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Leading location intelligence and aerial imaging specialist Nearmap (ASX: NEA) has granted exclusivity to Chicago-headquartered private equity firm Thoma Bravo to explore whether a final agreement on a $1.055 billion deal can be reached.
The announcement to shareholders, delivered alongside a financial update, comes a month after the Sydney-based business received the proposal from Thoma Bravo on 6 July and follows the receipt of several expressions of interest from other potential parties.
With due diligence now at an advanced stage on the $2.10 cash per share proposal, Thoma Bravo has been allowed seven days to agree to no-shop, no-talk, no-due-diligence obligations and a notification obligation on the schedule agreement.
The $2.10 valuation offers an 83 per cent premium on Nearmap’s closing price of $1.15 on 5 July, the day before receiving the proposal, and a 39 per cent premium on Nearmap’s closing price of $1.51 last Friday.
Nearmap, which provides instant access to high-resolution aerial imagery, city-scale 3D content, AI data sets, and geospatial tools, is due to release its full-year results this week but confirmed today that its annual contract value (AVC) would be at the higher end of its forecast performance.
Initial FY22 guidance predicted AVC to be between $150-$160 million, with the expected announcement of $159.9 million set to be almost 25 per cent more than last year’s $128.2 million.
Nearmap, which recently partnered with The Nature Conservancy Australia to tackle the impacts of climate change, is anticipated to announce a cash balance of $93.7 million, benefitting from a $20 million capital raise in FY22 to support the growth of the business.
Founded in 2007, Nearmap is one of the largest aerial survey companies in the world, helping users conduct virtual site visits for deep, data-driven insights.
Using its own patented camera systems and processing software, it captures wide-scale urban areas in Australia, New Zealand, the United States and Canada several times each year, making current content instantly available in the cloud via web app or API integration.
All financial and other valuation-critical due diligence supporting the $2.10 proposal, including the completion of quality of earnings, has now been completed.
The board considers none of the other potential offers received by Nearmap to be in the best interests of the shareholders and says it will continue to assess the proposal and negotiate terms with Thoma Bravo. It will only enter into a definitive agreement if it believes a transaction is in the best interests of shareholders.
Any definitive agreement with Thoma Bravo will not be subject to financing but will be conditional on Foreign Investment Review Board approval, clearance in the United States under the Hart-Scott-Rodino Act, and other customary terms and conditions.
Thoma Bravo is one of the largest private equity firms in the world, with more than US$114 billion ($160 billion) in assets under management, investing in growth-oriented, innovative companies in the software and technology sectors.
Over the past 20 years, the firm has acquired or invested in more than 380 companies representing over US$190 ($267 billion) billion in enterprise value.
Shares in Nearmap (ASX: NEA) haven’t traded at $2.10 since November 2021, dropping below $1.00 as recently as June, but are up 27.48 per cent to $1.94 as of 10:41am AEST.
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