Private capital kicks tyres at Envirosuite; watching brief on Potentia

Envirosuite, an ASX-listed technology business geared at the aviation, mining and industrials sectors, may not have had much good news for shareholders since it retained Gresham Partners in late 2022. But there is plenty happening behind closed doors.

Envirosuite’s former chief executive (and now director) Peter White and Beijing BHZQ general manager Zhigang Zhang at a contract signing.  

Sources told this column Envirosuite’s board and Gresham have fielded interest from a handful of buyout firms and strategic players over the past year. But while a data room was established, the proposals were deemed too incomplete to merit disclosure.

Envirosuite’s tech platforms help companies make real-time decisions regarding their operations to minimise both costs, and their environmental footprint. Gresham dealmaker Hugo Dudley-Smith’s pitch to potential bidders is understood to have centred on its footing in fast-growing niches and that its offering is agnostic across various hardware providers.

The company makes $62.6 million in annual recurring revenue from blue-chip clients like NASA and Glencore, but is trading with a paltry $60 million market capitalisation after its share price dropped more than 40 per cent in the past year.

Of note, it is understood Andy Gray’s software specialist firm, Potentia Capital, has been in-and-around the data room, although it is unclear how progressed its interest is, Mid-market private equity firm Adamantem Capital also considered Envirosuite for its $200 million Environmental Opportunities Fund but was turned away,

A spokesperson for Envirosuite declined to comment on Wednesday.

While the buyout talks play out, Envirosuite’s shareholders have had to sit with gritted teeth as the stock continues to plunge. That includes Thorney International (6.5 per cent), Ellerston Capital (7.9 per cent), and Perennial Value Management (14.06 per cent).

Street Talk understands the register – led by Thorney – will start seriously pushing for board-level change, should a bid fail to materialise. Sources said the hunt for a new chair is already under way.

The annual general meetings result from November reflected shareholders’ growing dissatisfaction, with 25.5 per cent of proxies and 28.6 per cent of votes cast on the day going against David Johnstone’s reelection as the chairman.

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-new chair incoming, Alex Waislitz confirmed there is lots of talk that a number of parties including PE firms and others are sniffing around EVS. Didn’t have any feel for whether something is imminent. Said a number of shareholders have been unhappy with the performance for some time including Thorney and agitating for change. If there is no deal then he expects a new chairman will be put forward. He did not want to say who that might be.

-has PE and strategics looking at it, have received inbound proposals that they have deemed not complete enough to disclose.