update 18/10/2021

Ooooh...... never mind.

When I was in my early teens one of my older brother's mates divulged the secret to successfully getting off with a member of the opposite sex at the Friday night disco:

"Go ugly, early"

This might have been the recipe for successful teenage fumbling, but never really sat easy with me: surely that beautiful girl on the other side of the room with the novelty Xmas jumper is the one for me? If I hang around ignoring her for several hours whilst sipping on my snakebite and black, eternal happiness will be mine, right?

Rhp took the offer, and no one else came to swoop them off their feet.

The girl in the novelty Xmas sweater went home when her Dad picked her up early, my brother and his mate were out there in the bushes snogging, and I was left there with rolling papers and a pouch of Drum tobacco, trying to make something I could temper my loneliness and teenage angst with. 

It was always a long and lonely bicycle ride home. 

Still, RHP has returned me 138% and I have realied that women in novelty seasonal sweaters are rarely a good options. As for my brother's mate, well, thats another story.

12/06/2021

Below from the AFR

personally I was disappointed at the lowball offer and if nothing better appears would hope management knock it back. 
 

Rhipe a juicy target, not just for Crayon

Jul 2, 2021 – 12.15pm

Other parties could emerge as bidders for Rhipe. 

ASX-listed software licence seller Rhipe is looking juicy, with the market anticipating more bids for the $404.3 million business.

The company emerged as the takeover target of Norwegian heavyweight rival Crayon earlier this week, when it announced it was raising capital to fund an acquisition.

Other parties could emerge as bidders for Rhipe. 

Rhipe confirmed it had received a non-binding, conditional proposal from Crayon for $2.50 per share on Thursday.

While the offer came at a 20 per cent premium on its last close before the offer was announced, and a 30 per cent premium on its one month volume-weighted average price, the bid is considered cheap by Shaw and Partners senior analyst Jonathan Higgins, who accurately pre-empted the proposal in a note on Monday.

Higgins said the proposal was opportunistic in regards to price, given the company is at a ”cyclical low” in earnings, despite continued revenue and profit growth.

“Acceleration in run-rates and easier growth is coming,” he said.

“Our preliminary estimates put Rhipe - if being acquired at the peers’ multiple with our estimate of synergies - at $2.66. With a more typical control premium on top of this, that would equate to $3.40. We would expect further interest (if around) to generate a price closer to $3. We note this excludes any vendors that may be brought to Rhipe.”

Rhipe acts as a middleman between big tech companies like Microsoft, Trend Micro, DocuSign, Symantec and Citrix and resellers who sell the software to their business customers. Most of its business is concentrated on Microsoft and it is one of only 12 globally managed account partners for the big tech giant.

The non-binding, conditional bid from Crayon was made at a 15 times enterprise value to operating profit multiple based on Higgins estimates.

He said the bid also undervalued Rhipe because it did not price in its investments ahead of growth which are expected to yield fruits in the next two years.

One of the largest opportunities for an acquirer will be to extend its footprint in the re-seller market beyond Microsoft. For Crayon, which has just added an Amazon Web Services practice, this would be a logical opportunity.

“Any larger company (such as CRAYN) has further practices to plug in. These would create immediate and likely material profit synergies” Higgins said.

“We see multiple parties as being interested in RHP strategically, with the scrip, size and BS power. In our view these parties (listed) could include: Arrow Electronics, Data#3, Dicker Data, Insight, Synnex and a host of others.”

Rhipe granted Crayon non-exclusive due diligence, suggesting it’s open to a satisfactory offer, but in the meantime it’s firming up its options.

Gripe has entered a trading halt pending an announcement. 
rumour has it a take over offer from Crayon. 
im not overly surprised it has become a target given it is sitting on a pile of cash, is not expensive by most metrics and has a long runway of growth ahead of it. 
hope it's going to command a good price. 

Another solid but not startling performance from Rhipe. 
see previous straw for merits of thesis but still heaps of cash, no debt, expanding and as yet barely touched TAM and upside of improved margins with new acquisition. 
 

sisc: held
 

ASX Code: RHP Trading Update
Sydney, 29th April 2021 – The Board of rhipe Limited (‘rhipe’ or the ‘Company’) is pleased to provide an update on its current trading performances following the close of the third quarter of trading to 31 March 2021.
Overview of Financial Results
The table below summarises the unaudited financial results for the nine months from 1 July 2020 to 31 March 2021 (“Q3 YTD FY21”).
  $ million Q3 YTD FY20
Sales 236.5 Revenue 40.8
Q3 YTD FY21
Change
  Gross Profit Operating Expenses Operating Profit (1)
38.3 28.7 9.7
273.1 +15% 46.8 +15%
43.1 +13% 30.1 +5% 13.2 +36%
excludes any FX gains or losses, share-based payments and any diligence costs. It also includes rhipe’s share of cost incurred in
  1. Operating profit is gross profit less operating expenses and non-operating one-off costs including restructuring and due rhipe Japan and property leases cost.
Selected Highlights of Q3 YTD FY21 Results
? rhipe has continued to deliver solid revenue growth of 15% driven by continued momentum in Microsoft public cloud products including Office 365 and Azure, with growth in our solutions and services business.
 ABOUT RHIPE
rhipe, (ASX: RHP) is a global leader in cloud and technology solutions, providing partners with business advisory and deep domain technical expertise to thrive in the growing cloud market. rhipe is recognised as an expert in subscription software licensing in Asia Pacific. Its multi-award-winning services and support division is the industry leader in Microsoft Office 365 implementation and other global vendor solutions.
 FOR MORE INFORMATION CONTACT Dominic O’Hanlon - Chief Executive Officer [email protected]
Mark McLellan - Chief Financial Officer [email protected]
  rhipe.com
 
