Attura has made a play which, not unsurprisingly, has made the share price jump.

It appears as Cirrus would be a good fit for the Atrrura business mix, althought I am not necessarily a fan of their non integration approach.

Let's see if there are any other suiters as has happened to Attura in the past when they have been on the aquisition path.

Extraordinary trading in Cirrius Networks today. Non sensitive announcement about collaboration with NVIDIA and AI sparks 50% pump before pull back and then trading halt. Not sure how much Mr Market will like the further information announcement due by Monday.

@Strawman would be great to get management on for this small little company. Trading update yesterday was impressive and market liked it with a nice boost in SP.

appreciate in advance.

Low quality company with stagnant growth (year on year)

Won't dwelve much into the company but here are some company/FY22 result factoids:

1. IT services company
2. Market cap of $28m at 3c
3. Share price has been stuck around 3c for about 2 years
4. Revenue of $104m, slightly down from FY21 ($108m)
5. Horribly low margins so the company is barely profitable and barely operating/free cash flow positive
6. NPAT flat at just above $400k
7. OCF positive $3m with cash receipts of $122m
8. Strong second of FY22 with revenue of $60m
9. Management is a little bit bullish about FY23 but no 'real' guidance given

If the company can continue the momentum seen in 2nd half of FY22 into the next few years AND achieve some scale this could be an interesting value play.

Sort of like Dicker Data from 2011.

ASX Announcement
Webcentral Group Limited (ASX: WGC) (Webcentral) announced on Friday, 30 July 2021 an unsolicited on- market takeover bid to acquire the shares in Cirrus Networks Holdings Limited (ASX: CNW) (Cirrus) that it does not already own, at a price of $0.032 per share (Offer Price) (the Offer). Webcentral also announced that it has recently acquired and now owns shares in Cirrus representing 8.86% of the fully paid ordinary shares on issue.

Following consideration of the terms of the Offer with its advisers, the Cirrus’ Board Unanimously recommends that Cirrus shareholders REJECT the Webcentral Offer by taking no action.

The reasons Cirrus directors unanimously recommend you REJECT the inadequate Webcentral Offer include:

• Inadequate control premium: Webcentral is seeking to gain control of Cirrus without paying an adequate control premium and is offering a derisory premium of only 3.2% to the last closing price of Cirrus shares of $0.031 and a premium of 11.77% and 9.93% to the one month and three-month Volume Weighted Average Price (VWAP) of Cirrus Shares, being $0.0286 and $0.0291 respectively, up to the trading day prior to the announcement of the Offer. The premium implied for your shares by the Offer Price is materially below the average premiums paid in Australian corporate control transactions;
• Unsolicited nature of the Offer: Webcentral’s Offer has been made without any prior engagement with Cirrus’ Board, suggesting that Webcentral may not have the interests of all Cirrus’ shareholders in mind; and
• Not offering enough for benefits it may receive: Webcentral is not offering enough for the benefits it may receive; in the event Webcentral is able to secure 100% of Cirrus’ fully paid ordinary shares on issue, Webcentral could likely benefit from meaningful corporate overhead and administrative cost savings which Cirrus Directors consider are not reflected in the Offer.

Further details in respect of the Cirrus' Board recommendation will be outlined in its Target's Statement.
The Offer is unconditional (other than in respect of a “no prescribed occurrences” condition) and as such Webcentral is only able to withdraw the Offer in very limited circumstances. Webcentral’s Offer must remain open for at least one month which is expected to be until 16 September 2021.
 
 As such there is NO URGENCY for Cirrus shareholders to take any action at this time, including selling their shares now, because:

• Doing so would deprive Cirrus shareholders of the opportunity to benefit from any future growth; and
• Cirrus shareholders will lose the opportunity to benefit from any potential superior proposal or alternative transaction, should one emerge.

I doubt there are too many who have even heard of Cirrus Networks (CNW) a minnow with a mere $27.9 million market cap. I bought CNW last year after it became profitable and had a record 100% growth in revenue.

CNW has struggled to maintain growth during COVID and Webcentral has seen an opportunity to pounce.

Webcentral announced it would attempt to take over CNW by offering to buy every share offered on the market at 3.2c per share from today.

I haven't experienced a hostile on-market takeover like this before, so it will be interesting to what happens, and if CNW responds to the onslaught. Luckily the offer is above my cost basis, but I believe the company is still undervalued.

Full Announcement

Disc: Held IRL