If payroll is based off payslips, then this acquisition shows that IWS gets a huge premium of $12.75 per payslip..... which is not correct.
5.1m in revenue / 400k payslips = $12.75 per pay slip.
Payroll is a lot more complex then a payslip, read what IWS does as a business and the full suite of their services.
Paygroup is not just a payslip business. Read about their other offerings they support businesses with, then look at the value of what IWS offers PYG as a collaboration to cross sell and increase their ARR.
You cannot value this business off its payslips, you have to look at its TOTAL contract value, or ARR as its a suite of offerings that make up the company Paygroup and its value offering.
Their contracts are for 3 years and they renew upon completion. Easier to forecast.
ADP in America has been able to increase their revenue each year for the past 70 years. This industry is easy to predict so long as you look at the ARR. PYG is not competing with ADP or other large multinationals. They are doing Asia Pacific which is currently growing extremely fast in a globalised world.
PYG Price at posting:
59.5¢ Sentiment: Buy Disclosure: Held
