Adamantem takes second swing at Qantm IP, offer pegged at 58pc premium
Here comes another test in appropriate company disclosure for Qantm Intellectual Property’s board.
Qantm has a 14.4 per cent market share in Australian patents. Louie Douvis
Investor sources told this column on Monday that Sydney buyout firm Adamantem Capital had submitted a non-binding indicative offer for in-play Qantm IP, and had retained Gresham for advice.
It is understood the offer price was pitched at $1.817 a share. That reflects a juicy 58 per cent premium to the undisturbed share price – aka before this column, on February 26, outed that the board was sitting on a privitisation proposal.
Adamantem’s bid has landed at a time when UK-based intellectual property firm Rouse International Holdings remains in due diligence with its mystery proposal. As reported, both Adamantem and rival Quadrant Private Equity had expressed interest around the same time as Rouse lobbed its offer.
It will be interesting to see how Qantm responds to our latest report in Tuesday’s ASX filings. Readers of this column will recall the target board has been surprisingly tight-lipped on Rouse’s proposal and why it deserved a look at the books, especially at a time when PE players have been swarming around the business. Forget bid price, Qantm shareholders were left in the dark – and remain so – on the most basic details including if Rouse was offering cash or scrip.
Starved of details by their board, Qantm shareholders have been sifting through public documents to learn more about Rouse, which is partly owned by London mid-market private equity firm MML Capital.
Rouse International Holdings Limited, the group’s parent entity, had just $US14 million cash at April 30, 2023. It posted a $US5.3 million loss from $US72.2 million revenue for the financial year ending April 30. With numbers like that, it wouldn’t be a stretch to think Rouse may struggle to fund a bid for Qantm without its PE backer stepping in.
Between Rouse and Adamantem, Qantm is shaping up to be something of a private equity shootout. Of note, sector gorilla IPH Limited, which is capitalised at $1.54 billion on the ASX, is known to be watching the situation closely. IPH has historically retained Macquarie Capital for corporate activity. MA Moelis is tending to the target.
Qantm has three units, across patents, trademarks and litigation. It owns Davies Collison Cave, one of Asia-Pacific’s largest patent and trademark attorney firms. Two of Australia’s top-three agents for trademark applications, Sortify.tm and DCC, are also in its stables.
It debuted on ASX with a $295 million market capitalisation in 2016 and had shrunk to just $161 million as of February 26. The Adamantem offer is worth about $260 million. Angry shareholders voted down the remuneration report at the recent AGM.
The takeover interest comes after Qantm handed down its first set of pleasing numbers last month since listing. It tallied up $56.8 million revenue for the December half, while underlying EBITDA shot up 25.7 per cent to $17.3 million. Net debt fell to $21.7 million.
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