Shares of aerial imagery and location data company Nearmap [ASX:NEA] surged on Monday to their highest level since November last year after a non-binding takeover offer for $2.10 cash per share.
The non-binding indicative proposal came from software investing firm Thoma Bravo.
Nearmap also took the opportunity to provide a quick FY22 update, stating Group ACV is set to come in at the top of its guided range.
While NEA shares are up 20% year to date, the stock is down 10% over the past 12 months.
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Nearmap catches a $1.1 billion bid
Nearmap received a non-binding takeover proposal from Thoma Bravo, a software investment firm with US$115 billion in assets under management.
Nearmap has granted Thoma exclusivity for seven days commencing today, saying Thoma’s due diligence is ‘now at an advanced stage and encompasses all financial and other valuation-critical due diligence supporting the $2.10 Proposal.’
Thoma offered to acquire 100% of NEA shares for $2.10 cash per share, implying a $1.06 billion valuation for Nearmap.
Nearmap shares closed at $1.51 apiece on Friday.
Thoma’s offer represents an 83% premium to Nearmap’s closing price of $1.15 on 5 July 2022, which was the day prior to NEA first receiving the proposal.
As part of the exclusivity agreement entered by the parties to perform due diligence, Nearmap agreed to an expense reimbursement fee capped at US$3 million if during the exclusivity period or within six months after the expiry of the exclusivity period:
- Nearmap doesn’t enter a transaction agreement with Thoma Bravo, and
- Nearmap enters into a transaction agreement with a different party.
Nearmap assured its shareholders that it would ‘only enter into a definitive agreement with Thoma Bravo if it believes a transaction is in the best interests of shareholders’.
An agreement will be subject to the usual terms and conditions, Foreign Investment Review Board approval, and relevant authorities in the US (the Hart-Scott-Rodino Act).
Thoma Bravo has been eyeing Nearmap’s sector for a while, having unsuccessfully bid for Nearmap’s rival, Eagleview, a few years ago.
Nearmap gives a brief FY22 trading update
Tacked onto the takeover announcement, Nearmap gave a brief update on its financial performance to 30 June 2022.
NEA expects the Group ACV portfolio to be $159.9 million at constant currency, at the top of its initial FY22 guided range of $150–160 million.
The Group ACV portfolio was $128.2 million in FY21.
Nearmap expects its cash balance to be $93.7 million, having used $20 million of capital raise proceeds during the financial year, having guided for $30 million.
However, this $20 million capital raise utilisation figure excluded litigation costs.
In its most recent half-yearly, Nearmap reported ending the period with cash and cash equivalents of $109.8 million.
NEA’s full FY22 results will be released later this week.
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Regards,
Kiryll Prakapenka,
For Money Morning
