

oOh!media Ltd (22 May) secured the exclusive rights to internal and external advertising assets at Newcastle Airport, a key addition to the national oOh! Fly portfolio. Newcastle Airport is New South Wales’ second busiest airport and the gateway to Australia’s largest regional economy. The new addition to oOh!’s Fly portfolio will enable oOh! to reach the 1.3 million passengers that pass through the airport annually with dynamic and world-class media solutions

oOh!media Ltd (21 May) confirmed that it has submitted a revised offer for the Adshel business only for the new offer to be rejected. oOh!media Ltd submitted a revised non-binding and indicative cash offer to HT&E in relation to Adshel, valuing the division at $470mn

oOh!media Ltd (17 May) addressed the financial Highlights of FY17 in AGM 2018 indicating: an increase in revenue by 13.1% to $380mn from solid organic sales growth, an increase in underlying EBITDA by 22.5% to $90.1mn, an increase in underlying NPATA by 22.5% to $47.2mn, and expectations to deliver CY18 EBITDA between $94.0mn to $99.0mn

oOh!media Ltd (1 May) announced that it will upgrade its Study network with the further digitisation of its inventory at two leading universities, after securing long-term contract renewals with both the University of Sydney (USYD) and the University of Western Australia (UWA)

Pacific Star Network Ltd (8 May) issued an announcement advising that Commonwealth Bank of Australia CBA had approved a further short-term extension of the company’s debt facility through to 31 July 2018

Prime Media Group Ltd (2 May) released a trading update stating total advertising revenue for financial year-to-date to 30 April 2018 , inclusive of Commonwealth Games broadcast, has declined 8.9% on the prior year. Meanwhile, local direct revenue for the quarter to 31 March has decreased by 11.7% compared to same quarter last year. While local direct revenues improved in April, there has been a decline of 5.5% compared to the same period last year for the 2018 calendar year-to-date. The revenue declines reflect the continued difficult trading conditions, particularly in regional Victoria and the Australian Capital Territory. The company expects its core net profit after tax for the year to June 2018 to be between $24.3mn and $25.3mn

REA Group Ltd (30 May) announced that the ACCC has confirmed that it will not intervene in the acquisition by Pty Ltd of Hometrack Australia Pty Ltd (“Hometrack Australia”), as announced to the market on 1 May 2018

REA Group Ltd (11 May) released its Q3 FY18 financial information including highlights from its core operations for the nine months ending 31 March 2018, which shows a revenue growth of 20.0% to $592mn and EBITDA growth of 21.0% to $345mn

REA Group Ltd (9 May) announced the appointment of Nick Dowling as Non-Executive Director

REA Group Ltd (1 May) announced that Pty Ltd has entered into an agreement to acquire 100%  Hometrack Australia, provider of property data services to the financial sector, for $130mn subject to ACCC approval

SEEK Ltd (3 May) updated its FY18 guidance confirming revenue growth in FY18 in the range of 20.0% to 25.0% and EBITDA growth in FY18 in the range of 14.0% to 15.0% in comparison to FY17. Reported NPAT in the range of A$225mn to A$230mn before deducting investments in early stage growth options of approximately A$25.0mn to A$30.0mn

Seven West Media Ltd (15 May) announced that Current Chief Operating Officer Maryna Fewster has been appointed as acting chief executive officer and Current General Manager – Circulation & Distribution. Adam Everett has been appointed as Chief Operating Officer

Seven West Media Ltd (11 May) announced that John Driscoll has stepped down from the position of CEO Seven West Media WA

WPP AUNZ (2 May) announced the FY17 financial highlights with EPS of 9.8 cents, up 3.1% from FY16, and Profit before Tax of $125mn, a 3.1% growth from FY16

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 11.2x and a median forward EV / EBITDA of 9.3x

Tech Monthly Wrap
Tech Best and Worst Monthly performers

The 5 best and worst performers for the month of May 2018 were as follows:


Key Company Announcements

3P Learning Ltd (28 May) announced that it was selling its 40.0% stake in Learnosity Holdings Limited to Battery Ventures for approximately AU$25.0mn. Learnosity Holdings Limited is an Ireland based SaaS company specialising in digital learning technology. Proceeds from the transaction will be used to repay debt and strengthen the Company’s balance sheet

