At first blush this seems like AFY has played a blinder. They get rid of a 30% share overhang that is valued at close to zero by the market in the TCH share price and the transactional revenue stream they would pay to TCH in perpetuity. Meanwhile, opportunistic in the sense that the MD and founding executive recently passed away, the company is looking for a CEO and company is in between major projects post AFY integration and so soon after a bad 1H trading result with a significant growth premium built into the AFY price. Despite the large premium to current TCH price, it is still way below what this company was trading at prior to recent wobbles in revenue growth but with a strong growth pipeline still to come.
Im still unsure what synergies or growth kick TCH gets out merging with a consumer finance business- seems a bit like a Board to me who has given up. Im also unsure as to my investment proposition going forward, to me the AFY holding was a bit of a free carry risk mitigant to TCH going into a second wave of new growth projects, particularly in Europe. Now Im unsure how to value this combined entity given AFY is a finance lender and TCH is a technology platform.
First impressions disappointing, but still to review in detail.
