Bravura board recommends takeover bid
06 May 2008 | 4622 views | 0
The board of Australian pensions and wealth management technology vendor Bravura has disclosed plans for a management buy out in partnership with private equity firm Ironbridge Capital in a deal worth around A$272 million.
Under the arrangement, a new company owned by funds advised by Ironbridge and senior management of Bravura would pay all stockholders - apart from joint CEOs Iain Dunstan and Simon Woodfull - A$1.73 in cash per share. Bravura says the offer represents an 18.5% premium on its last traded price on the ASX on 11 April of A$1.46.
Dunstan and Woodfull will exchange their combined shareholding of around 30.57% for a mix of cash and shares in a special purpose vehicle established by Ironbridge that will hold Bravura as a stand-alone investment.
But the deal depends on joint CEOs Iain Dunstan and Simon Woodfull retaining control of a 30.5% stake in the company that may have been sold-on in the collapse of domestic stockbroker Lift Capital.
Trading in Bravura shares was halted last month after it emerged that a third of the firm's issued capital was tied up in margin loans from Lift Capital to Dunstan and Woodfull. The two men had margin lending accounts with Lift covering around 30.5% of Bravura's listed shares, which were subsequently earmarked for sale by Lift Capital creditor Merrill Lynch.
In a 1 May statement to the Australian Stock Exchange (ASX), Bravura says the current legal status and ownership of the shares "remains unclear at this time". The statement says that Dunstan and Woodfull understand that Merrill Lynch's sell down has not included their Bravura shares and they are in discussions with the voluntary administrators of Lift Capital about paying off their margin loans and regaining the legal title to their shares.
The MBO is also dependent on confirmation that Bravura's adjusted EBITDA for full year 2008 is at least A$23.5 million and shareholder and court approval.
Matt McLellan, director, Ironbridge says: "Ironbridge's understanding of Bravura's business and our ability to add value to the investment is founded in our key target sector approach to private equity investment, which includes, amongst others, financial and outsourced services."
Bravura says the Ironbridge proposal is expected to be implemented by mid August 2008.
Dunstan and Woodfull founded Bravura after a leveraged management buy-out from CSC in 2004. The highly acquisitive firm has grown rapidly, reporting revenue of A$67.6 million for the six months to December, and a market cap of $207.3 million.
Bravura currently supports more than 175 financial institutions globally, with a range of corporate clients in Australia, New Zealand, Europe, Asia and South Africa.
Trading in the firms shares resumed on Friday after their suspension following the Lift Capital affair.