Iress is once again under the spotlight for a private equity take-out after its share price crashed almost 36 per cent on Monday following a disappointing result.
It takes the company’s market value to $1.2bn with its share price closing at $6.44.
The trading technology company has been keeping its investment bank Goldman Sachs close at hand since the start of the year, when private equity firms were said to be still casting their eyes over the business.
On Monday, Iress told the market that its revenue had fallen 2 per cent on the previous corresponding period to $315m. Its earnings before interest, tax, depreciation and amortisation was down 17 per cent to $29.4m, and net profit was down 31 per cent. It posted a $139.8m loss.
Its transformation plan was on track for completion next year, as it agreed to sell its MFA business for $52m to SS & C.
It suspended dividend payments to reduce debt on the back of high transformation plan costs.
Iress was the subject of a buyout proposal in 2021 from EQT, but it never resulted in a deal. At that time, the offer was up to $15.50 per share, equating to a market value of about $3bn.
Some take the view it is hard to make an aggressive move on Iress when uncertainty existed about the group’s future.
Yet others say a buyout is inevitable over time.
Iress provides software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions and data intelligence.
Buyout funds are thought to be attracted to Iress for its high cash flow, defensive revenue and underperforming assets.
Meanwhile, Ampol gave little clues away as to whether it remains in the contest for 7-Eleven, only signalling it has a keen interest in fuel convenience, that it remains disciplined on acquisitions and it is looking for growth in both Australia and New Zealand.
Ampol is understood to have been working with investment bank UBS on a potential acquisition of 7-Eleven, and is thought to be up against Seven & I Holdings and private equity firm Platinum.
Ampol would likely face heavy scrutiny on an acquisition from the Australian Competition and Consumer Commission.
The business generates about $220m of EBITDA from its 750 Australian stores and would likely sell for about $2bn.
Ampol posted an 88 per cent decline in its net profit to $79.1m for the six months to June.
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