The Nearmap Ltd (ASX: NEA) share price has jumped to its highest level this year after announcing it has received a takeover offer and providing a trading update.
The aerial imagery technology company this morning announced it has received a non-binding indication from Thoma Bravo L.P. to acquire its shares for $2.10 a pop.
The offer represents a 39% premium on Nearmap's last closing price of $1.51 on Friday. Moreover, the offer is 67% above its six-month volume weighted average price.
What the takeover values the Nearmap share price at
The Nearmap share price rallied 33% to $2.01 in early trade on Monday, but remains below the bid price. This probably reflects the risk that the deal could fall through and the market's view that Nearmap won't get a second bidder.
Not that management hasn't tried. It said it received other proposals but they weren't good enough to be pursued further.
The indication of interest by Thoma Bravo was received on 6 July and both parties have been in advanced talks. This proposal was credible enough for Nearmap to grant the bidder non-exclusive due diligence that led to the $2.10 a share offer.
The takeover proposal values the Nearmap share price at around $1,055 million on a fully diluted basis.
Bittersweet news for the Nearmap share price
While the takeover news has excited the market, longer-term shareholders might still be disappointed. The shares were trading at over $4 in June 2019 and Nearmap undertook a share placement in 2020 at $2.77 a share.
Shareholders that came in on the share purchase plan paid a more attractive $2.30 a share. But that's still below Thoma Bravo's offer price.
At least the takeover (if successful) will remove the litigation risk to shareholders. Nearmap is being sued by its rival in the United States for technology infringement.
Details of the takeover
Thoma Bravo is one of the largest private equity firms in the world. It has more than US$114 billion in assets under management.
The proposal is subject to the usual conditions, such as regulatory approvals. Nearmap has to pay a break fee of up to US$3 million.
Nearmap's trading update
Separately, Nearmap said that the group's annual contract value (ACV) for FY22 will come in at the top end of its guidance.
Management expects ACV to hit $159.9 million at constant currency. This compares to its forecast of $150 million to $160 million.
It also said it was holding $93.7 million in cash as it only used around $20 million to support growth of the business (ex litigation costs). That's around $10 million less than it originally thought.
The Nearmap share price fell 28% over the past year before today's rally. In comparison, the S&P/ASX 200 Index (ASX: XJO) shed around 7% of its value.