Afterpay Touch Group (15 May) announced the launch of its buy-now-pay-later business in the U.S. market in May 2018 with Urban Outfitters, Inc., one of the largest portfolio of consumer lifestyle brands based in the U.S. Afterpay shares soared as much as 10.0% on the back of the ASX release

Appen Ltd (18 May) announced the FY17 results - revenue grew by 50.0%, from $111mn in FY16 to $167mn in FY17, underlying EBITDA margins improved, from 15.6% in FY16 to 16.9% in FY17, NPAT reached $19.7mn

Big Un Limited (29 May) announced the Resignation of CEO Richard Evertz and the appointment of Nicholas Jordan as Executive Chairman of BIG by the Board effective 28 May 2018

Big Un Limited (22 May) announced that Richard Evertz, the chief executive of Big Un Limited, has resigned after its main business unit, Big Review TV, was placed into voluntary suspension

Big Un Limited (22 May) informed stakeholders and the market that the Directors of Big Review TV Ltd (‘BRTV’), a wholly owned subsidiary of BIG, have placed BRTV into Voluntary Administration to restructure its business via a Deed of Company Arrangement and preserve value for Shareholders of Big Un Limited

Big Un Limited (8 May) advised that ASIC has made a determination under section 713(6) of the Corporations Act 2001 that BIG may not rely on section 713 of the Act (special prospectus content rules for continuously quoted securities ) until 2 May 2019. This has arisen due to BIG not lodging its 31 December 2017 half year report with ASIC by 15 March 2018

Data#3 Ltd (31 May) announced the opening of its new office in Perth

Data#3 Ltd (25 May) announced that Data#3 customers can now leverage Microsoft Azure Australia Central to provide premium data centre services

Data#3 Ltd (17 May) announced that it was going to be a  key sponsor of Myriad, an Australian tech innovation festival, in collaboration with its world-leading technology partner, Cisco

Data#3 Ltd (9 May) announced that it has won a LearningElite award for demonstrating exemplary workforce learning and development strategies

Data#3 Ltd (3 May) announced that it has been named as one of Australia’s Best Companies in the 2018 Employer of Choice Awards for the Human Resources Director (HRD) Magazine three years in a row

Gentrack Group Ltd (30 May) released its interim financial results, highlighting the continued profitable growth for the half year ended 31 March 2018 (‘H1 FY18’). The Company reported revenues of $52.0mn and EBITDA of $15.9mn, both up by 80.0% in comparison to the same period last year. Net profit after tax increased 50.0% to $8.4mn. The company also declared Interim Dividend of 5.0 cents per share

Hansen Technologies Ltd (30 May) announced the appointment of David Howell to the position of non-executive Director with effect from 24 May 2018

Hansen Technologies Ltd (2 May) announced the major new release of BannerCX 5.1. at the 42nd Annual CS Week in Tampa, Florida. This is a major release of Hansen’s market leading customer information system (CIS) solution for utilities and municipalities in North America

IRESS Ltd (3 May) released the results of AGM 2018 where Niki Beattie ,John Hayes and Geoff Tomlinson were re-elected as a Director and Julie Fahey elected as a Director

IRESS Ltd (3 May) highlighted the performance for full year FY17; group revenue was up by 10.0% from FY16 to $430mn. This included positive contribution to earnings from acquisitions of Financial Synergy in Australia and INET BFA in South Africa. Statutory Net profit was $59.8mn, up 1.0% on 2016. For FY18, management expected profit to be in range of 3.0% – 7.0% (on a constant 2017 currency basis). The company also announced that it expected a decline of segment profit in 1H18

iSentia Group Ltd (24 May) announced that Doug Snedden will become Executive Chairman effective immediately

Link Administration Holdings Ltd. (15 May) referred to its ASX disclosure on 10 May 2018 with respect to changes relating to the treatment of inactive superannuation accounts from 1 July. Following the Federal Budget announcements, the Company undertook an internal verification of accounts as at 30 April 2018 with a member balance of less than $6,000 and where there has been no contribution for 13 months or longer, the account balance will be transferred to Australian Taxation Office (ATO) and the account closed. If the Sweep Date under the proposed legislation was 30 April 2018, the estimated unmitigated full year revenue impact to the Company would be approximately $55.0mn.

