* TSN is currently undertaking a due diligence as part of an exclusive deal to acquire the remaining balance of 75% of TSI and at a price viewed as substantially below market value - A$47.7M. This will allow TSN to significantly increase shareholder communication and makes the business more appealing to large funds in Australia. The deal is expected to conclude between now and April 2017 (maximum).
* TSI India have 14,000 ATMs on the market and approximately 400 Bill Payment Kiosks. TSI India are in active discussions with potential new and existing clients to add an additional 20,000+ ATMs to their ATM business which would take their ATM figure to 34,000 plus. Refer to page 12 of recent Investor Presentation and the Operations Updated below dated 11/11/16. Note, this is just one business line. TSI have many more yet to fully tap into.
* In November 2013 the Indian ATM outsourcing company Prizm was acquired by Japanese giant Hitachi for approximately USD $250 million. At that time Prizm were operating and managing approximately 10,000 ATMs and 52,400 POS devices on the market in India.
That's almost double the rate of debit cards in circulation in India in just over two short years. Where are these debit cards predominantly used? At ATMs. The ATM deal landscape is very different today than what it was just a few short years ago. Not only are deals getting much bigger, they're materialising in record time.
* In October this year, one TSI India's peers listed on page 15 of the TSI Corporate Presentation dated the 08/08/16 below is 'Cardtronics Inc'. They announced that it would acquire Canadian ATM owner Direct Cash Payments (DC Payments) for $460M. DC Payments has approximately 25k ATMs.
Should TSN be successful with re-acquiring the remaining balance of 75% of TSI for A$$47.7M, that to me would be viewed as a signal of a significant re-rate. I'm estimating that TSI will hit over A$70m in revenue end of this FY just for their ATM business line alone. Now what valuation would we put on the business once all of the other business lines start reving up? What's that revenue figure going to look like then?
I've never been fooled by the short games. Bigger picture is all I have my attention on.
Tony
TSN Price at posting:
3.0¢ Sentiment: Buy Disclosure: Held
