Big technology players out of the US are showing an increasing amount of interest in the Australian market, with sources saying groups are currently here sizing up acquisition opportunities.
Making Australian tech businesses particularly attractive right now is the low dollar, currently around US64c.
The last time weakness appeared in the dollar, a run of deals unfolded among global groups.
Iress, Bravura and Qoria are being considered the most likely candidates for US buyers to swallow from the Australian Securities Exchange.
Qoria has already caught the eye of a suitor.
US-based private equity firm K1 Investment Management has secured options over 14.4 per cent of the business, and proposed a buyout on April 6 at 40c a share, valuing the group at $469m.
The company rejected the offer, but its share price, which is above the offer, suggests investors believe K1 or another suitor will return with a sweeter deal.
Qoria is the global leader in enterprise and consumer markets in child safety and wellbeing with respect to digital safety.
The global company itself maintains it has strong growth prospects in a highly supportive regulatory environment and that, with scale, it has the ability to accelerate growth.
At the time of the offer, Qoria said it was an “opportunistically timed” bid, as the company was at a cash profit inflection point, and in the midst of its post-productive annual sales quarter.
It’s not the first time that K1 has turned up on the Australian investment scene. In 2022, it bought Elmo Software for $486m.
Others out of the US that have been interested in Australian targets are Accel-KKR, which had also bid for Elmo Software, among other groups, and Thoma Bravo, which bought Nearmap the same year for $1.1bn.
Thoma Bravo about six months ago was known to have picked up the phone to Iress to discuss a buyout, according to talk in the market. However, it is understood that, at that time, the talks went nowhere.
Still, the view among many is that information technology company Iress, which is in turnaround phase and has had some disappointing results, will not be listed in a year, with it ripe for a buyout.
Private equity firm EQT has considered an acquisition in the past.
Thoma Bravo, which is close to Jarden, is considered the most likely to strike, and the view is it’s just a matter of when.
The other obvious candidate is software solutions manager Bravura, which has fallen from grace in the past two years but is on its way to recovery under new management.
Private equity firm Affinity Equity Partners had in the past considered buying Bravura, which provides software solutions for wealth managers and fund administrators.
Bravura’s market value crashed to less than $200m when its earnings sharply declined, but it has recovered to have a market value of more than $600m.
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