As this transaction is funded by an Institutional placement and dilution of existing FDV shareholdings, its value hinges on whether Infocasas is more or less undervalued than the rest of the portfolio.
Although not a large transaction, I like the look of Infocasas (see post of a few months ago) and thought it was a decent bit of business based on the following:
(A) Infocasas is now EBITDA-positive and has had the steadiest revenue growth of any of the FDV businesses; (B) 5.0x revenue is a reasonable multiple for a capital-light online business at its stage of development; and (C) it reduces (a little bit) the heavy reliance on Zameen. Pre-deal Zameen contributed 52% of September 2019 portfolio revenue and Infocasas 11%. With the rejigged holding percentages, the revenue contributions would have been Zameen 48% and Infocasas 16%.
FDV Price at posting:
80.5¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)