Link Administration Holdings Ltd. (15 May) announced the appointment of Paul Khoury as a Chief Executive Director of Link Fund Solutions in Australia

Melbourne IT Ltd. (29 May) announced that it was changing its name to Arq Group as part of a restructure to better reflect its acquisition streak over the past four years and diversification into enterprise services

Melbourne IT Ltd. (28 May) announced the results of AGM 2018 where Naseema Sparks was re-elected as a director and Andrew Macpherson and Simon Matin were elected as Directors. Management highlighted that the performance has continued to grow the top line at a CAGR of 18.0%, increasing from $103mn in 2013 to $198mn in FY17. Underlying EBITDA has grown at a CAGR of 61.0% from $5.8mn to $38.6mn, and underlying EPS has grown at a CAGR of 23.0% from 7.5c to 17.0c. The Company has also delivered 181% total shareholder return over the past 3 years and entered the ASX300 in March 2018

MYOB Group Ltd. (31 May) advised that it will no longer pursue the acquisition of Reckon’s Accountant Group Assets and will proceed with its planned investment strategy to drive future growth. Without the acquisition, revenue growth in FY18 is expected to be in the 8.0% - 10.0% range, whilst underlying EBITDA margins are expected to be in the 42.0% - 44.0% range. Revenue growth and EBITDA margins are expected to be higher in 2H than 1H.

MYOB Group Ltd. (31 May) announced its collaboration with BPAY to add a new payment option to its Invoice Payments Solution for Australian small businesses

MYOB Group Ltd. (15 May) announced that it will be a major sponsor of Shark Tank

MYOB Group Ltd. (2 May) announced the re-election of Andrew Stevens as a Director of MYOB

MYOB Group Ltd. (2 May) announced in its AGM that the Company delivered strong growth and solid returns year on year to its shareholders. In FY17, revenue rose to $416mn, up 12.0% on a year on year basis, underlying EBITA was $190mn, an increase of 13.0% and NPATA also increased by 10.0%, reaching $102mn for FY17. The company also noted that if the Reckon acquisition proceeds, then revenue growth are expected to be in the 14.0% -16.0% range, EBITA margins will be down in the range of 41.0% - 43.0%

OFX Group Ltd. (31 May) announced the resignation of Naomi Dolmatoff as an additional Company Secretary

OFX Group Ltd. (22 May) announced the results of FY18 with Net Operating Income (NOI) up 4.6% to $110mn, EBITDA up 7.5% to $29.8mn and an NPAT down 4.5% to $18.7mn due to a higher effective tax rate. Final dividend payable was 3.0 cents per share fully franked for the six months ended 31 March 2018. The balance sheet remained strong with no debt and cash held for its own use of $47.3mn, up $14.8mn on FY17

OFX Group Ltd. (22 May) introduced the new OFX Global Currency Account designed to simplify cash flow management for online sellers trading on international marketplaces. With the Global Currency Account, eCommerce merchants can manage multiple currencies - in Euros, British Pounds, US Dollars, Hong Kong Dollars, Australian Dollars and Canadian Dollars - all in one convenient place, saving money on exchange rates, and, freeing up time

Pushpay Holdings Ltd. (17 May) announced its FY18 results with total revenue more than doubling to $70.2mn, total operating expenses and net loss decreasing by 38.0% and 41.0% respectively. EBITDA improved by 17.0% from a $22.4mn loss to a $18.6mn loss, operating revenue increased by 99.0%, and receipts from customer increased by 89.0% from $20.6mn to $38.8mn

Pro Medicus Ltd.(1 May) announced that it has signed a five-year agreement with I-MED Radiology Network (Australia’s largest diagnostic imaging provider), that will see I-MED standardise on Visage RIS across all of its practices. As part of this agreement, I-MED will transition its Regional Imaging (RIL) and Queensland practices to Visage RIS over the next 12 months

Reckon Ltd (31 May) announced the termination of the $180mn acquisition of Reckon business by MYOB Group. MYOB has scrapped a planned purchase of Reckon's accounting practice management software business as the regulatory process had taken longer than expected. Further potential delays had created uncertainty in the business with the potential to impact on its trading

