Investors predict private buyout bid for Hansen Tech

Hansen Technologies provides software to industrials and is run by a founding family member.

After Johns Lyng’s largest shareholder and chief executive worked with private equity to delist from the ASX, the $1bn Hansen Technologies could be the next to disappear from the boards in a similar fashion.

The business that provides software to industrials is run by a founding family member, and investor sources say the company’s view is that it is being undervalued by the Australian listed market.

Chief executive Andrew Hansen, whose father Ken founded the business, has dismissed suggestions that a buyout or sale of the business is in the works, but others believe it could be a candidate.

A deal could happen where, should a buyout fund bid successfully for the business, Mr Hansen rolls his own 10.2 per cent stake into a private vehicle where, with private equity, he could concentrate on building better value out of the public glare.

Should a bidder be circling, or in fact the company be keen to be entertain offers from buyers, it would likely call on the services of Morgan Stanley, which has a connection with Mr Hansen through its Australian investment banking co-head Tim Church.

Private equity firm BGH Capital bid $6.50 per share for Hansen Technologies in 2021, but walked away before making a firm offer.

On Tuesday, shares in Hansen closed up 26c to $5.56, with its market value at $1.1bn after it upgraded its cash earnings before interest, tax, depreciation and amortisation guidance for the 2025 financial year.

Mr Hansen and his related parties reduced their stake in the past year from about 14 per cent.

Hansen provides billing software for telecommunications companies and utility companies and back office software for telcos, and has a strategy to grow through mergers and acquisitions as the global market remains ripe for consolidation.

BGH’s attraction to the business is thought to have been its relatively low valuation and defensive nature amid the global pandemic.

It also has limited debt, recurring revenue and generates plenty of cashflow, which appeals to buyout funds, as does its ability to withstand large levels of debt.

But some have attributed its lower share price levels to its acquisition of German software business Powercloud last year not creating the value some had hoped for.

Last week, Johns Lyng agreed to $1bn deal for Pacific Equity Partners to buy the business, with CEO Scott Didier rolling his 17.6 per cent stake into the private vehicle that would own the business after Johns Lyng had underperformed on the public market.