US software company Reveal expected to lob bid for Nuix

Nuix software allows companies to make sense of a huge amount of data.

US software company Reveal is understood to have hired investment bank Barrenjoey for a possible tilt at Nuix.

Sources suggest a bid was due to land for the $220m technology company this week.

DataRoom revealed that both Reveal and Relativity had been running the ruler over the embattled business, which posted a $22.8m loss for the year to June.

Reveal, which works in intelligent automation services, was founded in Australia.

Nuix was floated by Macquarie Group, which was a 65 per cent owner.

When it listed, the company was worth $1.8bn, excluding debt.

But the float was a disaster after unexpected profit downgrades, and a probe into prospectus forecasts and continuous disclosure.

Despite its challenges, Nuix is considered to be fundamentally a good business. It generated $12m of earnings before interest, tax, depreciation and amortisation in the past financial year, down from $60.6m in the previous corresponding year.

The technology sector has proved to be a happy hunting ground for opportunistic suitors after it boomed during the pandemic in the past two years.

It has since sharply come off the boil.

The number of bids emerging for beaten-down stocks in recent weeks – Nearmap, Nitro Software and Tyro Payments to name a few – is creating a dilemma for short sellers, who now lack certainty that they will collect a strong return on their bets, with shares soaring once a bid emerges.

Nuix software allows users to make sense of huge amounts of data.

The company provides services to governments, advisory law firms and large corporations around the world.