Ann: Trading Halt, page-22

PE backed trade player OEConnection stalks Infomedia
May 22, 2022 – 4.11pm

Infomedia makes about $50 million a year selling software to the global automotive industry. Simon Dawsonnone

It comes as Infomedia was quietly talking to a couple of parties, before a third, TA Associates, blew the whistle on the M&A situation with a $1.70 a share indicative bid.

TA Associates wrapped up Infomedia’s biggest shareholder Viburnum Funds to what appears to be a joint bid, triggering disclosure of a Co-operation and Process Arrangement and subsequent indicative bid for the company.

There’s a data room open, although it is understood to have only limited information.

Split decision
Analysts have been taking guesses at who else could be circling Infomedia, knowing that a motivated trade buyer will often outbid a PE suitor, such as TA Associates.

E&P analysts reckon a PE suitor could pay $1.80 to $1.90 a share for Infomedia and still get a 20 per cent to 25 per cent IRR, assuming an exit in the 2025 financial year.

Bell Potter analysts called TA Associates’ $1.70 a share headline price “reasonable”.

The suitors turned up at a low time for Infomedia, at least as far as its share price was concerned. E&P said the stock was trading at multiples not seen in more than four years.

The shares closed at $1.65 on Friday, valuing the group at $620 million on a market capitalisation and 26.4-times forward earnings per share. It also implied 3.7-times forward revenue on an EV-to-sales basis.

Credit Suisse and Ashurst are advising Infomedia. Goldman Sachs and Allens are in TA Associates’ camp.