Plenty of interest in Damstra as overseas software firms circle
Damstra Holdings, the ASX-listed workplace management software company, has turned into a red-hot M&A target.
One interested bidder was understood to be Ideagen, a British software firm chaired by former Shell M&A man Johannes Risseeuw. That offer was pegged at above 25¢ a share, sources said.
It would have been Ideagen’s second foray into the local market. In 2021, the firm acquired Australian compliance and governance software maker CompliSpace for up to $110 million from Tim Reed’s Potentia Capital.
But rivals could be better placed. After Street Talk reported takeover interest on Wednesday morning, Damstra told shareholders it had received a bid of 30¢ per share from Mitratech, owned by the Ontario Teachers’ Pension Plan.
Damstra executive chairman Johannes Risseeuw and CEO Christian Damstra each own about a 10 per cent stake in the company. AFR
Damstra shares rose 140 per cent to 24¢.
The company had seen its share price slide almost 29 per cent this year and is slated to hold its annual general meeting on Wednesday.
Not its first rodeo
Last year, Damstra found itself in private equity’s crosshairs, going through a round of takeover talks with a suitor, believed to be Accel-KKR. The US firm knocked on Damstra’s door and was keen to take a look under its bonnet, before sailing off into the sunset, perhaps spooked by market volatility.
At that time, the ASX-listed company called investment banker Jefferies and law firm Gilbert + Tobin for advice. Jefferies was advising Damstra on its discussions with Mitratech, the company said on Wednesday.
Damstra’s biggest shareholder is its CEO, Christian Damstra, with 8.29 per cent, followed by Risseeuw with 8.25 per cent. Australian Ethical owns 6.29 per cent of the business, while Regal has 6.09 per cent.
The company sells an enterprise protection platform that targets worker safety, risk management and compliance for clients such as New Hope, Glencore, Barrick Gold, CBRE and NZ Post.
About a third of its revenue comes from mining clients, while construction companies contribute 29 per cent. The rest is spread across clients in telecommunications, facilities management, utilities, government, financial services and healthcare.
Damstra achieved positive free cash flow in the financial year just gone and lifted EBITDA margins from 1.7 per cent to 24.6 per cent. Its revenue has been flat – $29.8 million for the 2023 financial year and $29.3 million the year before – but is triple what the company pulled in just six years ago.
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