   ? Microsoft Office 365 seats at 31 March 2021 were in excess of 775,000, with the monthly seat addition continuing around the 16,000 seats per month in the current financial year.
? Group operating expense growth was 5% in the 9 months to 31 March 2021 with increased investment in Q3 likely to continue into Q4.
? Group operating profit of $13.2m was up 36% year on year due to solid revenue growth alongside careful cost management. This is consistent with first half results for this financial year.
In addition to the solid financial results outlined above, rhipe’s 1 April 2021 acquisition of cyber security distributor, emt Distribution, is expected to complete on 30 April 2021. The acquisition strengthens rhipe’s presence in security software distribution and will expand rhipe’s offering to the enterprise market, providing a full spectrum of security solutions from a wide choice of vendors to both our existing and new Partners.
As a result of the strong performance in the third quarter, rhipe expects its full year operating profit for the financial year ending 30 June 2021 to be in excess of $18 million ahead of previously disclosed guidance of $17.5 million. This operating profit guidance excludes any changes in market conditions.
ENDS
 

Rhine seems to be moving further into cyber security as a higher margin addition to their core Cloud service and reseller business. 
they operate a resilient business which should benefit from a long tailwind of Asian businesses migrating to the cloud. Huge TAM. 

If you are concerned about the risks of a tech wreck from rising bond yields, there are worse places to put your money than Rhipe. Profitable, large cash balance, pays a dividend and growing revenues and profits (though not in a startling fashion). So should be pretty rsilient to large fluctuations in SP 

May benefit from a rebound in sales with reduction of COVID  and expansion into Japan increasing pace  

disc. I hold

 

1 April 2021
rhipe acquires cyber security distribution specialist, emt Distribution
The Board of rhipe Limited (‘rhipe’ or the ‘Company’) is pleased to announce that it has entered into binding legal agreements to acquire 100 percent of the share capital of emt Distribution Pty Ltd (Australia) and emt Distribution Pte Limited (Singapore) (together “emt”).
emt is an Australian headquartered cyber security distribution specialist that focuses on sourcing innovative security software vendors and working with channel partners, to deliver both on-premise and cloud-based security solutions, aimed at protecting companies against cyber security attacks. emt’s security product offering is centred around the Australian Signals Directorate’s eight essential requirements for a company’s cyber defence strategy. emt has operations in Australia, the Middle East and Asia, with 40 employees and sales of $26m across these locations.
The acquisition strengthens rhipe’s presence in security software distribution and will expand rhipe’s offering to the enterprise market, providing partners with a full spectrum of security solutions from a wide choice of vendors, to help them build their own security portfolio. The acquisition complements rhipe’s existing cyber security software offering centred around Microsoft’s product stack and also the recent launch of rhipe’s own SMB focused encryption product “SmartEncrypt”. The emt business is positioned for growth in the cyber security market, with Gartner currently valuing the IT security market at USD 23bn (APAC incl. Japan) with a forecast annual growth rate of 10% from 2021 to 2024. Key drivers of the growth include regulatory compliance, insurance requirements, increased risk of threat and customer risk factors.
emt was founded in 1988 and has a portfolio of over 15 security vendors that offer cyber security solutions, catering to the needs of both small and medium businesses ("SMB") and large enterprise companies. Services provided by emt include pre and post sales technical support and professional services.
Dominic O’Hanlon, CEO of rhipe said, “emt Distribution has an incredible track record in delivering software security products and solutions via their distribution channels. By combining emt’s expertise in security with rhipe’s reach, we will be able to offer partners across APAC effective solutions to protect against growing threats around cyber security.

“We plan to continue investing in the emt business to support its continued growth, delivering emt’s extensive portfolio of vendor security products to rhipe partners, while providing emt partners with access to SmartEncrypt and rhipe security vendor products . We look forward to welcoming the emt team to the rhipe family and leveraging their outstanding skills and expertise, to deliver greater outcomes for our partners and their customers.”
Richard Rundle, Founder and CEO of emt said, “As we enter our next stage of growth, we are thrilled to be joining the rhipe family to collectively execute on the opportunities ahead. I could not be prouder of our team’s success to date and believe this is a significant opportunity to align with a distributor of rhipe’s calibre, to greatly enhance our capabilities and market reach.”
rhipe is expected to complete the purchase the Australian and Asia operations of emt in the next couple of months, with the purchase of the Middle East operations expected to occur in the first half of next financial year. The purchase price for the Australia and Asia operations will be an upfront payment of $11m payable in cash upon completion of the transaction. In addition to the upfront cash price, key management will be entitled to additional consideration of up to $2m tied to the reported financial performance of the acquired business over the first 24 months. In the 12 months prior to acquisition, emt Australia and Asia has sales of $19 million and delivered underlying EBITDA of $1.9 million. The purchase of emt Australia and Asia is expected to increase rhipe’s earnings per share by more than 15% assuming emt had been owned for the whole of the current financial year and excluding transaction costs.
The exact terms of the expected purchase of emt Middle East will be disclosed post an audit of these operations after the period to 30 June 2021. emt Middle East has 19 employees based in Dubai with underlying EBITDA of approximately $0.5m in the 12 months to 31 December 2020.
We are pleased to confirm that all key emt management have been retained, with CEO Richard Rundle now responsible for driving the continued growth of the emt business within rhipe as well supporting the expansion of rhipe’s security offering to its existing SMB focused customers.
The acquisition is expected to complete in the next two months and have a minimal impact on rhipe’s financial performance to 30 June 2021. The expected contribution from the acquired emt in the financial year to 30 June 2022 is estimated to be around $2m of operating profit before accounting for further investment in the emt business, to take advantage of growth opportunities arising from the combination of the two businesses. A further update will be provided as part of our year end results for the financial year to 30 June 2021.