13th Sept 2011. Following its 23rd June 23 cents a share A$19.3m bid, rejected by QMASTOR’s board, US-based commodity trading software company Triple Point Technology has made official its improved 31 cents a share $26.2m offer for industrial software developer QMASTOR (ASX:QML).
The new offer is a 94% premium to the QML closing share price on June 22, the day prior to the announcement of Triple Point’s takeover offer.
In August, QMASTOR announced record revenue for FY2011 of $12.8m ($7.3M FY2010) up 75% on the FY2010 result. Forecast revenue for FY12 was advised of $20m. The company posted a record EBITDA result for FY2011 of $2.778m ($0.41m FY2010) up 584% on the previous period. The revised offer represents a FY11 EBITDA multiple of 9.43 times.
A majority of QMASTOR’s board (3 of 4 board members), including the managing director, have recommended the offer to shareholders and indicated they would accept, noting the increased offer is within the valuation range of the independent expert included in QML’s target statement dated 25 July 201. Director John Wasik has dissented, on the basis the offer is inadequate, and has advised he does not intend to accept the revised offer for shares he controls. An independent valuation commissioned by QMASTOR from BDO Corporate Finance in response to the June bid indicated a price of 31-38 cents as fair, including a control premium of 30%.
Triple Point indicated it planned to increase its bid price in late August, after its initial offer met with resistance from directors. This led to a signing of a Takeover Bid Implementation Agreement allowing for a 3-week due diligence and the increase in the offer. Commenting on the Increased Offer, Triple Point’s Chief Executive Officer, Mr Peter Armstrong said,
“Our interaction with the management of QML to date has been encouraging and it is clear that the Company has been supported by a number of long standing shareholders. Triple Point believes that the increased offer not only will allow shareholders to realise fair value for their investment, but also, allow the business and its employees to progress, particularly given the increased pressure of investment in technology that customers demand.”
Triple Point intends to fund the offer through cash reserves. As at the date of the Bidder’s Statement, Triple Point Technology had existing cash
reserves of approximately $49 million, which are available to Triple Point when required in connection with the Offer.
QMASTOR shareholders will have until October 7 to accept the offer. The deal is contingent on receiving 90% acceptances.
Triple Point Technology has appointed PKF Corporate Advisory as financial advisers and Norton Rose as legal advisers.
QMASTOR has appointed Interfinancial as financial advisers and Minter Ellison as legal advisers.
About QMASTOR Limited
QMASTOR is a market leader in the provision of specialist management information systems and services to the global mining, port, power generation and bulk commodity industries. The company listed on the Australian Securities Exchange (ASX: QML) in December 2001 and has office locations and distribution partners throughout Australia, North America, Europe, South Africa and Asia.
On 6 October 2009, QML issued 12,701,816 shares under its share purchase plan at $0.32 each raising a total of $4.1m.
On 25 November 2010, QML issued 22,800,049 additional shares in the Company at $0.21 as part of a one-for-three rights issue. QML aimed to raise $3.9 million and the rights issue ultimately closed oversubscribed with applications received for $4.8m
QMASTOR specialises in bulk commodity supply chain and quality management solutions with a growing portfolio of software products and related services.
Its systems are currently contracted to manage over 500 million tonnes of bulk commodity movements per annum in coal, iron ore, nickel, bauxite and copper/gold for clients including BHP Billiton, Rio Tinto, Vale, Anglo American, Xstrata, Peabody and others.
Since 1987, QMASTOR systems have provided innovative solutions to empower clients to improve their operations and maximise profit through the efficient use of resources across the supply chain.
About Triple Point Technology
Triple Point Technology and its subsidiaries provide comprehensive integrated commodities trading software solutions to major oil companies, investment banks,
utilities, shipping operators and global trading organizations worldwide. Triple Point Technology generates revenues from licensing the rights to use its software products. Triple Point Technology also generates revenues from the maintenance and customization of licensed software and from consulting, implementation and training
services provided to customers.
Triple Point Technology has established a special purpose company, Triple Point Technology (Australia) Pty Ltd through which to acquire QMASTOR.