Reckon Ltd (23 May) announced the re-election of Greg Wilkinson as a Director

Technology One Limited (22 May) announced half year results ending March 2018 highlighting that the Company was on track to deliver profit growth of between 10.0% to 15.0% over the full year. The Company reported NPBT of $10.4mn, up 1.0%, revenue of $120mn, up by 6.0%, and total expenses of $110mn, up 6.0%

Technology One Limited (21 May) Moreton Bay Regional Council has validated TechnologyOne’s OneCouncil strategy, building on an existing 20-year partnership to embrace its full enterprise Software as a Service (SaaS) solution. The eight-year, multi-million-dollar deal includes the addition of the vendor’s Property & Rating, Enterprise Content Management and Human Resource & Planning products, to round out the OneCouncil solution and replace Council’s legacy, on-premise solutions

Technology One Limited (17 May) launched 2018A, its evolving enterprise Software as a service (SaaS) solution designed for Government, Education and Asset incentive industries

Wisetech Global Ltd (30 May) announced the acquisition of SaaS Transportation, a specialist US transport management solutions provider for Less Than Truckload (LTL) shipping

Wisetech Global Ltd (17 May) announced the acquisition of Ulukom, a leading logistics and customs solutions provider in Turkey. Headquartered in Istanbul, Ulukom offered a range of logistics, freight forwarding and warehouse solutions and their customers included MSC, Maersk, CMA-CGM, APL, Çelebi Ground Handling, Arkas Line, ONE, Panalpina and CEVA Logistics, and many other logistics providers. The purchase cost comprises ~A$2.9mn upfront, with a multi-year earn-out potential of up to ~A$4.6mn related to integration, product development, customer conversion and revenue growth

Wisetech Global Ltd (1 May) updated the outlook for FY18 with revenue growth of 37.0% to 43.0% and range of $210mn to $220mn, subject to currency movements

Xero Limited (18 May) announced its launch of operations into a new market. Xero has launched in Canada and, in collaboration with Deloitte Private, is linking its accountant companies in the country to “ctrl” by Deloitte. The partnership will aim to facilitate small business adoption of digital solutions, with Xero reporting that only 9.0% of Canadian small businesses currently use cloud accounting software

Xero Limited (10 May) released FY18 annual results ending March 2018 with operating revenue up 38.0% in FY18 to NZ$407mn

zipMoney (31 May) teamed up with Super Retail Group (ASX:SUL), which will join the Zip interest free payments platform. Comprising iconic brands such as Rebel, Supercheap Auto, Rays, Macpac and BCF, Super Retail is one of Australia’s leading specialty retailers with more than 630 stores and a turnover in excess of $2.5bn. Notably, Super Retail is the largest retailer to join the Zip platform to date

Forward EV / EBITDA Multiples Chart

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


Technology stocks were trading on an average forward EV / EBITDA of 14.2x and a median forward EV / EBITDA of 12.9x

Reference stocks

Our reference portfolio is as follows:

Telecom Stocks:

5G Networks (5GN-AU), amaysim Australia Ltd. (AYS-AU), Bulletproof Group Limited (BPF-AU), Chorus Limited (CNU-NZ), Hutchison Australia (HTA-AU), Inabox Group Ltd. (IAB-AU), Macquarie Telecom Group Limited (MAQ-AU), Megaport (MP1-AU), MNF Group Limited (MNF-AU), Netcom Wireless (NTC-AU), Nextdc Limited (NXT-AU), Over the wire (OTW-AU), Singapore Telecommunications Limited (Z74-SG), Spark New Zealand Limited (SPK-NZ), SpeedCast International Ltd (SDA-AU), Spirit Telecom (ST1-AU), Superloop Ltd. (SLC-AU),  Telstra Corporation Limited (TLS-AU), TPG Telecom Limited (TPM-AU), Vita (VTG-AU), Vocus Group Limited (VOC-AU)

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), 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), Impelus Ltd (IMS-AU), Infomedia Ltd (IFM-AU), IRESS Limited (IRE-AU), Integrated Research Limited (IRI-AU), iSentia Group Limited (ISD-AU), Ltd. (KGN-AU), Link Administration Holdings Ltd. (LNK-AU), Melbourne IT Ltd (MLB-AU), MYOB Group Ltd. (MYO-AU), Nearmap Ltd. (NEA-AU), Netwealth Group Ltd. (NWL-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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