# RDY - ReadyTech Holdings



## System (2 April 2019)

ReadyTech is a leading SaaS provider of mission-critical people management systems to customers to assist them to comply with regulatory and legislative compliance obligations, efficiently manage a large number of people through software and drive key performance outcomes.

ReadyTech operates in two segments:

*Education*

Core products are its cloud-based student management systems (SMS) for education and training providers to manage the student lifecycle from student enrolment to course completion. ReadyTech also provides platforms to help state governments manage vocational education and training (VET) programs, software platforms for the pathways and back-to-work sector to manage apprentices and job seekers, and a competency assessment and skills profiling tools to track on-the-job training through a qualification.

ReadyTech's behavioural science-backed assessment tools are also included within the education segment. These tools are used to identify at-risk students in the tertiary education and training sector to improve course completion rates. They are also used to identify at-risk job seekers within the pathways and back-to-work sector to increase the number of successful job outcomes through the application of positive psychology.

In FY18 the education segment comprised 61% of total group revenue and 58% of EBITDA before corporate costs. The majority of education revenue is derived from student management systems.

*Employment
*
Provides payroll software and outsourced payroll services and human resource management (HRM) software solutions to employers to assist them with payroll and the management of their employees. HRM consists of human resource (HR) administration and talent management. HR administration involves employee records, workplace health and safety (WHS), organisational structure, document and expense management and reporting. ReadyTech is currently expanding its talent management capabilities to offer its customers a more comprehensive suite of solutions to assist them with attracting, engaging and
retaining people.

In FY18 the employment segment comprised 39% of total group revenue and 42% of EBITDA before corporate costs.

It is anticipated that RDY will list on the ASX during April 2019.

https://www.readytech.com.au


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## Dona Ferentes (8 November 2020)

Workforce and education software systems company ReadyTech has launched an equity raising to finance its acquisition of SaaS outfit Open Office, with a $25 million placement + SPP through broker and underwriter Wilsons. The new shares were at $1.88 each, which represented a 6 per cent discount to ReadyTech's last close and a 6.2 per cent discount to the three-day VWAP, according to terms in front of potential investors.

_Money raised would be used to acquire Open Office for an upfront consideration of $54 million and an earn out consideration of as much as $18 million, subject to hitting certain targets. Open Office provides case management software to local and state governments and the justice sector; the transaction represented a 3.2 times forecast fiscal 2021 revenue multiple and an 8.7 times forecast earnings multiple.

The acquisition would be ReadyTech's first move into the government/justice sector, its current software offering targets the education and employment sectors, providing services like student management systems and HR admin software. Acquisition target Open Office is majority owned by ReadyTech's largest shareholder, at 43%, Pemba Capital (reducing to 37% post transaction)_

Market Cap $120mill

- _sounds good for Pemba_


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## kenny (8 November 2020)

Thanks @Dona Ferentes for highlighting. What's your view on the impact to ReadyTech? Are there enough easy to capture synergies and cost savings to make this value boosting?

I noted another article mentioned;

If the proposed acquisition of Open Office does not proceed, ReadyTech, will use the proceeds from the placement to fund other growth opportunities, including potential M&A, the company added.  

The acquisition, if completed, is anticipated to be low double-digit EPS accretive in FY21 on a pro-forma basis before synergies and excluding integration costs, it added.


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## Country Lad (24 October 2021)

I don't usually miss out on seeing 3 breaks of Darvas, P&F and cbl in a row.  I don't know how this one snuck past the scans.


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## Country Lad (26 October 2021)

Country Lad said:


> I don't usually miss out on seeing 3 breaks of Darvas, P&F and cbl in a row.  I don't know how this one snuck past the scans.
> 
> View attachment 131854




Out of the starting blocks early with me on board


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## Dona Ferentes (1 November 2022)

received a conditional, non-binding bid from Australian private equity firm Pacific Equity Partners to acquire the company for $4.50 a share.


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## Dona Ferentes (5 November 2022)

Flourish of M&A Deals in the Small-Cap Software Tech Space​ 
By Peter Milios | 

Australian small-cap software companies have been severely oversold and as a result have been swarmed on in a flurry of M&A deals during October, with few signs that these deals will slow down with more likely in the pipeline.
National and international software firms, as well as private equity firms, have taken advantage of these low valuations, offering huge premiums in an attempt to secure control of the companies in question.

Over the past week, *Nitro Software* (ASX: NTO), *PropTech Group *(ASX: PTG) and *ELMO Software* (ASX: ELO), have all been in the process of formulating acquisition deals, whilst just [last week], R*eadyTech Holdings *(ASX: RDY) released a statement referring to recent media speculation about a potential transaction

ReadyTech Holdings Limited (ASX: RDY)​ReadyTech has also revealed that its majority shareholder – Pemba Capital Partners, who currently holds 31% of the company’s issued capital – will work with PEP on the proposition. The Independent Board Committee has considered the proposal and has granted PEP non-exclusive access to non-public due diligence information to allow it to develop a more certain Proposal.

At the moment, the discussions are continuing, and no agreement has been reached between the parties in relation to the value, structure, or terms of any transaction. Management has also stated that there is no certainty that these discussions will result in an acquisition.

There are already hiccups however, as the company’s second-biggest shareholder Microequities Asset Management has expressed their early concerns of the deal. The group currently owns 13.17%, and yesterday, bought a further 711,666 shares at $4.12, strengthening their belief that the company is undervalued, as well as giving them extra voting power to oppose such a bid, with potential for other competitors to enter the bidding war. Microequities CIO Carlos Gil stated:


> “_We have zero interest in selling the company for a 40% pop on its currently farcical mark to market price…We will strongly oppose such an approach_”




*Conclusion*
There are several potential reasons as to why private equity firms and larger software firms, particularly those in the U.S., have recently swooped on the opportunity to buy these small-cap software firms.

Firstly, the weakness of the Australian dollar means that these U.S. companies are purchasing at a discount. The AUD has particularly weakened last month, dropping to a 29-month low of 62 U.S. cents on 14 October. The AUD also hit a yearly low to the Canadian dollar on 15 October.
In addition, year-to-date, the tech sector has been one of the worst performers on the ASX, as investors have been looking at more so-called inflation hedged sectors, such as health and energy.
There seems to be a lack of knowledge surrounding the technology sector in Australia. The U.S. tech sector is much larger and more advanced than the Australian sector, meaning they have a better understanding of the performance metrics and valuations of these Australian software stocks.
In regard to the recent acquisitions involving these private equity firms, they have been aiming to take these firms private and then re-sell them in a better market or to a second buyer. They also see a miserable environment that presents an opportunity to buy some great tech companies a significantly reduced valuation.


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