Potentia, HarbourVest move for Australia's Nitro Software
Australia-listed productivity software provider Nitro Software has rejected a AUD 386m (USD 263m) buyout offer from Potentia Capital and HarbourVest Partners.
The consortium, which has already built up a 17% stake in Nitro, offered to buy all outstanding shares for AUD 1.58 apiece in cash, according to a filing. The Nitro board said it dismissed the bid because it didn’t reflect the company’s true value. Moreover, the move comes “at a time of significant share market volatility and cyclical weakness in global technology company valuations,” it added.
Nitro’s stock closed up 41% at AUD 1.57 on August 31 and remained around that level as of mid-morning trading on September 1, giving the company a market capitalisation of around AUD 262m. The stock has fallen by one-third since the start of the year, with the sharpest drop coming in the first quarter, consistent with listed technology companies globally.
Investor interest in software opportunities in Australia has crystalised into numerous take-private offers in recent months, with US-based specialist technology investors prominent among the bidders.
Automotive software supplier Infomedia was subject to three separate offers at one point from TA Associates, Battery Ventures, and a Vista Equity Partners-owned company. Meanwhile, Thoma Bravo agreed a AUD 1.05bn acquisition of aerial imagery and location data player Nearmap.
Potentia, which claims to be Australia’s only dedicated software and business services-focused manager, has collaborated with HarbourVest on deals before. The fund-of-funds was one of two principal co-investors in payroll software specialist Ascender, which was sold to Ceridian last year.
HarbourVest is also among the LPs in Potentia’s second fund, which closed in June at the hard cap of AUD 635m after about four months in the market. The rapid fundraising process can be partly attributed to exits from Ascender and CompliSpace. Most recently, Potentia agreed to sell its position in mining software provider Micromine in a deal worth AUD 900m.
Nitro claims to be one of only two software companies globally with a proven enterprise-grade software-as-a-service (SaaS) PDF productivity and eSigning platform. It has more than 2.8m licensed users and over 13,000 business customers in 155 countries. Customers include two-thirds of the Fortune 500 constituents and three of the Fortune 10 members.
Revenue reached USD 50.9m in 2021, up from USD 21.2m a year earlier, while the subscription share of overall revenue increased from 53% to 66%. EBITDA remained negative, widening from USD 6m to USD 18.6m, while net loss increased from USD 7.5m to USD 21.7m. Annual recurring revenue rose from USD 28.5m to USD 40.1m, with a gross margin of 92%.
More on Australasia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.