EQT pursues $2.2b Australia software take-private

The private equity firm proposed a scheme of arrangement whereby it would purchase all outstanding shares for A$15.30-15.50 apiece. This followed an earlier bid of A$14.80 per share in June, which was rejected, according to a statement. The board concluded that both bids didn’t present compelling value to shareholders, but it is willing to consider an improved offer.

Iress’ stock spiked more than 13% after the second bid was disclosed. It closed at A$14.25 on July 30 and was trading around the A$14.00 mark as of late morning on August 2.

Founded in 1993 as Dunai Financial Systems, the company launched Iress in 1995. A key breakthrough came two years after that with the creation of a trading software product that coincided with the Australian Securities Exchange switching from screen-based to electronic options trading. The company went public in 2000.

Initially an Australia-focused player, Iress established a global footprint through multiple acquisitions. It now provides a suite of financial advisory, trading, and investment management software to more than 10,000 companies and 500,000 people across Asia, Europe, North America, and Africa. Customers include challenger banks, insurers, investment managers, traders, and brokers.

Iress is headquartered in Melbourne and has 17 offices across seven countries.

The company generated A$542.6 million in revenue for the 2020 financial year, up from A$508.9 million in 2019. Asia Pacific accounts for more than half of revenue. Over the same period, EBITDA fell from A$133.9 million to A$125.5 million, while net profit dropped 9% year-on-year to A$59.1 million.

EQT is looking to build out its Asia private equity exposure, which includes writing larger checks. Traditionally, the firm has made equity commitments of $50-100 million in Asia, skewed towards China and Southeast Asia. That will become $100 million and above, with a sweet spot of $100-300 million investments in the upper middle-market space.

An Australia office opened in 2020, but it was largely driven by the infrastructure team. Since then, local private equity executives have been recruited, with Frank Heckes and David Forde, both formerly of Archer Capital, becoming joint heads of Australia and New Zealand PE. Earlier this year, EQT added an office in Japan.

“We want to grow in the region and really bring the best of EQT to bear in the region, which historically we haven’t had the bandwidth and resources to do. In private equity, we are growing in these two new geographies [Japan and Australia], and we are making additions in China and Southeast Asia. We will get to India and South Korea soon,” Simon Griffiths, head of Asia Pacific private equity at EQT, told AVCJ in January.

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• Topics
• Australasia
• Buyouts
• Technology
• Australia
• EQT Partners
• enterprise software