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#Bull Case
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Added 3 years ago

ASX:AND (Ansarada) is playing in the M&A software space. founded around 15 years ago but going through an interesting transformation now:

A. the company recently raised $45m to facilitate the acquisition of Thedocyard, eliminate debt, and fund future growth - the acquisition makes a lot of sense and the two businesses are very complimentary (Ansarada bringing their 'virtual data room' while Thedocyard bringing end-to-end 'deal/transaction management'.

B. Following the acquisition, Ansarada became a public company around 4 months ago.

Some Metrics

FY20 Revenue = $34m

FY21 Revenue growth: 17% QoQ est (source, page25 )

Market Cap = $110m AUD

No debt, ~ $30m cash in hand

==> Trading at ~ 3x EV/Revenue (and ~2.5 EV/future_rev)

Gross margin = 90% (source)

 

Bull-case: post covid-19 M&A transactions volume recovers to previous levels. The company delivers on its post-acquisition plan and executes well on its transition to SaaS charging model --> Delivering FY25 Revenue of $130-150m AUD which at x8-10 EV/Rev multiple resulting in EV of $1b - $1.5b AUD (x10 return).


Key risks I see:

- integrating the two businesses (Thedocyard being the much smaller fish) and operating as a public-company (remaining focused on execution will be tested here)

- transitioning from legacy to SaaS monetization model - impacting revenue growth (see page 22 here)

 

First post- be kind