News blog
Parseq
- BY: Andrew Hore |
- POSTED: 21/10/2011 |
The independent directors of Parseq have agreed a 9p a share bid from chief executive Rami Cassis and his private equity backers less than one week after it was revealed that the institutions were unhappy with the original indicative offer of 7.5p a share.
Cassis and his private equity backers hold around 35.5% of the Parseq share capital, which put them in a strong position when it comes to the bid. Cassis is selling his 35.5% stake at 5.43p a shares - £500,000 in cash and the rest in loan notes. The other shareholders will get 9p a share in cash. The recommended bid values Parseq at £33.8m. If the 7.5p a share bid had been offered to everyone it would have valued Parseq, formerly Intelligent Environments, at £32.8m.
It is interesting that Cassis is effectively taking cash for all his shares, although he will be interested in the bid vehicle” by virtue of him and the Cassis Trustees being limited partners in CNH Capital, the parent undertaking of CNH Bidco”.
The original proposed management buyout of Parseq did not appear to take full account of the potential of the company’s Mobinetic mobile banking software business. Parseq’s mobile banking application is beginning to start generating significant revenues and there will be much more to come when O2 launches its new e-bank service, which will generate transaction fees for Parseq.
The latest interims show how well the software business is doing but the overall figures were held back by the poor performance of the services business reversed into Intelligent Environments last year by Cassis.
Pro forma 2011 interims show underlying operating profit improving from £800,000 to £1m. The software business swung from a loss of £76,000 to a profit of £943,000, on revenues up from £2.7m to £3.9m, as the services profit contribution slumped.
Julian Tolley of Merchant Securities forecasts a 2011 profit of £2.2m, rising to £5.1m in 2012. That means that the proposed bid values Parseq at less than nine times 2102 prospective earnings.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFOctober2011_25.pdf
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